Coffee: Insurance scheme would cushion against price fluctuations

Editor,This is with reaction to the story “Gov’t cuts coffee prices, cites global price decline? (The New Times, March 4).

Tuesday, March 05, 2013
A farmer sorts out coffee beans: An insurance scheme would be a safeguard against price fluctuations. The New Times / File.

Editor,This is with reaction to the story "Gov’t cuts coffee prices, cites global price decline? (The New Times, March 4).If Egyptians of antiquity could put in place a system to smoothen the "fat-and-fast” effects of fluctuating high and low production, in their case of grain, why can’t we do the same for commodities, such as coffee?We could then guarantee an average farm-gate price for the farmer to ensure predictable incomes and thus avoid the temptation to uproot coffee trees to replace them with other cash and subsistence crops.We need to remember that coffee has a long plantation to harvest lead time and once uprooted, it becomes difficult for farmers to act fast to respond to more positive market price signals fast enough in the future.The country’s economic planning becomes similarly difficult in conditions of wild fluctuations in market prices for commodities on which a large proportion of the country’s agrarian population depends for its livelihood.Our financial experts should be able to design a quasi insurance system that addresses this perennial problem. One that involves coffee and other commodities producers to assist them in smoothening the roller-coaster effects of fluctuations in global commodity prices.Mwene Kalinda, Kigali