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A look at 86 years of Uganda’s Only Surviving Cooperative Society

Eric Mukhwana

By Eric Mukhwana

Bugisu Cooperative Union (BCU) is Uganda’s only surviving cooperative society. It’s an establishment that has existed since the colonial times.

Arabica coffee was introduced in Bugisu in 1912 and it has remained the central economic activity of the Bagisu.

The thought to form a cooperative union was precipitated by European and Asian private traders who benefited from Bugisu coffee more than the Bagisu themselves.

In the 1920s, European and Asian private traders were the coffee buyers.

They created what was called “the buying ring” in 1927 whose purpose was “to eliminate wasteful competition” – literally translated to forcing down the Bugisu coffee prices.

The predatory nature of this buying ring was such that they had to buy coffee right from the grassroots at very low prices. This agitated the Bagisu who were getting a raw deal from their coffee.

Bugisu Coffee Scheme

In 1931, prominent Bagisu (Samson Kitutu, S.K. Mutenyo, J.N.K Wakholi, X.M.M. Gunigina, Fenekas Masaaba, Wagisi and others) formed the Bugisu Coffee Scheme (BCS) to supervise the marketing of their coffee. But their secret objective was to promote the cooperative.

However, the powers of BCS were hijacked by central administration and three trading companies; sharing and organizing coffee processing, marketing and regulating coffee price.

Baumann & Company took the leading role.

In 1933, because of pressure, BCS was given exclusive buying rights – but it was operated by a European Manager hired by a District Commissioner.

Although the BCS was for Bagisu, more lucrative positions were taken by Europeans, Asians and Baganda. There was a board that comprised five members, with two Bagisu representatives.

Foreign Interference

In 1938, with interest to reduce her controlling powers, BCS was contracted to do only coffee collection from farmers – but not to sell.

In 1940, a new company, Bugisu Coffee Marketing Company (BCMC), an all-European owned company, was formed.

It took the lucrative role of coffee marketing, so BCS would do the donkey work of collecting and delivering it to BCMC for selling and earning abnormal profits.

The entire Board of BCS was left with a peripheral role of advisory.

Between 1944 and 1949, after bitter complaints by the Bagisu farmers about the structure of BCMC, two more Bagisu representatives were appointed to serve as a channel to farmers and to agitate for the rights of farmers.

But the BCMC remained in full control. The Bagisu, convinced that they were being grossly cheated by the company, became deeply rooted.

Taking Advantage of the Cooperative Law

In 1946, Samson Kitutu and colleagues took advantage of the new cooperative law provision to quickly root for the formation of Bugisu Cooperative Union, whose purpose was to have own control and eliminate BCMC and foreign control of their coffee.

 Kitutu was a prominent evangelist for the protestant church and was leader of the Bugisu Welfare Association in the 1920s.

In the same year, the first two primary societies were formed and started operating. By 1949, 24 societies were formed.

In 1950, motivated by the strength of the 24 primary societies, the Bagisu refused to renew the contract with BCMC and instead contracted BCS resume the role of collecting coffee.

BCU Formation

The cooperative idea of 1931 came to fruition in 1954, thus the formation of Bugisu Cooperative Union.

Arabica Coffee became Bugisu coffee in its true sense. BCU offered an institutional framework for achieving control over their primary source of livelihood.

It became a symbol of Bugisu Unity. It was an agency of economic nationalism and a comprehensive framework through which Gisu solidarity could be expressed.

BCU Leadership

Upon formation, Samson Kitutu was elected the first president of BCU. He was succeeded by S.K. Mutenyo in 1958. X.M.M Gunigina became the third BCU president in 1962.

BCU Influence

At the time of Uganda’s Independence (1962), BCU was a very strong establishment. BCU was more prominent than the ruling Democratic Party. BCU could take national political power if they wanted.

More than two-thirds of Bagisu saw BCU as distinct from government. 87.1% of the Bagisu believed that BCU could influence government policies.

96% of the Bagisu could name at least one BCU leader while 83.8% could name two or more leaders of the union.

Coffee Marketing

Wagisi, one of the prominent leaders of the union mounted an aggressive campaign to market Bugisu coffee directly on the Nairobi market rather than through the agency of Europeans and Asian trading companies.

He argued that they would make good money from Nairobi to construct a 90,000 pound hotel and BCU office block in Mbale. These two properties are standing in Mbale town today.

Government Backlash

The exceptional potency of BCU threatened the sovereignty of the then DP regime that lasted from 1961-1962. They hatched a paradoxical solution that would divide the Bagisu and reduce the dominancy of BCU.

The central government encouraged the formation of a rival group Bugisu Coffee Marketing Association (BCMA) and supported mercurial S.G.Muduku, the then Member of Parliament, to become the association president.

Muduku was so politically fluid that in1961, he was elected Member of Parliament on UPC ticket and in a few months (1962), he was a member of the ruling Democratic Party.

BCMA quickly got a buying license and went on to buy coffee from Bugisu land at a superficial price of 50/= per kilo.

BCU was forced to increase buying price to 40/= from 30/= per kilo. But BCMA lived as long as DP regime lasted.

BCU Non-Political

BCU was vaguely associated with UPC’s S.K. Mutenyo, who replaced Kitutu as DP president in Bugisu sub region.

At the same time, he was a close ally to J.N.K Wakholi Wakholi, a UPC Member of Parliament.

X.M.M. Gunigina, who succeeded Mutenyo, was a DP politico.

Despite the political advantage that BCU had, it chose not to go into politics.

Although BCU leaders were politicians or closely linked to key district political figures, they chose to serve farmers.

Even when BCU leaders came from different political parties (UPC and DP), their cause for farmers were undivided.

It should be noted that BCU did not correlate with party cleavages. Kitutu, the father figure of the cooperative movement was hostile to political parties.

BCU had DP presidents when DP regime was in place but this did not affect the sovereignty of union politically.

In the election of BCU leaders, candidates were estopped from using party symbols. They used their membership cards.

Eric Mukhwana is the Founder/Managing Director, MUER Response Ltd – Integrated Marketing Communications. muerresponse@gmail.com

 

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