The Relationship Between Coffee and Conflict in Uganda

When you think of activities relating to coffee you might think of an early morning coffee run before you get to the office, getting coffee with friends, brewing it in your own home, yet not many, if any, relate coffee to conflict. In a study done by Middlebury College last year, economic researchers looked at how coffee prices and conflict were related across Uganda over a period of 12 years (2002 – 2014). They found that coffee price fluctuations had effects over different aspects of conflict in the country and added to the conversation as to how fluctuation in commodity prices in a country may affect different regions of it.

For their study, they observed how rising coffee prices affected 56 districts in Uganda over a 12-year period (2002 – 2014). During this period coffee prices more than tripled which led to an increase of 3% in the likelihood of conflict, 10% in the total number of conflicts, and 13% in the number of conflict fatalities in districts where coffee production was the main source of income. They classified conflict into three types as well to see which form of conflict is being affected the most by the rising coffee prices. These three categories were: the conflict between rebel groups and the state, riots/protests, and violence against civilians.

The Coffee Industry in Uganda

Coffee is the leading export product for Uganda’s economy and it helps provide income to over 3.5 million people in the country spanning the entire industry from farmers to exporters. Even though coffee is the leading export for Uganda it is barely consumed domestically (~ 4% to 10% of the country’s produced coffee) making coffee an exclusively export-related product within the country. Coffee producers in Uganda also stick to the model seen in other coffee producing countries where producers are mostly small farmers with small family-owned farms.

Farmers will cultivate and pick their coffee themselves and then sell their beans to producers which process the coffee for export.

A surprising thing within Uganda is that, even though it is the country’s main export, the industry is very independent and does not experience any taxation or levies on it. Aside from a 1% fee on all exported coffee, the Ugandan government collects virtually nothing from the industry.

Up until 1992, Uganda’s coffee industry was controlled by the country’s Coffee Marketing Board. The Board determined the country’s coffee prices and usually set prices at a discount of the average global price. After 1992, this Boards was abolished and the current Uganda Coffee Development Authority was established. Under this new organization, coffee producers have been able to capture a larger share of the export price of coffee (~ 64% to 88% of the export price).

Conflict in Uganda

One of the leading contributors to the conflict in Uganda are insurgencies (a form of revolt or uprising). The Lord’s Resistance Army (LRA) is the best-known group in the country. For the last 20 years, it has been responsible for 20,000 children abductions, the murder of many civilians, and the displacement of over 2 million people. Aside from this group, there have been more than twenty other groups that have been established since 1986 when President Yoweri Museveni came to power. These groups have continuously attempted to displace the current government. What has been interesting as well is that some of these groups, most notoriously the Allied Domestic Forces (ADF), have used coffee as cash crops to fund their operations and making coffee a conflict resource.

What Did They Find?

After their 12-year study, the researchers from Middlebury College found that higher coffee prices will indeed increase the likelihood of conflict and chances of a conflict having fatalities. They also found that higher prices of coffee led to an increase in the number of total conflicts occurring the country and the number of total deaths due to conflict. Regarding their three categories for conflict, they found that increasing the price of coffee also contributed to the higher occurrence of two out of the three, conflicts between rebels and the state and violence against civilians. They did not find any relationship between coffee price increase and riots/protests.

So why is this so? Why do increasing coffee prices increase the occurrence of these events in the country? A leading theory for an increase in commodity prices and conflict had been that if the prices for these commodities increase then the state becomes more valuable thus making the state a “prize.” However, since coffee is untaxed in Uganda this cannot apply to this case. For this case, the researchers presented two explanations: higher coffee prices reduce credit constraints (inability to borrow money) of rebel groups allowing them to finance their operations and that higher coffee prices lead rebel groups to target civilians involved in coffee production in order to steal their income.

Why Is This Important?

The researchers highlighted two contributions their findings make to the field of conflict economics. One of these is that helps to support the idea that conflict is influenced by differences in commodity prices and not just specifically coffee. They give the example of Colombia where oil is the main conflict product and, while coffee is a major product there as well, it does contribute to any conflict. The second contribution is that it adds more information when looking at the relationship between income and conflict in sub-Saharan Africa. As they put it, “understanding the relationship between commodity price shocks and conflict in this part of the world is of both academic a policy interest.”

The finding for this study was published in the Journal of African Economies in February 2017.