Conflict and Coffee in Burundi 135management of a stabilisation fund for the sector to offset losses when inter-
national market prices for coffee are low.
The role of OCIBU is thus broad. It also encompasses establishing quality
standards and classification systems as well as monitoring of financial oper-
ations and performance of institutions in the sector. Ultimately, it becomes
the owner of the final product ready for export.
The Societes de Gestion des Stations lie hvage (SOGESTALs) are responsi-
ble for the management and operations of washing coffee. The SOGESTALs
own and operate all five washing stations in Kayanza, Kirimiro, Kimndo,
Muminva and Ngozi. They are paid for their services through the general
payment schedule as determined by OCIBU. Owing to low production and
remuneration, these bodies have had to be subsidised to cover their operat-
ing losses.
The hulling operations in the coffee industry are undertaken by Societe de
Deparckage et de Conditionnment (SODECO). They process the parchment
coffee from private traders and SOGESTALs through sorting of the green cof-
fee and bagging it for shipment. There are two SODECO-mn hulling factories
in Gitega and Bujumbura, with a combined processing capacity of 60 000
metric tons for semi-washed and fully washed coffee. The government, to
stimulate competition, has recently licensed two small private hulling com-
panies. These are SONICOFF and SIVCA, both of which are in operation.
Prior to structural reforms in the coffee subsector sponsored by the World
Bank and the Caisse Francaise de Developpement between 1990 and 1996,
OCIBU and the monopoly auction company Burundi Coffee Company (BCC)
exercised complete control of the sector. OCIBU owned and operated the
washing and hulling subsidiaries, aside from its other functions detailed
above, while BCC retained the sole rights for all Burundi coffee auctions. In
addition to the roles of OCIBU detailed above, the state firm played the role
of financial intermediary between commercial banks and players in the sub-
sector, borrowing on their behalf. The stranglehold on the sector by OCIBU
and BCC99 stifled competition and reduced production. Coffee proceeds
attracted a levy from the government, also determined by OCIBU. The fol-
lowing reforms have been undertaken in the operations and structure of the
subsector:
The services provided by SODECOs and SOGESTALs were previously pro-
vided under the aegis and broad management of OCIBU. The assets of the
two bodies have been transferred to a new asset management facility
Service du Patrimoine. The new OCIBU special organ leases washing sta-
tions to SOGESTALs and the hulling facilities to the two SODECOs. It is
envisaged that Service du Patrimoine will oversee the sale of the assets of
the two bodies to private investors when the coffee subsector is fully lib-
eralised.