A Case for Coffee
Another highlight of the trip was a stimulating case discussion on coffee production led by two local alumni, Thomas Dixon (MBA ’88) and Tim Piper (MBA ’88). Dixon and Piper both work for the Tanzania arm of TechnoServe, a global nonprofit dedicated to providing business solutions to rural poverty. TechnoServe’s chairman is Paul Tierney (MBA ’68). Profile of Paul Tierney, Dec. 2002.
In the spectacular setting of a safari tent perched on an escarpment overlooking Lake Manyara, the safari participants returned to their HBS roots and closely examined the case “TechnoServe and the Tanzanian Specialty Coffee Industry,” coauthored by HBS assistant professor Peter Hecht. Tanzania has the climate and altitude to produce specialty coffee that commands premium prices in the world market. Yet, income from coffee exports has steadily fallen since 1995. Ninety-five percent of Tanzania’s coffee is grown by 400,000 small-scale farmers owning fewer than ten acres of land.
After much back and forth about the numbers in the case, the difficulties of working with geographically separated small farmers, the challenges of producing high quality coffee, and overcapacity in the global coffee market, Tom Dixon, who is director of TechnoServe’s operations in Tanzania, explained the bigger picture.
Noting that completely eradicating poverty is not a feasible goal for TechnoServe, Dixon observed that “if you are going to be poor, it is better to be poor in a rural area than in an urban area. We are trying to help people make it in rural areas. We don’t want them to leave because they have no opportunities.” Admitting that there is much work still to be done, Piper noted that TechnoServe was making progress: “Business people are no longer frowning. The commercial environment is improving,” he said simply.
After the discussion, the TechnoServe representatives joined the alumni travelers for dinner where many of the conversations continued as the group learned more about the challenges of underdevelopment. At the end of the trip, Tim Piper generously invited those who had a layover in Dar es Salaam to dinner at his house, where we were joined by his family and Michael Owen, the acting U.S. ambassador to Tanzania.
For more information on TechnoServe, visit www.technoserve.org.
