There are millions of farmers in Ethiopia who produce thousands of tons of coffee, making the country the fifth-largest producer in the world after Brazil, Vietnam, Columbia, and Indonesia.
Since recently, various activities are being undertaken to promote Ethiopia’s coffee thereby boost its presence in the international coffee market. For instance, the Ethiopian Government is planning to construct a USD 50 million coffee park in partnership with the Korean government.
The park, which will sit on 30 hectares of land in Ethiopia’s capital Addis Ababa, will play a huge role in promoting the country’s coffee products to the global market. It will have a coffee museum and a coffee market center among many other facilities. The project is expected to be completed in three years time.
Around 95 percent of the Ethiopian coffee is produced by small farmers who work in their own farms and sell their produce to middlemen. These intermediaries are widely suspected of short-changing them on the huge profit margins.
Although the Ethiopian coffee possessed the quality of unique flavor in cafes run by an international chain, sadly, millions of coffee farmers do not reap the benefits of their sweat.
According to documents, for every kilogram of coffee beans an Ethiopian farmer sells for about 3 USD, it is estimated that people up in the supply chain make around 200 USD.
The multi-million dollar coffee business constitutes a substantial percent of Ethiopia’s foreign exchange. However, the performance of Ethiopia’s export trade and the benefit of growers have been challenged under various circumstances. Elicit trade, contraband, and failure in promoting the unique coffee products are posing potential challenges.
Even though Ethiopia has improved practices and made important progress all along its coffee value chain, it’s coffee farmers are still lagging behind. Improved coffee plant varieties remain out of reach for too many farmers. The adoption of better processing techniques has been slow, and the rising potential for disease and weather shocks due to climate change is leaving farmers increasingly vulnerable.
To avert illicit trade and contraband, Ethiopia has established a command post under the leadership of the Deputy Prime Minister. On the other hand, the country is going to host Cup of Excellence (CoE) in the coming march with the aid of the United States Agency for International Development and Feed the Future Ethiopia Value Chain (FTFE-VCA).
This value chain has been a market place where the well-informed middlemen, traders, and exporters make high-profit margins at the expense of farmers who are not aware of the market price.
According to Gizat Worku, Chair of the Ethiopian Coffee Exporters Association, the COE will open doors for smallholder farmers on the world stage, giving them a platform to showcase Ethiopian coffee.
The association and stakeholders are providing awareness-raising for coffee producers regarding the supply process of Ethiopia’s specialty coffee and the overall criterion of the competition.
According to the International Food Policy Research Institute (IFPRI) coffee is one of the most important globally traded agricultural commodities, with consumption occurring mostly in developed countries and production in developing ones.
In global markets, Ethiopia’s Arabica coffee is valued for its unique taste. Ninety-five percent of the country’s coffee is cultivated by millions of primarily smallholder, often poor, farming households.
Yet despite its leading position in Africa and the positive changes made in the coffee trade in the last decade, the Ethiopian coffee sector is underperforming, according to recent research by IFPRI, the Ethiopian Development Research Institute (EDRI), and Bonn University’s Institute for Food and Resource Economics.
Ethiopian yields are slightly higher than those of Kenya and Rwanda, but lower than Uganda’s—and only one half to one third the sizes of major Latin American producers’. Ethiopian farmers, meanwhile, receive a smaller share of export prices compared to most other countries.
How to address these problems? A sustained combination of efforts can help. Increased access to and adoption of improved tree varieties, as well as other improved practices, would help to raise yields and to mitigate widespread disease issues. Better access to alternative savings options might lead to higher adoption of washed coffee practices, which could generate higher export earnings.
Finally, a trading sector that allowed international incentives to reach the local producer, as well as traceability to individual producers that are currently anonymous because of the market centers’ institutional opacity, might improve the perception among farmers that increased quality offers substantial financial rewards.
The Ethiopian Herald, November 28/2019
BY LAKACHEW ATINAFU
