BY HIZKEL HAILU
Though Ethiopia has been fortunate to have relatively low infection, morbidity, and mortality rates as a result of the global COVID-19, there had been too much concern about its effect on the economy, particularly in the export sector. In fact, various studies predicted that agriculture exports will likely be the hardest hit. This raises a question on the performance of the country’s exportable commodities, particularly coffee.
Ethiopia’s economy has strong detachment with coffee. The country is the motherland of Coffee Arabica and is endowed with a rich variety of other coffee types. Ethiopian coffee is rich with original flavor and aroma because of the geographical (altitude, soil, temperature, rainfall, topography, ecology), genotypic and cultural variety within the country.
Ethiopia’s coffee production has grown significantly over the years. Only five years ago, coffee made up 40 percent of Ethiopia’s foreign export earnings, and today it accounts for roughly the highest foreign export earnings.
In addition to an estimated 15 million Ethiopians relying on the coffee industry for their livelihood, the globally adored beverage has become a central part of Ethiopia’s culture,” ‘TripScout, Inc’ once stated on its report.
The report also indicated that Ethiopia is one of the top organic coffee suppliers to the world market, adding that Ethiopia’s coffee is characterized by its fine acidity and rich body with a spicy, winy and sweet taste.
Ethiopian coffee produces hard-type coffee beans, with intense flavors and aromatics. Fruit flavors are common in all regions, though the specific fruit character varies from region to region. Basically, Ethiopian coffee is organically produced and it is low yielding with the highest cup quality.
The internationally known and recognized Yerga Chaffee, Harar, Sidama, and Limmu coffee types have a unique flavor, fine color and acidity as well as rich body. Many rosters are willing to pay a higher price for Ethiopia’s speciality coffee.
During the last Ethiopian fiscal year, Ethiopia was the 6th and 1st Coffee Production Potential in the world and in Africa respectively with its well-known highest quality.
Shafi Umer, Deputy Director-General of the Ethiopian Coffee and Tea Authority told The Ethiopian Herald the authority has been closely working with coffee producers, unions, roasters, exporters and Ethiopian Commodity Exchange (ECX) to reinforce the country’s coffee export performance. “As a result, the country earned 854 million USD from the export of 270 thousand tons of coffee during the previous fiscal year ” he added.
As to him, the result indicates the coffee production and export potential of the country has increased by more than 40 thousand tons when it is compared to the performance in 2018/19 when Ethiopia exported about 230 thousand ton of coffee to the international market.
Even during the first four months of the current Ethiopian fiscal year, the country has earned more than 274 million USD from the export of 82 thousand tons of coffee to the international market. This was earned only from exporting coffee from the warehouse, he noted.
The country has been implementing a coffee sector reform for some time now, and the authority has effectuated new coffee marketing and quality control proclamation. It has also come up with various mechanism to resolve the major challenges that require policy intervention in the sector which are identified as low coffee productivity (qt/ha), low-value addition, and inconsistency in coffee quality.
According to him, the reform has brought alternative coffee transaction systems allowing direct export by small scale farmers and coffee suppliers. It also allows vertical integration among stakeholders.
The coffee sector reform is vital to strengthen linkage between investors and coffee farmers’ and cut down the market chain. The intervention has been highly supported with proclamations and guidelines, he added.
The new intervention further allows coffee producers to sale their products directly to suppliers, investors, coffee roasters, ECX and unions. This means it allows them to directly engage in the export market.
In addition to this, outdoors and vertical integration was created to reduce the long and tedious coffee chain among the farmers, suppliers and every actor engaging in the sector.
All in all, the new intervention helps to ensure traceability and sustainability of coffee marketing, and improve coffee production and quality. It also allows value-added coffee transaction and encourages out-grower scheme, he stated.
Shafi further explained the bright coffee investment opportunities that are available now. Conducive agroecology, organic Shed Coffee, income tax exemption, suitable air condition, rich genetic resources, availability of cultivable land and the unique test of Ethiopian coffee are some of the opportunities for investors to engage in Ethiopia’s coffee sector.
Foreign investors can work jointly with the local ones in value addition activities. Further, there are new and suitable coffee farmlands across the country with the potential to lure investment. It is also possible to cultivate coffee in Ethiopia using irrigation, he noted.
Apart from this, he noted that his office is working jointly with NGOs and other stakeholders to boost productivity in the sector with the view to increase export earnings.
At the time when the world’s economy is experiencing the effects of the COVID-19 pandemic, the Authority has been working to minimize the negative impact on coffee export performance. By collaborating with the National Bank and adopting state-of-the-art technologies, the authority has been able to apply new marketing strategies that helped to withstand the impacts of the pandemic.
“We have conducted successful preventive activities in collaboration with the government and all the stakeholders in the sector. This has helped us to maintain the market chain from regional states to the federal level to ensure uninterrupted coffee export.”
Likewise, different short and long term technical skills and other training that are vital for increasing the productivity of coffee and hence export performance have been provided to the farmers and unions. He further asserted that the government is providing new spices of coffee seeds and fertile and vast farmland to the farmers.
Goshu Gemede, 55-year-old farmer at Jimma city told The Ethiopian Herald that the new policy intervention has brought about significant change. Using the advantage of direct market linkage to sell out products to investors, suppliers and the export market, we have managed to improve our income,” he said.
“I have been laboring in my farm for over 30 years,” he said. “It is the source of life for me and my family. But despite our hard work, it was only the middlemen and traders who were earning the profit, while we were forced to live the life of poverty. The reform has opened a new door of opportunity for us and in changing this reality.”
The Ethiopian herald December 16/2020
