Part 2: Who is in charge of coffee?

A Record Is Not Enough

Ethiopia's coffee windfall, and what reached the farm gate

By Wondwossen Mezlekia

Part 2 of a five-part series. Part 1 published June 26, 2026.

 

Part 2: Who is in charge of coffee?

Coffee in Ethiopia is not merely an export crop, a drink, or a culture. It is one of the country's largest non-state systems of work. Around fifteen million Ethiopians depend on coffee for a livelihood, and it is grown on roughly four million smallholder farms. What those households earn is not set by a single employer. It is set by a long chain of buyers, prices, and rules. So the question of who governs that chain is not bureaucratic housekeeping. It shapes how millions of rural households live.

I remember the optimism around the Commodity Exchange. When coffee went onto the floor in December 2008, it was sold as an answer to problems that had built for years: poor price information, late payment, unreliable contracts, weak grading, and smallholders with little bargaining power. Some of that optimism was earned. Price discovery improved. Payment and contract enforcement improved. Grading and warehousing became more orderly.

The cost took longer to show. It was traceability. Once a lot was graded and folded into a broad regional bucket, the trail back to the farm, the washing station, and the cooperative went cold. For much of the crop, a buyer could know the region but not the farm. I spent a long stretch of this blog writing about what that did. The problem was never that an exchange existed. It was that the exchange became compulsory for coffee and treated a differentiated crop as one more commodity.

Since then, the state has been opening exits from the system it built. The 2017 coffee proclamation, the 2018 implementing regulation, and later policy changes opened direct channels alongside the ECX. In 2019, qualifying smallholders and commercial farms gained a route to export directly. In 2021, the Authority's vertical-integration model gave exporters another way to buy from producers without going through the ECX. The Exchange that once sat in the middle of the trade is now one road among several.

The re-established Coffee and Tea Authority was supposed to address part of the problem. Ethiopia needed a federal institution that could set standards, coordinate policy, supervise export quality, collect market information, and give the coffee sector a center of gravity after years in which responsibility had been scattered across ministries and agencies.

There is an older institutional lesson here that Ethiopia has not fully absorbed. In May 2004, the government dissolved the Coffee and Tea Authority and scattered its functions through the newly restructured Ministry of Agriculture and Rural Development. More than eleven years later, in December 2015, it put the Authority back after years without one institution responsible for holding production, quality, marketing, and development together.

I do not mean to romanticize the old Authority. It had problems, and no institution is saved merely by keeping its sign above the door. But there is a familiar Ethiopian official habit in this, one that predates the current government and belongs to no single administration: dismantle a specialized institution, disperse its work in the name of reform, discover years later that nobody is carrying the whole burden, then present the return of a version of the old body as a fresh achievement.

Bringing the Authority back was necessary. It did not settle the larger question. Coffee cannot be run as a collection of disconnected offices, directives, and emergency meetings.

The Authority can issue directives, coordinate quality control, administer parts of the export system, and work with regional coffee bodies. What it cannot do by administrative instruction is settle the political question underneath the trade: whether coffee is governed first as a federal export and natural resource, or as a regional commercial crop produced and policed where it grows.

The law itself reflects the compromise. It assigns functions to the Authority and to the relevant regional organs. That may be sensible coordination on paper. In practice, where federal and regional rules conflict, it can leave everybody with a role and nobody with final responsibility. The gap was visible again in January 2026. A report on a Federal Auditor General operational audit said ECX lacked a system to ensure that coffee intended for the domestic market was traded through the exchange as required. ECX replied that its founding proclamation did not give it regulatory or supervisory power. The Authority said regional bodies oversee domestic coffee, while ECX data are not organized and shared in a way that makes monitoring easy. The Exchange sends data; someone else is supposed to police it. That is how the responsibility disappears.

The Institute for Security Studies described the rest of the problem in 2022. The federal government treats coffee as a natural resource under its constitutional mandate, while Oromia, where most of it grows, treats coffee as a regional commercial crop and legislates accordingly. The two regimes criminalize related conduct differently, so cases brought under regional law tend to collapse on appeal at the Federal Supreme Court's Cassation Division. An organized contraband trade has settled comfortably into the gap.

The answer is not to rebuild the old compulsory machine. But it is not one answer either. Some of this is administrative work that should have been done years ago. Some of it is a constitutional question. Ethiopia has been treating both as though another directive can settle them. It cannot.

Who licenses a trader, who inspects a warehouse, who holds the transaction data, who investigates a diversion case, and who reports the result can be settled now. The 2021 intergovernmental-relations proclamation already gives federal and regional executives a route to make working arrangements and report what they have agreed. The Authority and the coffee-producing regions should use it.

They should sign and publish a working agreement that follows coffee from the farm to export: licensing, quality inspection, transaction records, traceability, domestic diversion, export compliance, investigation, and prosecution. It should say who acts first when coffee leaves the lawful channel, who receives the case next, and who answers when a case disappears. Both levels of government should be working from the same transaction record, not trading excuses after the coffee is gone.

That would deal with much of what is now called confusion. It would not settle the question that keeps cases dying at cassation. A meeting of officials cannot tell a court which law must prevail. An agreement between executive offices cannot decide whether coffee is first a federal export and natural resource or a regional commercial crop. The Authority cannot settle that. Neither can the Exchange.

If the conflict is constitutional, it should be put to the Council of Constitutional Inquiry and, through it, to the House of Federation, which the Constitution gives the power to decide constitutional disputes. If the problem is narrower, if the coffee laws are simply incomplete or badly written, then the federal legislature should amend them and say plainly which institution leads, what law governs each offence, and how the case reaches court.

The point is not to take coffee away from the regions. The regions are where coffee grows, where land is administered, where local trade happens, and where most of the information begins. But a national export crop cannot be governed by rules that collapse when enforcement reaches court.

The public should be able to see the agreement, the transaction data, and the enforcement record: who inspected, who did not, who prosecuted, who did not, and why. Until that happens, the trader with the best lawyer, the deepest cash, and the closest political access will continue to understand the system better than the farmer does.

Source note: Coffee livelihoods: Royal Botanic Gardens, Kew, Coffee Farming and Climate Change in Ethiopia (2017) (around 15 million livelihoods and roughly 4 million smallholder farms) | ECX traceability: Leonard Leung, Eroded Coffee Traceability and Its Impact on Export Coffee Prices for Ethiopia (2014) | Direct-trade reforms: USDA FAS, Ethiopia: Coffee Annual (2021, 2025, 2026) | Authority history: CFC-ICO, Scaling Up Enhanced Processing Practices in Ethiopia (May 2004 dissolution), and Council of Ministers Regulation No. 364/2015 (December 2015 re-establishment) | Coffee Marketing and Quality Control Proclamation No. 1051/2017 | Capital, ECX Denies Responsibility for Coffee Trading Oversight Gaps (January 4, 2026), reporting an Office of the Federal Auditor General operational audit | Institute for Security Studies, Organised Crime Pours Cold Water on Ethiopia's Coffee Exports (June 2022) | The System of Inter-Governmental Relations in the Federal Democratic Republic of Ethiopia's Determination Proclamation No. 1231/2021 | FDRE Constitution, Articles 62, 83, and 84, on constitutional interpretation, the Council of Constitutional Inquiry, and the House of Federation.

 

Next in the series, Part 3: The coffee Ethiopians cannot buy in birr.

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