By Wondwossen Mezlekia
for The Ethiopian American *
July 01, 2007
It was about a millennium ago that the legendary goat herder Kaldi discovered coffee in Kaffa, Ethiopia, according to substantiated folklore. Since then, the bean has traversed continents, transforming societies, religions, and economies while Ethiopia, the birthplace, watches. Today, coffee is the second most traded commodity on the international market next to oil, but unlike oil, coffee has not brought wealth to its country of origin.
The aggressive tendency of globalization to deprive its weaker members from claiming their rightful share of the value chain has started to alarm global citizens. Ethiopia, too, has finally woken up just in time for its new millennium (Julian calendar), and is now sorting out intellectual property (IP) laws, which experts believe are promising tools to help the country catch up with the rest of the corporate world. The efforts to utilize IP tools for digging the country out of poverty, however, have not been free from obstructions. Its first and major obstacle was a dispute with the coffee giant Starbucks, over some of the country’s famous coffee marks, Harar, Sidamo, and Yirgacheffe.
Oxfam rallied tens of thousands of people around the globe in support of Ethiopia, and a cheering world, ignited by the flame of anger, greeted the country’s plan to utilize its IP resources as a development tool. The resounding voices of conscious consumers against the current international trade order eventually helped the high profile dispute, perhaps the major in recent history, end in just eight months after Oxfam made it public.
The government and Starbucks have just declared a resolution to their dispute that has been running for a little over two years. In June 2007, after about two months of closed-door negotiations, representatives of Starbucks and the government of Ethiopia issued a joint press release announcing that they have reached an agreement. However, the terms of their agreement are not public to date.
Licensing could potentially benefit Ethiopia and empower its farmers, but signed agreements will only be as good as the terms and conditions in the agreement.
As we continue to wait to see the relevance of the terms of the said agreement with Starbucks, it is worth noting that 1) the trademark project is an opportunity for exposure to the inner-workings of the corporate world, and a chance to produce many people with strong business acumen; and 2) the project will address only a fraction of the problems of Ethiopia’s coffee sector, whereas the more serious and fundamental problems await actions.
The recent media publicity and the unanticipated consequent mass empathy towards the poor farmers should not intoxicate the country enough to pacify it back to sleep for another thousand years. If Ethiopia is now ready to join the world in advancing its interests in the coffee industry, the country needs to build momentum by making the right choices which are well overdue.
In Ethiopia, productivity ranks the least in the world at about a quarter of the average production per hectare as compared to competing countries (less than 5 quintals per hectare v. 20 quintals per hectare); the current coffee marketing structure is so inefficient and access to market information so scant that farmers receive only about 25 percent of the export price of coffee; about 80 percent of coffee farmers are not organized in any form of cooperative and even those few cooperatives lack the expertise in management, marketing, accounting and salesmanship; support for coffee quality improvement is almost non-existent; coffee growing regions are neglected with respect to investments on socio-economic infrastructures and research & development despite generating about 60 percent of the country’s foreign currency; the country’s natural forests which are mainly concentrated in the coffee growing regions are rapidly being depleted; etc…
These are some of the major problems responsible for the current state of the coffee industry in Ethiopia, and according to recently published research papers, there is no meaningful strategic plan in place that would tackle any part of those problems in the foreseeable future either. The state of the coffee sector is a cumulative effect of the choices made by past and present decision makers.
If the government is really serious about changing the course of the coffee trade for good, today’s policy makers and those in power ought to, first, differentiate between “political economy” and economics; second, learn how to take advantage of currently available donor interventions and the various market based approaches; third, incorporate people’s needs and wants when designing economic policies as opposed to focusing solely on the government’s wants; and lastly, display a strong conviction that trained human resources are crucial for successful implementation of any development plan and open the opportunity for everyone.
The coffee trademark project offered another opportunity to make the right choices which could revitalize the Ethiopian coffee industry.
The best time to have made those choices was a millennium ago; the next best time is today.
-------
Syndicated from the quarterly online journal, The Ethiopian American
for The Ethiopian American *
July 01, 2007
It was about a millennium ago that the legendary goat herder Kaldi discovered coffee in Kaffa, Ethiopia, according to substantiated folklore. Since then, the bean has traversed continents, transforming societies, religions, and economies while Ethiopia, the birthplace, watches. Today, coffee is the second most traded commodity on the international market next to oil, but unlike oil, coffee has not brought wealth to its country of origin.
The aggressive tendency of globalization to deprive its weaker members from claiming their rightful share of the value chain has started to alarm global citizens. Ethiopia, too, has finally woken up just in time for its new millennium (Julian calendar), and is now sorting out intellectual property (IP) laws, which experts believe are promising tools to help the country catch up with the rest of the corporate world. The efforts to utilize IP tools for digging the country out of poverty, however, have not been free from obstructions. Its first and major obstacle was a dispute with the coffee giant Starbucks, over some of the country’s famous coffee marks, Harar, Sidamo, and Yirgacheffe.
Oxfam rallied tens of thousands of people around the globe in support of Ethiopia, and a cheering world, ignited by the flame of anger, greeted the country’s plan to utilize its IP resources as a development tool. The resounding voices of conscious consumers against the current international trade order eventually helped the high profile dispute, perhaps the major in recent history, end in just eight months after Oxfam made it public.
The government and Starbucks have just declared a resolution to their dispute that has been running for a little over two years. In June 2007, after about two months of closed-door negotiations, representatives of Starbucks and the government of Ethiopia issued a joint press release announcing that they have reached an agreement. However, the terms of their agreement are not public to date.
Licensing could potentially benefit Ethiopia and empower its farmers, but signed agreements will only be as good as the terms and conditions in the agreement.
As we continue to wait to see the relevance of the terms of the said agreement with Starbucks, it is worth noting that 1) the trademark project is an opportunity for exposure to the inner-workings of the corporate world, and a chance to produce many people with strong business acumen; and 2) the project will address only a fraction of the problems of Ethiopia’s coffee sector, whereas the more serious and fundamental problems await actions.
The recent media publicity and the unanticipated consequent mass empathy towards the poor farmers should not intoxicate the country enough to pacify it back to sleep for another thousand years. If Ethiopia is now ready to join the world in advancing its interests in the coffee industry, the country needs to build momentum by making the right choices which are well overdue.
In Ethiopia, productivity ranks the least in the world at about a quarter of the average production per hectare as compared to competing countries (less than 5 quintals per hectare v. 20 quintals per hectare); the current coffee marketing structure is so inefficient and access to market information so scant that farmers receive only about 25 percent of the export price of coffee; about 80 percent of coffee farmers are not organized in any form of cooperative and even those few cooperatives lack the expertise in management, marketing, accounting and salesmanship; support for coffee quality improvement is almost non-existent; coffee growing regions are neglected with respect to investments on socio-economic infrastructures and research & development despite generating about 60 percent of the country’s foreign currency; the country’s natural forests which are mainly concentrated in the coffee growing regions are rapidly being depleted; etc…
These are some of the major problems responsible for the current state of the coffee industry in Ethiopia, and according to recently published research papers, there is no meaningful strategic plan in place that would tackle any part of those problems in the foreseeable future either. The state of the coffee sector is a cumulative effect of the choices made by past and present decision makers.
If the government is really serious about changing the course of the coffee trade for good, today’s policy makers and those in power ought to, first, differentiate between “political economy” and economics; second, learn how to take advantage of currently available donor interventions and the various market based approaches; third, incorporate people’s needs and wants when designing economic policies as opposed to focusing solely on the government’s wants; and lastly, display a strong conviction that trained human resources are crucial for successful implementation of any development plan and open the opportunity for everyone.
The coffee trademark project offered another opportunity to make the right choices which could revitalize the Ethiopian coffee industry.
The best time to have made those choices was a millennium ago; the next best time is today.
-------
Syndicated from the quarterly online journal, The Ethiopian American
Thanks brother for an excellent analysis. A spade is a spade but it takes courage to call it as such and your recommendations have done just that. I agree with you and like your powerful closing: "The best time to have made those choices was a millennium ago; the next best time is today." I wonder if those "politico" guys get it though.
ReplyDeleteI have been following your blog for several months. You have done an amazing job. You are an inspiration. God bless you.
This is such a true story, after a great milestone like this one, the next major question to be paused is 'then what'?. what should be the role of the Et governemnt and what should be the role of any concerned citizen.
ReplyDeletegetting visibilty in the face of corporate world is one thing, following through and making sure things materialize is the essense of the full strugle.
thanks a lot for sharing Wondwossen. I'm with you, it is never late.