Poor Farmer

T he government of Ethiopia is tightening its grip on the coffee sector. In a latest development in the saga of the Ethiopia Commodity Exchange (ECX) and what appears to be the government's well orchestrated plan to control the sector, a government official warns, "individuals found dealing coffee out of the [newly established coffee trading] centers will receive a 20 year prison term and up to 50,000 birr fine." This new development explicitly reveals the government's interests in the exchange from the get go. The ECX, a trading system meant primarily for grains and pulse, commenced trading operation in May, 2008. In August 2008, the government passed the new coffee law that requires all coffee trade to be conducted at the ECX. The exchange, which claims to be independent and a free marketing system established to help eliminate famine, began trading coffee in December 2008. On March 25, 2009, the government confiscated 17,000 tons of coffee beans from p...

By Wondwossen Mezlekia September 21, 2009 The Economist magazine describes the Ethiopian government as "one of the most economically illiterate in the modern world." This portrayal, albeit contentious, is not without truth. But, the government's recent meddling in the coffee trade has to do more with the government's socialist-inspired economic policies than economics per se. As if to prove this, Venezuela's Chavez, another diehard socialist, just took actions similar to what Prime Minister Meles Zenawi did earlier this year. Last week, President Hugo Chavez accused the country's largest coffee producers, Fama de America and Cafe Madrid, of smuggling coffee out of Venezuela to circumvent government coffee controls and vowed to nationalize they refuse to heed. Chavez was quoted as saying "if they give me an excuse, I'll nationalize them." This must be why some critics questioned the viability of a free commodity exchange in Ethiopia. But, te...

An advocate for poor coffee growers debates with a government official the quality of specialty coffees and the freedom of Ethiopia's free market Photo: Courtesy of the VOA Note: The debate was aired in three parts on Aug 21, Aug 28, and Sept 4, 2009. The audio may be accessed from the VOA program audio archive located here . For the convenience of many of this blog's readers, I will try to translate and post the transcript here very soon. ------- By Alula Kebede Voice of America September 04, 2009 Washington, DC - In a three-part Crossfire, Ethiopian coffee advocates debate whether the market for Ethiopia's specialty coffees is deteriorating and how the Ethiopian Commodities Exchange represent the government's attempt to promote the new market while at the same time tries to control it. The debate on these and other related issues is taken up by Eyob Tekalegn, the head of finance & business affairs section at the Ethiopian embassy in Washington, D.C. and ...