Ethiopian coffee farmers' livelihood improving

Note: The new coffee law in Ethiopia requires that all coffee trade be conducted through the Ethiopia Commodity Exchange (ECX) but cooperatives and large-scale commercial farms are exempt from this requirement. The latter are allowed to bypass the ECX system, which was originally designed for the trading of grains and pulses before the government turned it into a coffee auction. The Oromia Coffee Farmers' Cooperative Union (OCFCU) is one of the entities that is currently enjoying the benefits of Direct Trade - a business model that enables producers to transact with and sell their produce to the ultimate buyers across the globe. There are plenty evidences that Direct Trade, which is the norm in Specialty coffee trade, is a preferred business model in terms of ensuring the sustainability of coffee production, farming communities' livelihood, and the environment, but millions of smallholder farmers in Ethiopia are kept out of this model as they are legally barred from doing business with the outside world. – Wondwossen
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Walta Information Center (WIC)

August 27, 2010

The Oromia Coffee Farmers Cooperative Union (OCFCU) said the livelihood of coffee growers is improving better than ever before following the current rise in coffee price at the international market and expansion of market information.

Union General Manager, Tadesse Meskela, told WIC today that members of the union have managed to build better houses and send their children to school. “The Ethiopian coffee farmers were not benefiting more from their coffee because they had no market information and were selling at low price to local traders over the past years,” he said.

Tadesse said OCFCU was established mainly to bringing more money to the pocket of the coffee growers by selling their coffee in a better price and encourage them to produce competitive quality coffee.

He said the union purchases coffee from farmers exactly the same as the local market price and pay them back 70 of the net profit. The remaining 30 per cent will be utilized to cover the union’s expenditure and social benefit.

He said the union in close collaboration with the Oromia State Agriculture and Rural Development Bureau offers a capacity building training to members of the union so as to improve the quality of Ethiopian coffee.

He further said the union has constructed 20 elementary and 5 high schools, 7 clinics, 16 potable water facilities, and bridges as well as installed coffee processing and drying machines to the farmers.

He said the union secured 52 million birr income from coffee exported to USA, Japan, Australia, New Zealand and other European countries last budget year.

According to Tadesse, many foreign coffee companies are showing big interest to purchase Ethiopian coffee, which is well-known for its unique aroma and flavor.

Established in 1991 E.C, OCFCU has currently about 171 cooperatives that embrace over 160,000 coffee grower farmers. Its capital also reached about 90 million birr.