Poor Farmer

By Wondwossen Mezlekia poorfarmer@gmail.com December 20, 2011 The bulk coffee directive Last month, coffee buyers across the globe had a rare glimpse into Ethiopians' day to day experience, where haphazard policymaking is used by the government to interfere in and control people's business whenever it feels like it. A new directive requiring the shipment of coffee in bulk container (a process of filling coffee in ' dry containers' fitted with a liner, as opposed to loading coffee packed in 60-kilogram jute-bags ) suddenly surfaced in mid November and shocked the market. [1] It was revoked thirty days later because of pressures from foreign diplomats, plummeting sales, and a cloud of fear of losing coffee buyers for good.  It's not clear how it all began, but it appears some genius one day figured out the quickest way to "modernize the country's export packaging and shipment standards" and the government decided to begin shipping ...

By Asrat Seyoum The Reporter December 17, 2011 Photo: Courtesy of The Reporter On April 24, 2008 Bob Geldof, the renowned ex-rock star, who had strong ties to the country on account of rallying international help to the great Ethiopian famine of the 1984, kicked off the first modern commodity exchange market in the country. The irony that Geldof, the very person who campaigned to feed millions, ringing the bell to commence a modern grain market in Ethiopia apparent, hopes for Ethiopian Commodity Exchange (ECX) to redefine the country’s agricultural commodities market landscape was very high. And ECX’s first pick to start its operation was the oldest and the most prominent cash-cow in the economy: coffee. The move from the old coffee board and auction system to the new anonymous trading system was never easy to say the least. Nevertheless, close to three years  on ECX floor, the bumpy performance cannot be attributed to adjusting to a system alone; both the...

By Birhanu Fikade The Reporter December 17, 2011 The Ministry of Trade (MoT) pulled back the latest coffee directive, which ordered all coffee shipments from the country to be in loose container packaging format, after its month long tenure in the sector. Following the enactment of the directive through a letter written to the Ethiopian Coffee Exporters Association (ECEA) by the minister of state, Yacob Yala, the coffee sector appeared in a big shock and the export revenue was declared to be in a danger zone. On the other hand, international coffee importers as well have voiced their opposition to the authorities saying that the measure will be a business suicide for the sector.  However, the ministry appeared to be insistent about the loose container shipment mechanism in the coffee export sector until late this week. Previous meeting with the minister of state were dispersed without any change to the new rule and some of the exporters continued business as usual, ...

By Staff Reporter The Reporter December 14,  2011 The mandatory bulk container shipping regulation instituted by the Ethiopian government on November 11, 2011 has spurred a rush of complaints from foreign buyers. Bulk Container Shipping uses one container size bag into which coffee is stored instead of the conventional 60 kilogram bags. German and Switzerland Associations representing major importers of Ethiopian coffee have written letters in opposition to the mandatory bulk container shipping Ethiopian embassies, Foreign Ministry and Minister of Trade. According to sources 10 Associations of Ethiopian coffee importers amongst which are the major importing countries have voiced dissatisfaction with the Bulk Shipment of Coffee regulation and there are reports of them turning to other exporting countries as a result. Sources further disclosed that Colombian and Kenyan Coffee Exports have risen in the Arabica type category of the international coffee trade, and th...

By Desire Nimubona Bloomberg December 11, 2011 Burundi’s coffee growers threatened to stop selling produce unless they are granted a controlling stake in the East African nation’s washing stations, said Joseph Ntirampeba, president of the farmers’ association. The country started selling its coffee-washing and purification plants to closely held companies in 2009, with Webcor Ltd., a Swiss company, buying 13 stations. Burundi in November said it plans to sell the remaining 133 stations. Farmers should hold a controlling stake in the plants as they have paid a tax of 60 Burundian francs ($0.04) per kilogram of coffee cherries since the 1980s to pay for the construction of the stations, Ntirampeba, who leads the National Federation of Coffee-Growing Associations of Burundi, known as CNAC, said by phone Dec. 9 from Bujumbura, the capital. “We are not ready to give our coffee freely when we are not really involved,” he said. “Coffee is our business, our efforts,...

Last year, in an interview with the Voice of America's Amharic Service, Ethiopia Commodity Exchange CEO Eleni Gabre-Madhin told the radio that farmers in Ethiopia do not pay any taxes. "As far as I know, farmers in Ethiopia do not pay taxes " said she. That is not true. According to applicable tax laws, individual farmers and agricultural producer cooperatives with a gross annual earning of as little as Birr 600 (USD35) are required to pay agricultural income tax. Additionally, farmers pay a fixed annual land use tax and variable sales taxes which are indirectly passed on to them by businesses. Below is excerpts from a study titled "Taxation in Ethiopia" published in January 2005 by Ethiopian Chamber of Commerce (ECC) and Ethiopian Business Development Services Network (EBDSN) on behalf of German Technical Cooperation (GTZ) and Partnership Project Rhein-Main Chamber, Germany and ECC (with SEQUA). --- Agricultural Income Tax According to P...

By Wondwossen Mezlekia  (Contact at: poorfarmer@gmail.com ) December 5, 2011 The Government of Ethiopia has recently issued yet another directive that is filled with ambiguity and disregard to proper implementation of trade policies that affect everyone in the logistics supply chain. The story was first broken by Sprudge last week in the article " An End to Lot Separation In Ethiopia? " The directive is difficult to comprehend in more ways than one. First, the letter uses "bulk container" and "loose container" interchangeably and without distinction. Technically, these terms represent two distinct means of cargo shipment and the directive could have serious implications depending on which term is intended to go into effect. "Bulk container" often refers to the movement of coffee in bulk, using normal dry containers fitted with a liner, whereas shipping coffee in a "loose container" (also known as, Loose Container Loa...

By   Forexpros  via Daily Markets December 5, 2011 Forexpros – Coffee futures advanced on Monday, as adverse weather conditions in top growers Brazil and Colombia underlined concerns over declining global coffee supplies. On the ICE Futures Exchange, Arabica coffee for March delivery traded at USD2.3105 a pound during U.S. morning trade, climbing 0.62%. It earlier rose by as much as 1.15% to trade at a daily high of USD2.3275 a pound. The National Federation of Coffee Growers of Colombia, or Fedecafe, said that the country’s coffee output was likely to be flat in the 2011-12 marketing season that began on October 1, as heavy rains damaged coffee plants. According to the group, Colombia’s coffee production in the current marketing year will total 8.5 million 60-kilogram bags, the same as in the previous season. Luis Genaro Munoz, general manager of Fedcafe said, “We don’t expect to increase production. The weather this year has been worse than last...

Coffee price rises not as harsh as expected, study finds The results of the 2011 September Quarter Gilkatho Cappuccino Price Index are in, and while there has been an average price hike of 15 cents per take away cup, this is better than what the market had predicted. Hospitality Magazine December 5, 2011 The Index showed an average price increase of 15 cents per cup for take away coffee and 17 cents per cup for dine-in during the past 12 months across Australia, and while Gilkatho managing director, Wayne Fowler admits that 63.1 per cent of the coffee shops surveyed had increased their prices in the past year, they were not as high as originally predicted. "2011 has delivered some of the price increases expected by record increases in coffee futures experienced at the start of 2011, but commercial pressures and the continued evolution of a more discerning cafe culture in Australia has kept the expected increases in the cost of take away and dine-in coff...