Poor Farmer

Wondwossen's Note:  In 2011, there was a failed attempt in Ethiopia to ship all coffees in bulk. Click   here   to read exactly what happened back then.   ---- Reese Ewing Reuters December 20, 2015 SANTOS, BRAZIL   – The humble jute bag, long the distinctive packing for Brazil's coffee exports, is rapidly being edged out as traders and cooperatives face rising wage bills and borrowing costs, weak global prices and a deepening economic crisis at home. By introducing massive plastic sacks to replace the 60-kg (132-lb) jute bags that have dominated coffee shipments for more than two centuries, firms are saving millions of dollars a year, in a move so successful it is expected to reshape the global industry. Until a few years ago, the world's biggest coffee producer dispatched nearly all its exports in jute bags. Next year will see Brazil export more than half its green coffee in 1-tonne polypropylene 'super sacks' or 21.6-tonne polyethylen...

By Tarikua Getachew Addis Standard November 6, 2015 Ethiopian coffee, long representing close to 30% of the country's foreign exchange earnings, is suffering from neglect by a government that prides itself with achieving more than 10% GDP annual growth. Fifteen million Ethiopians, 20% of the population, depend on coffee production and coffee-related activities, and coffee is cultivated by close to 3.8 million smallholder farming households. But to understand the state of Ethiopian coffee today one will have to imagine Switzerland without its banks and its watch makers. Production of the green Arabica bean in the country is almost exclusively situated in the two regions of Oromia and the Southern Nations, Nationalities and Peoples (SNNPR). Figures also show that the country is the leading producer in Africa of this variety and in 2014 was the seventh largest supplier of green beans in the world. In 2014, Ethiopia earned almost US$889 million in export of raw coffee...

Small farmers in Africa need to produce more. Happily that is easier than it sounds “ There are several reasons for the stagnation in African agricultural productivity but poor policies have played a large role. In many countries state-owned monopolies for the main export crops were established either before independence or soon after. The prices paid to farmers were generally squeezed to create profits that were meant to be invested in other, sexier, industries. Such policies failed to spark an industrial revolution but succeeded in making farmers poorer. ” – The Economist The Economist (From the Sept 19, 2015 print edition) September 17, 2015 ON A hillside about an hour’s drive north of Nairobi, Kenya’s capital, is a visible demonstration of the difference between the miserable reality of smallholder farming in Africa and what it could be. On one side of the steep terraces stand verdant bushes, their stems heavy with plump coffee beans. A few feet away are sickly o...

By William Clarke Agrimoney September 9, 2015 Coffee consumption has the potential to boom in sub-Saharan Africa, triggering a revival in the stagnated local coffee industry, according to Ecobank. With sub-Saharan coffee consumption well behind other developing markets, even in Ethiopia where arabica originated, Ecobank sees the lack of a domestic market as a major problem for the industry. But the Togo-headquartered bank said that sub-Saharan coffee consumption was set to soar, as local chains proliferate and coffee giant Starbucks prepares to enter the region, offering an opportunities to "revitalise" the industry. High quality Sub-Saharan Africa produces around 12% of world coffee output, with Ethiopia, Uganda and the Ivory Coast accounting for three quarters of that production. And Ecobank noted that the region is notable for producing some very high quality beans, including high-value arabicas from Ethiopia and Kenya. But Ecobank saw a n...

ECX splits into two By Dawit Taye The Reporter Ethiopia September 05, 2015 The Ethiopia Commodity Exchange (ECX), the first organized exchange in Ethiopia, is set to split into two giving rise to another state-owned enterprise called the Ethiopian Agricultural Commodities Warehousing Service Enterprises (EACWSE) which will be in business of providing an innovative warehousing services to ECX and other customers in the market. The company will be the latest to be incorporated as SoE under the supervision of the Privatization Public Enterprises Supervisory Agency (PPESA) which is established with an authorized capital of one billion birr and paid up capital of 250 million birr.  Ermias Eshetu, CEO of ECX, told journalists at a press conference on Thursday that the international experience dictates that the two services be separated from one another to facilitate the activities of the trading institutions. And from the context of the local market, the warehousi...

Wondwossen’s Note :  You may also want to read this commentary that was published on July 6, 2012 for an in depth analysis of the problem and its root causes. That commentary attempts to show that the challenges that are cited in the article below are merely the symptoms, not the root causes of the problem. ------- Ministry reports lower coffee export performance in GTP I Addis Fortune August 10, 2015 The Ministry of Trade (MoT) has reported coffee exports of the country to be 939,325tn from the total planned 1.4 million tonnes in the five years of the first GTP. This generated a four billion dollar income for the country while the plan was 5.2 billion dollars. In the first year of the GTP, 2009/10, the plan was to export 302,264tn of coffee which decreased to 288,857tn in the following year. Planned exports continued to fall up to 2014/15. Among the 55 export destinations of the country’s coffee, Germany took the lead with 254,977tn in GTP I, generating...

Coffee disconnect is brewing Demand for specialty brands has roasters leaving futures exchanges By Julie Wernaw The Wall Street Journal August 6, 2015 A worker separates coffee cherries in Brazil. Specialty-coffee buyers  are turning to unusual pricing plans, using alternative benchmarks,  even directly investing in producer farms.   PHOTO:   PATRICIA MONTEIRO/BLOOMBERG NEWS Consumer demand for better-tasting coffee is splitting the coffee market in two. A growing number of coffee roasters that deal in small farm-produced and best-flavored coffees are leaving the traditional, and more volatile, futures market, which they say has become so disconnected from their business models that it is no longer useful to manage risk. The rise in demand for specialty coffee, now one of every two cups in America, has upended the coffee market as producers are choosing to invest directly with farmers and take the investment risk alone rather th...

Two ministries oversee production and trade in coffee and tea, but this is unsatisfactory By Snetsehay Assefa Addis Fortune July 6, 2015 The Ministry of Agriculture (MoA) is collecting comments on a draft regulation to re-establish an authority for coffee and tea development years after a similar body was discarded as irrelevant. The new body, to be called Coffee & Tea Development & Trade Authority, will not be any different from the now defunct Coffee & Tea Authority, which was abandoned by the government seven years ago, said Fikru Amene, coffee development director at MoA. The Authority was abandoned with the introduction of the Ethiopian Commodity Exchange. The re-establishment of the Authority came at the request of the Prime Minister at the end of April, 2015. Subsequent to the request, the Ministry finalised the draft regulation based on an assessment of the sector, which was carried out with the collaboration of the Ministry of Trade (MoT) an...