Poor Farmer

Update ~ Since this write-up appeared on Ethiopian related websites early this week, I received many comments from readers with a spectrum of views. I appreciate those who took the time to write as well as those of you all who read my blog. Whenever possible, I try to reach out to readers especially with differing opinions as I respond to direct emails. The following comment is what I posted on Nazret Blog in response to multiple readers that commented with a specific question directed towards me: "What is your point?" I reposted my response here to validate the post that bears my name: Hi all, Thanks for taking the time to read and comment on the piece. Asking intelligent questions and listening to others with varying views is important and should be encouraged. That's why I'm compelled to respond to those of you who asked me to clarify my point. My points in this particular article are: 1. The change that ECX is going make to the way Specialty coffee is t...

"Many exporters are returning their licenses. We, the remaining ones, are in trouble too. The local price is higher than the international price. Ethiopia's share in the global market share is not more than 3 percent; we cannot influence the international market. The price that we quote is unacceptable to some customers. We are unable to go along with the market fluctuation. ... Previously, when the New York market fluctuated, our prices also fluctuated. But now, this is history. You are expected to buy on the basis of the daily high selling price." - Emebet Taffesse Kidanemariam, vice-president of the Ethiopian Women Exporters Association (EWEA) and the Ethiopian Coffee Exporters Association On the other hand: On October 03, 2009, the Ethiopian Grain Trade Enterprise (EGTE) said it plans to purchase 10,000 tons of coffee "for local and foreign markets during the current fiscal year." - Ethiopia News Agency, October 03, 2009 Guna Trading had already annou...

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 ...

By Jason McLure Bloomberg August 31, 2009 Coffee exports from Ethiopia, Africa’s largest producer of the beans, are expected to rebound to about 171,000 metric tons this year after shipments fell to their lowest level in six years last year, an official with the Ethiopian Commodity Exchange said. “Early assessments indicate a very good potential for a bumper harvest of coffee,” said Eleni Gabre-Madhin, chief executive officer of the Addis Ababa-based exchange, in an interview on Aug. 29. “We are expecting at least 2007/2008 tonnage.” Shipments fell from 170,888 tons in 2007/2008 to 133,993 last year after a drought cut production and Japanese importers largely stopped buying Ethiopian coffee after finding high levels of pesticide residues in shipments. Better rains this year in the main coffee-growing areas will lead to more production during the country’s October to December harvest. Ethiopian coffee trees will also produce more due to their cyclical nature, in which harves...

Eleni Gabre-Medhin: 'If we can distribute what we have, I think we are further along in reaching food security.' So far, I have been reluctant to conclude that ECX's coffee trade adventure was not only illogical but also off target. I am now tending to believing that what I had feared all along is actually happening: ECX is derailed off track. The IPS (Inter Press Service News Agency) interview with Dr. Eleni Gebre-Medhin (below) sheds light on some interesting aspects of ECX including the disconnect between its goals and vision and between ECX's metrics for measuring its performance and the publics' expectations. While reading the excerpts of the interview, the first problem that popped ou at me is that ECX's stated goals are not aligned to its vision (which is also different from the one on ECX's website). Just below is an outline of what I made out of the interview followed by a list of my questions: Objectives of ECX: "Grant smallholder fa...