Ethiopia's coffees are special, but not their prices

By Seleshi Tessema and Addis Getachew

ADDIS ABABA, Ethiopia (AA) - As the world prepares to mark International Coffee Day on Oct. 1, Ethiopia, which prides itself on being the birthplace of the arabica bean, faces daunting challenges in guaranteeing a fair price for its poor farmers due to the local and global exploitative market system.

According to official figures, Ethiopia’s average annual coffee production stands at 260,000 metric tons, and some 15 million small farmers grow the plant on fragmented farmlands in eastern, southeastern and western parts of the country.

Dejene Hirpa, deputy general manager of the Oromia Coffee Farmers Cooperative Union, one of Ethiopia’s biggest unions, which represents nearly 600,000 farmers and was established to provide fair prices and technical support to farmers, told Anadolu Agency that some 40%-50% of coffee production goes to the domestic market while 50%-60% is exported to different parts of the world.

According to the Ethiopian Coffee and Tea Authority, in the 2020/21 fiscal year, Ethiopia -- which is Africa's top and the world's seventh-largest coffee producer earned $906 million through exports of 248,000 tons of coffee to the U.S., Germany, Japan and Saudi Arabia, as well as other countries.

- ‘Wretched class’

Hirpa noted that despite their contribution to the national economy, for centuries, the livelihoods of coffee farmers remained hand to mouth.

“Ethiopian farmers had been the wretched class of people due to an entrenched exploitative domestic and global market system,” he said.

Bereket Meseret, chief operating officer of the Ethiopian Commodity Exchange (ECX), agreed.

The ECX is an agricultural commodities exchange platform that was established in 2008 to provide a modern and just marketing system for all actors.

‘’For centuries, the Ethiopian local coffee market system had consisted of bean collectors, brokers, small and big buyers and exporters,” Meseret said. “At every point of the value chain, farmers lost the value of their product.”

Over the past 13 years, Meseret said the ECEX had managed to create “an efficient, orderly, transparent market system” with a reduced value chain where sellers meet buyers.

“However, despite the reform, the old extended value chain remains intact, and we have been trying to persuade the significant number of farmers who are still in the old system to get on board,” he noted.

For those farmers and all participants who are involved in the reformed market system, they provide timely global coffee market information and introduced instant electronic payment, he added.

According to Hirpa, coffee exports had been an exclusive province of a few established local and foreign companies, but now unions and farmers are in the export business.

“The involvement of the Oromia Coffee Farmers Cooperative Union and other unions in the export business had increased the profit margin farmers get,” he said.

According to Meseret, the ECX has introduced a marketing platform that will enable small coffee producers to directly sell their product to global buyers, and this will help small farmers get a fair price.

A coffee exporter who requested anonymity due to the sensitivity of the matter told Anadolu Agency that Ethiopia's coffee producers will focus more on modernization of the archaic farming system than on getting involved in the export market.

‘’The export business is progressively getting overcrowded, and the unions need to focus on improving the quality of the beans and the poor infrastructure of farming,” he added.

- Added value

According to Hirpa, in the global market, there are many companies that add value to a variety of Ethiopian coffees.

“Currently, we sell a kilogram of organic coffee for $11.11 per kilogram and the blended one-kilogram coffee is sold for $250 in North America and Europe, --and we are exploited,” he said. "Due to this, importers want only cheap green beans from us, not the value added coffee."

“This is a well-established closed section of the global market,” Meseret added. “It takes time, but will change.”

-Coffee vending

In Ethiopian cities and towns, one cannot go a full kilometer without coming upon young women sitting at a corner outdoors preparing coffee in a typical traditional ceremony.

It is becoming increasingly trendy for people to hang out for coffee outdoors, and a cup of coffee, mostly served black, costs between 5 and 10 Birr -- 0.11-0.21$ -- according to the fame and customer base of the vendor.

The coffee is boiled in a clay pot on a glowing mound of charcoal on a traditional furnace and coffee vending spots are frequented by people who want to socialize and get the latest on the talk of the town.

As such, most people in Ethiopia are coffee lovers. They pride themselves for being a people who introduced the stimulant to the world. The story goes that coffee beans were first discovered in Ethiopia by a goatherder. His name was Khalid. He saw one of his goats in a fluttery state after having tasted the beans of a particular plant, which was coffee (from Kaffa, where it originates in Ethiopia), and from then on, people got accustomed to what is locally known as “green gold” in Ethiopia.​​​​​​​