Tag: coffee

Ethiopia’s Commodity Exchange: Brewing a win-win solution

Digital screens light up Ethiopia’s small towns, from Assela and Humera to Jima, displaying the real-time prices at the country’s central agriculture market, the Ethiopian Commodity Exchange (ECX). The ECX acts as an organised marketplace where buyers and sellers come together to trade, assured of quality, quantity, payment, and delivery.

Mohamed Abafogi, a farmer from the Jima area of Oromia state, lives more than 300km from the central market in Addis Ababa. Despite the distance, ECX provides Abafogi with the most up-to-date market information and prices, allowing him to sell his coffee beans at the nearby ECX delivery centre at a competitive price with prompt payment. Buyers collect beans directly from farmers like Abafogi at regional centres and transport them by truck to the nearest port, in Djibouti, for export.

“Today I am earning a far better income than before. I am selling my coffee to the people of ECX at a fair price. These days my children do not go to school with empty stomachs,” he said. Last year he was able to replace his straw roof with one of corrugated iron. “I am better off today,” said Abafogi.

ECX assures delivery to buyers and due payment to farmers. Seven years ago, a buyer who paid in counterfeit cheques cheated dozens of Abafogi’s neighbours. Dealers were able to dictate prices to farmers, as there was no competition.

Ethipian traders work  on the floor of the Ethiopian Commodity Exchange in Addis Ababa. (Pic: AFP)
Traders shop for deals at the Ethiopian Commodity Exchange in Addis Ababa. (Pic: AFP)

Samuel Mochona, ECX’s communications manager, said the market had opened up trade since its establishment in 2008 by the Ethiopian government. In addition to coffee, sesame seeds, mung beans, maize, wheat and peas are also traded.

“Before ECX was established, agricultural markets in Ethiopia had been characterised by high costs and high transaction risks. With only one third of output reaching the market, commodity buyers and sellers tended to trade only with those they knew,” he said. “This helped them to avoid cheating sellers and defaulting buyers.

Through ECX, buyers are assured of a quality product, with tests conducted of both raw and roasted coffee samples, while farmers are assured of payment. ECX also gives technical support to farmers, who must meet global quality standards for their coffee to be accepted,” added Mochona.

Thirty-three farmers’ co-operatives, representing 2.6 million coffee farmers, share 15 market seats in the ECX. This gives them permanent and transferable rights to trade on the exchange.

“I can confidently say that trends in this country vividly show that ECX is successful not only in increasing the income of the poor farmers from coffee sell, but contributes to general economic development,” said Abenet Bekele, ECX chief strategy officer. “At present, however, no calculations have been made of the net benefit to farmers.”

Coffee production
Around one fifth of Ethiopia’s population depends directly or indirectly on coffee production and trade. Coffee earned almost 25% of total foreign exchange in the country in 2012/3 and accounts for 2% of GDP, according to the Ethiopian Commodity Exchange Agency, the government body overseeing ECX.

“I don’t have words to explain the stark contrast in lifestyle in my family and my neighbourhood before and after the coming of ECX. Previously, I could only afford to send one of my three boys to school as the remaining two had to work. But now all are in school,” said Abafogi. He now plans to establish a flourmill, which will be run by his wife.

“Improvements in agriculture, like ECX, can make an enormous difference in the lives of smallholder farmers,” said Dr Sipho Moyo, Africa Director of ONE.org. She further explains that providing resources like these can boost farmer incomes and break the cycle of poverty and that investing in agriculture now could help lift tens of millions of people out of poverty by 2024.

In January, ONE.org formally launched the Do Agric, It Pays campaign, based on its report, Ripe for Change: The Promise of Africa’s Agricultural Transformation, which calls on African governments to implement an enhanced CAADP (Comprehensive Africa Agriculture Development Programme) framework.

The enhanced CAADP policies were developed after a lengthy consultation process with African farmers and farmers associations from all over the continent. The package of policy recommendations include eliminating the gender gap in agriculture, developing the value chain to benefit small holder farmers, and making time-bound commitments to spending at least 10% of national budgets on agriculture investments, amongst others.

Taddese Meskela, head of the Oromia Coffee Farmers’ Co-operative, says ECX plays a pivotal role in ensuring fair prices for farmers and supplying quality coffee to global markets.

“Our members’ income is continuously growing as they are getting due prices for their produce,” he said.

Girmaye Kebede for ONE.org.

Zimbabwe’s coffee farmers struggle amid global boom and political gloom

A misty dawn has not yet given way to daylight in Zimbabwe’s eastern highlands. Lenard Moyo, a coffee farmer near Chipinge town, is prising red arabica beans out of their trees and putting them in his bag – as he does every morning during harvest season. “It’s hard when it’s so cold outside, but we have to pick them early,” he said.

A woman harvests ripe coffee berries. [Pic: Reuters]
A woman harvests ripe coffee berries. [Pic: Reuters]
Zimbabwe’s coffee belt has the perfect growing conditions for the beans: high mountain peaks and cool climates, and the country used to be famous for its “super-high-quality” product, slowly sun-dried, and tasting smooth and fruity. In the 1990s it produced some of the best coffee in the world, alongside South America and Kenya, generating crucial foreign currency and a livelihood for many labourers and small-scale farmers, as well as the big commercial farms.

But today the industry is in decline: many of the mills have been abandoned, farmers are in debt, and Zimbabwe produces just 60 “bags” of coffee beans a year compared with 250 bags in 1988 – with one bag amounting to 60 tonnes of coffee.

Earlier this year the European Union announced €10m (R132-million) in aid to Zimbabwe’s medium and small-scale farmers, in an attempt to revive the industry. But there’s a catch. “Coffee is an important crop and we’ll consider funding requests from small farmers provided the land involved is not in dispute,” Aldo Dell’Ariccia, head of the EU delegation to Zimbabwe, told the CAJ news agency.

Moyo said this caveat disqualified the majority of farmers. “Most of our small coffee plots are on land being contested in court by former white farmers. We’ll simply not qualify,” he said.

The disputes began in 2000, when young militants loyal to the president, Robert Mugabe, stormed white-owned farms to reclaim the land. At the time, Moyo was what was known as an “out-grower” – a black farmer owning a small plot of land next to a large commercial farm, relying on his neighbours for finance, expertise and machinery.

Production plummets
“First, [the militants] pruned down our coffee beans and burned hectares of trees in a week of rage. Coffee drying pens were turned into nurseries for marijuana and wild vegetables,” he said. “The new farm owners wanted instant profit but a coffee tree once planted takes three to five years to mature.”

Production plummeted as the new landowners could not secure bank loans to buy fertilisers or repair ageing infrastructure. Many were new to the business, and lacked the expertise to keep quality high.

In turn, international buyers began to shun Zimbabwean coffee, and in 2010 the Mutare Coffee Mill, considered one of the best in Africa, was forced to shut down. It required at least 4 000 tonnes of coffee to operate profitably but was receiving just 300.

And while Zimbabwean coffee growers struggle, elsewhere the industry is booming. Ten years ago the average cost of a tonne of coffee was $1 400, now it can fetch up to $4,000 (R39 400), according to the International Coffee Organisation.

“Zimbabwe is losing billions of dollars annually as the price of coffee has increased to about $3 per pound, up from $1 per pound in the 90s,” Gifford Trevor, president of Zimbabwe’s Coffee Growers Association, told News24.

Most of the country’s coffee farmers lack cash reserves to support themselves when the crop fails or yields are low, according to World Vision. The charity is training farmers and offering much-needed supplies such as fertilisers, irrigation systems and pesticides. But the farmers are still unable to compete with better organised growers in countries such as Rwanda, Kenya and Malawi.

Suppliers at a disadvantage
The global coffee industry is also stacked against suppliers, with the bulk of the profit going to those further up the chain.

In August, on a sponsored trip to Johannesburg, 39-year-old Moyo tasted his first cappuccino. “I thought it was bitter lemon,” he said. He was particularly horrified to pay $3 for one cup, compared with the $5.30 he receives for a bag of raw coffee beans.

Peter Multz, a former consultant for the Dutch charity SNV, which works with Zimbabwean farmers to improve their business skills, said most of the profit went to shippers, roasters and retailers. He said Zimbabwean farmers also faced particular problems.

“Sometimes the coffee is delayed at border crossings for up to a week, and without proper facilities the beans go bad. Sometimes buyers have to pay a bribe to let their coffee shipments go through,” he said.

With a more stable economy and western governments starting to release aid, Zimbabwean farmers hope that the country’s coffee industry will recover. But for Moyo times are still hard: “I can’t even pay my farm workers and coffee pickers properly,” he said. “Sometimes we reward them with milk, soya meals, and clothes after every harvest. As we say here, cash is a crunch.”

Ray Mhondera for the Guardian Africa Network. Mhondera is editor of The Africa Scientist Magazine.

Ethiopia’s love affair with coffee

Addis Ababa may be the heart of Ethiopia, but coffee is its lifeline. The coffee-drinking ceremony is a daily ritual on the streets and in homes, and it trumps instant granules and pods by far.

Elleni Kassaye (26) runs a small coffee shop in the Haya Hulet district, located on the eastern part of the sprawling capital. She wears her Ethiopian heritage with grace, translating it into her establishment and its array of beverages and foods. Elleni’s specialty is jebena buna, a coffee prepared in a clay pot, with a wide round bottom that leads up to a long, narrow spout with a handle. Like the mothers and grandmothers of many generations before her, she is wearing a traditional white dress with a colourful woven border.

I watch Elleni as she slowly stirs a pan of beans over a flame while aromas of frankincense float across the room, which has grass spread on it to add to a relaxed ambience. She waits patiently for the beans to change to a darker colour. The café is packed with people both young and old, chatting, laughing, gossiping, and discussing news. Ellen continues stirring and shaking the pan back and forth so that the beans don’t burn. As they start to pop, she removes them from the heat and passes them around for the customers to inhale the aroma.

Elleni preparing coffee for her customers. (Pic: Arefaynie Fantahun)
Elleni preparing coffee for her customers. (Pic: Arefaynie Fantahun)

While still warm, she grinds the beans into a powder with a mortar and pestle and places them in the jebena (clay pot) that contains boiled water. The pot sits over the fire for a while, before Elleni starts pouring it from high up into small cups. Pouring a thin stream of coffee into each little cup without spilling requires skill and experience, and Elleni does it gracefully. She serves the small cups to us with sugar and popcorn on the side to complement the coffee.

While jebena buna is most often enjoyed black, some have it with sugar to tone down the bitter taste. Though most of Elleni’s customers often drink the first brew and leave, the coffee-drinking ceremony in Ethiopia consists of three rounds. The first cup, called abol, happens to be the strongest one. The second brew, called tona, is slightly less strong, and the third, baraka, which means “blessing”, is mildest in flavour.

Time, patience and skill are required to make jebena coffee. (Pic: Arefaynie Fantahun)
Time, patience and skill are required to make the three brews. (Pic: Arefaynie Fantahun)

Ethiopia is often described by historians as the birthplace of coffee. According to legend, inhabitants of the Kaffa province were the first to discover the value of coffee as a stimulating beverage. Coffee shops are booming and have become a major fixture in Addis Ababa’s urban landscape. Sisay Alemayehu, a barista at Mankira Café in Piassa, says that people are increasingly opting for jebena coffee because of their superior flavour and the opportunity to watch the cycle of coffee preparation.

Today, more than 60% of Ethiopia’s foreign exchange income derives from coffee exports and an estimated 15 million Ethiopians depend on the livelihood from the production, processing, trade, and transport of coffee. Ethiopians drink about half of all the coffee they produce, preparing and serving it in elaborate rituals that are as popular as ever.

With the introduction of the espresso machines during the Italian occupation of the late 1930s, new methods were adopted. The macchiato, locally spelled ‘makyato’, a creamy, delicate balance of coffee and milk, and spris, a layered mix of coffee and tea became very popular, if not more popular than jebena coffee. Ethiopians also acquired the habit of drinking coffee with sugar around this time. Before this, coffee was served with salt, cardamom or butter.

Addis’s jebena coffee shops boast old-fashioned goodness, but there are plenty of contemporary cafés around to cater for different tastes. “Let’s go get coffee” is a line that never gets old around here; it’s a routine that we look forward to daily. If there’s one thing I’m sure of, it’s this: the city is unlikely to end its love affair with coffee anytime soon.

From the countless number of coffee shops around, these are my favourites:

Tomoca, the city’s most famous café, started roasting beans in 1953. It’s located off Churchill Road, Addis’s main shopping district. Some say it is touristy and expensive, but the coffee is as good as you will find anywhere.

Mokarar, located on Semien Hotel Road, is famous for its unique style of coffee and down-to-earth vibe.

Café Choche is in the century-old railway station, La Gare. This coffee shop is making a name for itself with the quality of its beans. Expect to pay10 birr ($0.54) for a cup.

The 20-year-old Robera Coffee Gallery is located in the Gerji area near the Mexican embassy. It’s a cosy place to hang out with friends. The beans are roasted daily in the big roaster out front, filling the air with irresistible aromas. A cup of good, earthy coffee costs $0.42.

Arefaynie Fantahun is a blogger based in Addis Ababa. Follow his posts on fashion, art, travel and photography here