Ethiopia: Slamming the door on specialty coffee buyers

By Michaele Weissman

In late 2007 and early 2008 as I was writing “God in a Cup,” the Ethiopian coffee industry experienced what amounted to a market collapse. Vast amounts of coffee that had been purchased by buyers in the US, Europe and Asia were never shipped out of Ethiopia or were shipped many months late after the beans had lost much of their lovely fragrance, taste and freshness. These events are dramatically described in my book.

In 2008 sellers and buyers scrambled to put the broken market back together.

Now the Ethiopian government is in effect re-nationalizing its coffee industry–coffee is Ethiopia’s most important export. The re-nationalization appears to be slamming the door on specialty buyers who in recent years have roamed Ethiopia in search of small lots of super high quality coffee from small Ethiopian farms and cooperatives for which they have paid $3 a pound and up.

Under the new system private sellers are banned. These “privates” have had their licenses to operate taken from them. They are no longer legally allowed to buy, process and market small lots of super expensive coffee.

Instead, the government has created a controlled commodities market on which virtually all Ethiopian coffee will be sold. (Some large, government-friendly cooperatives will apparently continue to have some autonomy.) Under the new rules, coffees from 24 different geographic areas will be aggregated, cupped and graded together. All coffees from, say, Yirgacheffe Area A, Yirgacheffe Area B, Harar and so forth will be slotted into one of nine different quality grades and sold together. Which means that the farmers working in particular cooperatives will no longer be able to increase their earnings by adopting improved agricultural practices and growing better coffee.

This notion–that farmers who work harder and produce better coffee ought to be paid more is the core notion of the specialty coffee industry. Everything else that specialty buyers and roasters are attempting to accomplish flows from this basic premise.

Instead of super high prices for a small number of coffee farmers, the Ethiopian government has decided to focus on gaining higher prices for all its coffee. A similar strategy was adopted some years ago by the Colombians: coffee buyers tell me this strategy resulted in the lowering of standards at the very top of Colombian coffee quality pyramid, but it has significantly raised the price of the mass of Colombian coffee. Since Ethiopia has something like one million coffee farmers, this strategy makes a certain sense. But it it fails to address the most fundamental issue besetting Ethiopian coffee farmers: low productivity. When coffee is aggregated and sold in mass lots, it is hard to identify factors that will motivate farmers and cooperatives to improve agricultural practices –thereby increasing productivity. Perhaps this will come.