Fairtrade's impact on coffee's birthplace
- 25 July 2012
- From the section Business
Long regarded as Arabica coffee's birthplace, Ethiopia is trying to become a major player in the market, after decades of being largely ignored by the global coffee industry.
Ethiopia's variable agro-ecology means it is well placed to provide certified specialty blends that are increasingly sought by the world market, such as highland coffee, forest coffee, or even naturally decaffeinated coffee, according to Kassu Kebede.
Indeed, many indigenous coffee cooperatives have recently gained critical access to international coffee markets.
"The future is looking very bright for Ethiopian coffee," Mr Kebede, who worked for 27 years in the Ministry of Agriculture's coffee department, says.
In spite of this, however, many of the farmers here are still struggling to make enough money from picking the red cherry from which the coffee beans come.
"Ethiopian coffees are still too moderately priced for what they are worth," says coffee consultant Willem Boot, who has managed coffee development projects for national coffee organizations in Ethiopia, Panama and El Salvador.
"Their specialty coffees are significantly better than others and are really undersold."
Shackled by trade
Coffee is the world's second-most valuable exported legal commodity, after oil. Exports during 2010 alone were worth some $15.4bn, according to the International Coffee Organisation.
Coffee is also Ethiopia's primary export, which makes it its largest generator of foreign capital, totalling $840m (£540m) in 2010.
That might be a lot, but it is nevertheless not enough to help the struggling nation combat poverty.
"The main reason for poverty is trade," says Tadesse Meskala, general manager of Oromia Coffee Farmers Cooperative Union.
"It is not a lack of natural resources, but the formulation of trading mechanisms that makes us poorer and poorer."
Life or death
So in order to increase their share of the price consumers pay for their coffee, many coffee producers in Ethiopia have linked up with the Fairtrade programme.
Under Fairtrade International's certification system, green coffee beans are traded at $1.60 or more, in addition to a 20 cent social premium that rises to 30 cents for organic coffee.
This has resulted in increased earnings for many farmers, thus changing their lives, according to Beri Muketa, 26, a coffee farmer with Homa Primary Cooperative in Southern Ethiopia's Abaya district.
"We used to sleep on the floor," he says.
"Now we have beds."
Fairtrade has even enabled his co-operative to build a community clinic and a high school.
Such stories offer hope for Shibru Worera, 40, who is planning to join the local Kelaitu Hase Gola Cooperative.
Standing among his patch of dilapidated coffee trees, his clothes hanging off him in shreds, Mr Worera says he hopes to earn enough to feed his wife and six children. Four other children have already died.
"I hope to have a chance to improve," he says. "There are no other opportunities."
Reaching the buyers
The reason why co-operatives have been so beneficial for Abaya's many smallholding farmers is that they have helped them access previously unattainable international markets.
The co-operatives collect farmer's produce, process it, then transport it to Addis Ababa. From there it is trucked to Djibouti—Ethiopia lacks its own port—from where it is shipped around the world.
There are two types of Fairtrade buyer, according to Tsegaye Anebo, general manager of Sidama Coffee Farmers Co-operative Union.
One type of buyer, such as Starbucks, will only buy if the Fairtrade price is low enough.
The other consists of smaller roasting companies that buy whatever the price, thus absorbing cost fluctuations.
One such roasting company is Third Coast Coffee in Austin, Texas. The company is prepared to pay more than the Fairtrade minimum in recognition of the quality of coffee on offer, according to Clay Roper, one of its roasters.
But some critics say Fairtrade represents another form of charity that does little to help farmers become self-sufficient.
Coffee prices should be based on the quality and uniqueness of the coffee sold, rather than on an arbitrary external system, according to Adam Overton, an American who bought Ethiopian land in the south-western Bench Maji zone to start a coffee farm.
The expense of Fair Trade certification can limit the number of markets available that are willing to pay additional costs, says Abdullah Bagersh, a director for the Ethiopian Commodity Exchange, which regulates much of the coffee industry.
Also, he says, farmers must adhere to strict practises or are vulnerable to losing the market to which they have committed and become dependent on.
Others argue the system splits communities along the lines of farmers who qualify for Fairtrade premiums and those that do not.
A better way forward might be to improve the livelihoods of Ethiopia's coffee producers through a combination of internal change and international acceptance that genuine quality often isn't achieved through mass production, coffee consultant Mr Boot believes.
"If Ethiopia could do a better job selling its unique story, it could make significantly more money for farmers," he says.