Coffee Production and Marketing in Ethiopia

Alemayehu Asfaw Amamo


The general motive to write this current topic paper on Coffee production and marketing in Ethiopia is that Ethiopia is the birth place of coffee and it discovered earlier in the world. More than 1,000 years ago, coffee was a goatherd in Ethiopia southwestern highlands, David Beatty discovered the Ethiopian province where they first blossom Kaffa gave its name to coffee. Nobody is sure, exactly how coffee originally discovered as a beverage plant; it believed that its cultivation and use began as early as the 9th century in Ethiopia. It cultivated Yemen earlier, around AD 575. While, it originated in Ethiopia, from where it traveled to the Yemen about 600 years ago, and from Arabia began its journey around the world. Among the many legends, Kaldi, an Abyssinian goatherd, who lived around AD 850 found the origin of coffee. It is vital to the cultural and socio-economic life of Ethiopians and contributes 25%-30% of the country's foreign exchange, half of GDP, 90% of exports, 85% of total employments in the country and part  of  the  culture;  about  50  %  of  the  produced  coffee  is consumed  domestically. The general objective of the review is to understand coffee production and marketing value chain system in Ethiopia and specific objective is to revise coffee production and marketing value chain, volume of production, domestic and international marketing and consumption level. Its production accounts forest coffee 10%, Semi forest coffee 30%, Garden coffee 50 % and Plantation coffees accounts 10%. Factors causing low productivities are increasingly competing Khat, traditional agronomic practices, and shortage of specialized institution that provides extension support for coffee production. Low quality coffee supplied to the local market. While, price of coffee in the local market is usually higher than export prices and it has seasonal and auction market, and has poor fair trade system, price Volatility which affects those who depend on it for their livelihood. Its transaction primary, Ethiopian commodity exchange and international markets and its value chain include small-scale, private owned farm and state firms. Coffee processing activities in its value chain except loading and unloading, mostly performed by women groups of farmers. Its processing adds value and price of it in the chain. Were as its value chain actors are collector, local traders, primary cooperatives, coop. unions, exporters, importers, domestic wholesalers and retailers, service providers and consumers. Its supply chain is complex and small farmer’s sale to local traders, local trader’s sale to big coffee milers and exporters, after processing local trader sale to international exporters and primary cooperatives purchase a number of coffees and sale to cooperative union the union process it and sale to exporters on behalf of cooperatives. Ethiopian coffee mainly exported to 53 destination countries in the world its source 95 % from privet companies and 5 % is coffee growing farmer cooperative union.  Certification and verification schemes can be powerful tools for value addition, access to a fast-growing market segment and the dissemination of good agricultural, environmental and social practice. The evaluation for sustainable production of coffee has four categories: Product quality, economic accountability, social responsibility, and environmental leadership in the supply chain. The approaches are Common denominator, Industry structure and social equity, Cost vs. benefits, Multiplicity of certification bodies, Supply and demand balance. It concluded that, coffee production, processing, marketing value chain needs its area based production, quality, pre and post-harvest management practices, and gender sensitive which is women participation and to benefit them, and link the value chain actors in chain is very important.

Keywords: value chain, coffee value chain, supply chain market chain, value addition, fire price, producer benefit.

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