Until recently, a single producer lot from Ethiopia would have been unthinkable. But thanks to recent changes to government regulations, we’re now able to purchase coffee directly from the producers.
With his family’s help, Adam Banata cultivates coffee on his small 4-hectare farm in Nensebo, West Arsi. Adam’s farm sits at a staggering 2,000+ masl, on which he grows a range of varieties developed by the Jimma Agricultural Research Center (JARC). The JARC is responsible for developing many of the varieties that flourish across Ethiopia today.
Focusing on growing exceptional naturally processed coffees, Adam doesn’t use chemical pesticides or fertilizers, and is organic-by-default.
In addition to coffee, Adam also grows a variety of fruits and a local, carbohydrate-rich plant called enset (false banana). West Arsi may have recently risen to international acclaim as a superb coffee-producing region, but it’s been producing coffee as far back as anyone can remember. Previously, coffees produced in West Arsi were sold as Sidamo or Harrar. More recently, West Arsi was designated a unique coffee-growing origin by the Ethiopian Commodity Exchange. Since then, it’s gained fame through international quality competitions, including the Ethiopian Cup of Excellence where, in 2020, coffees from West Arsi placed in 4 of the top 10 spots.
Adam and his family selectively handpick ripe, red cherry and lay it to try on his farm’s 23 raised drying beds. He turns cherry every hour and covers it at midday and overnight, to prevent condensation. It takes approximately 16 days for cherry to dry. Once dry, Adam bags coffee and stores it in a warehouse on the farm for two and half months before transporting it to the dry mill to be hulled and prepared for export.
(Adam Banata and family)
Ethiopian Commodity Exchange:
No conversation about Ethiopian coffee would be complete without discussing the Ethiopian Commodity Exchange (ECX). The organization has been much maligned within the specialty coffee industry since its inception in 2008.
The foundation on which the ECX was built was laid out in a 2007 TED Talk by economist Eleni Gabre-Mahin (who, in 2008, would become the founding COE of the ECX in 2008). Her plan, she said, would create wealth, minimize risk for farmers and turn one of the world’s poorest countries into one of its fastest-growing economies.
In theory, this all sounded great – and should have been something that everyone in the coffee industry could support. However, coffee is an awkward fit within the larger commodity category – quality being the biggest differentiator of price, meaning buying and selling specialty coffee is more complex.
Before we talk about negatives associated with the ECX, it’s important to remember that it has, and continues to have, a positive impact on many coffee farmers’ lives. Prior to the establishment of the ECX many Ethiopian coffee producers had little to no access to sufficient credit, market information, and transportation (to move their coffee from the farm to warehouses in Adis Ababa) among many other vital resources. For many Ethiopian farmers, coffee producers included, the ECX came as a way forward after years of struggle and hardship.
Upon its founding, government regulations required all coffee sold within Ethiopia, to be sold through the ECX. In return, the ECX provided many advantages to small-hold producers throughout the country – easy access to accurate NYSE coffee prices, so producers can make informed decisions as to when they sell their crop. Next-day payment for coffee after it’s sold, because buyers are required to deposit finds into an ECX account prior to participating in any auctions. Centralized warehousing and access to national/international markets.
The biggest concern, from a specialty standpoint, of the established ECX system was traceability. Coffees sold though the ECX are grouped together in larger regional lots, making it impossible to trace specific coffees back to individual farmers, co-ops, or washing stations. In 2017, after pressure from the Specialty Coffee Association and Specialty Coffee buyers, the Ethiopian government relaxed the regulations allowing all Ethiopian coffee, including coffee sold through the ECX, to be marketed with full traceability. Farmers and Producer Groups are now able to negotiate directly with exporters and bypass the ECX platform. Exporters can now establish their own warehouses, consequently giving them more control over the sampling, scoring, and overall quality of the coffees they bring in. This enables a dialogue with the producer and increases traceability.
The 2017 “vertical integration” loophole is certainly a good thing for the specialty coffee sector, but it’s important to remember that specialty coffee is a very small sector within the larger coffee industry, and the ECX continues to be a net positive for many farmers.