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Erratic weather, supply, prices and poor farming affecting coffee yield

Tuesday October 23 2018
kahaware

A farmer tending to coffee berries. Erratic weather, supply, prices and poor farming is affecting East Africa's coffee yield. PHOTO FILE | NATION

By Allan Olingo

East Africa's coffee producers have been advised to capitalise on the growing interest in the premium markets to make the most of their produce.

A new report by the United Nations Conference on Trade and Development (UNCTAD) on East Africa’s coffee sector, says that even as the region coffee market continues to grow, Ethiopia — the ancestral home of desirable arabica varieties — and Burundi, where coffee has been the mainstay of the economy, should take advantage of high-value niche markets and ensure the sustainability of supply.

But the report warns that the strong involvement of international companies in coffee buying may also contribute to producer price volatility, “given that these companies which may not necessarily coincide with those of producers or the governments in the countries where they operate.”

Olam and Sucafina are international coffee exporting firms that operate in all the coffee producing countries, playing a vital role in determining the coffee auction prices from East Africa too.

The report found Burundi’s production volatile, thanks to unpredictable weather cycles, ageing trees — often more than 40 years old — soil degradation, the absence of good farming practices and, to some extent, political instability.

Together with tea, coffee exports account for 90 per cent of Burundi’s foreign exchange earnings.

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Pamela Coke-Hamilton, director of the international trade and commodities division of UNCTAD, said that private investment, including public-private partnerships, should be encouraged to modernise the sub-sector and make it more competitive.

“In this regard, Burundi should invest in market intelligence that helps stakeholders to understand better the factors associated with the growing demand in importing niche markets and build on the country’s reputation as a prized source of specialty coffees,” Ms Coke-Hamilton said.

She further said that because Burundi has proved it can produce excellent coffee that consumers want, there is every incentive to strengthen the hand of smallholder farmers through more organised co-operatives.

The report examines the state of coffee production and trade in East Africa, using the examples of Ethiopia and Burundi.

It also analyses the importance of coffee in these economies regarding export earnings, farmers’ incomes and employment generation.

It also highlights the challenges of the coffee sector and suggests some potential answers, particularly regarding allowing producer countries to capture a greater share of this commodity’s value.

Ethiopia’s problem remains the inconsistent quality of the coffee, with the prevalence of pests and diseases, climatic variability, poor agricultural practices, insufficient training of producers, and weaknesses in the organisation and management of the value chain, the report said.

However, opportunities to improve the sector, particularly in the way growers are rewarded, also remain, the report points out.

“Ethiopia has a natural abundance of coffee varieties, enabling it to benefit from market and product differentiation. Indeed, the country has a significant comparative advantage in the production of organic coffee with over 90 per cent being de facto organic,” Ms Coke-Hamilton said.

More than 120 million people in the world rely on the coffee industry, including 25 million smallholders and coffee workers — half of whom live in Africa.

However, as with most primary commodities, coffee remains characterised by an extended value chain which is only partially visible in producing countries — most of the value is captured by industrial roasters and distributors in consuming countries, namely developed countries, according to the report.

“In many coffee producing countries, particularly in Africa, the structural imbalance of the coffee value chain contributes to exacerbating rural poverty and its associated problems of food insecurity, low level of education, child labour, and rural-to-urban migration.

“This report is timely because coffee production is also threatened by climate change, which could severely reduce the land available for growing coffee,” Ms Coke-Hamilton said.

Other threats to the sustainability of coffee production in East Africa include the declining quality and productivity of the cultivars, increasing production costs, and a lack of interest from younger smallholders who have observed how generations before them have struggled to make a decent living from coffee farming.

Already Kenya, Uganda and Tanzania, some of the region’s top largest producers have recorded a reduction in earnings and also acreage of coffee farming as farmers explore other avenues outside of the crop.

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