page_title: Agriculture in Ethiopia
section_title: Coffee
hierarchical_section_title: Agriculture in Ethiopia / Agricultural Goals: 2011-2015 / Major cash crops / Coffee
caption_attribution_description: Coffee farmer Feleke Dukamo checks the latest coffee prices. The Ethiopia Commodity Exchange's new price information line already gets 40,000 calls a day from farmers like Feleke. Because he knows the price coffee is trading for in Addis Ababa, Ethiopia's capital, Feleke can drive a hard bargain with his buyers. The result? As Feleke says: "In the three years since the ECX was set up, the price I get for my coffee has increased nine-fold." DFID supported two leading research institutes who were tasked with finding a solution to Ethiopia's inefficient food and commodity markets. The UK aid funded research recommended setting up a commodity exchange and helped to design the warehousing, logistics and payment systems that the exchange uses today. The exchange helps to boost exports and secure a better deal for farmers and consumers. More information: www.dfid.gov.uk/ecx
context_page_description: Agriculture in Ethiopia is the foundation of the country's economy, accounting for half of gross domestic product, 83.9% of exports, and 80% of total employment.
  Ethiopia's agriculture is plagued by periodic drought, soil degradation caused by overgrazing, deforestation, high levels of taxation and poor infrastructure. Yet agriculture is the country's most promising resource. A potential exists for self-sufficiency in grains and for export development in livestock, grains, vegetables, and fruits. As many as 4.6 million people need food assistance annually.
  Agriculture accounts for 46.3 percent of the nation's Gross domestic Product, 83.9 percent of exports, and 80% of the labour force. Many other economic activities depend on agriculture, including marketing, processing, and export of agricultural products. Production is overwhelmingly of a subsistence nature, and a large part of commodity exports are provided by the small agricultural cash-crop sector. Principal crops include coffee, pulses, oilseeds, cereals, potatoes, sugarcane, and vegetables. Exports are almost entirely agricultural commodities, and coffee is the largest foreign exchange earner.
context_section_description: The most important cash crop in Ethiopia was coffee. During the 1970s, coffee exports accounted for 50-60% of the total value of all exports, although coffee's share dropped to 25% as a result of the economic dislocation following the 1974 revolution. By 1976 coffee exports had recovered, and in the five years ending in 1988/89, 44% of the coffee grown was exported, accounting for about 63% of the value of exports. Domestically, coffee contributed about 20% of the government's revenue. Approximately 25% of Ethiopia's population depended directly or indirectly on coffee for its livelihood.
  Ethiopia's coffee is almost exclusively of the arabica type, which grows best at altitudes between 1,000 and 2,000 meters. Coffee grows wild in many parts of the country, although most Ethiopian coffee is produced in the Oromia Region (63.7%) and in the SNNPR (34.4%), with lesser amounts in the Gambela Region and around the city of Dire Dawa. The amount of coffee inspected in the fiscal year 2007/2008 by the Ethiopian Coffee and Tea Authority (ECTA) was 230,247 tons, a decrease of almost 3% from the previous fiscal year's total of 236,714 tons.
  About 98 percent of the coffee was produced by peasants on smallholdings of less than a hectare, and the remaining 2 percent was produced by state farms. Some estimates indicated that yields on peasant farms were higher than those on state farms. In the 1980s, as part of an effort to increase production and to improve the cultivation and harvesting of coffee, the government created the Ministry of Coffee and Tea Development (now the ECTA), which was responsible for production and marketing. The ten-year plan called for an increase in the size of state farms producing coffee from 14,000-15,000 hectares to 50,000 hectares by 1994. However, beginning in 1987 the decline in world coffee prices, reduced Ethiopia's foreign-exchange earnings. In early 1989, for example, the price of one kilogram/US$0.58; of coffee was by June it had dropped to US$0.32. Mengistu told the 1989 WPE party congress that at US$0.32 per kilogram, foreign-exchange earnings from coffee would have dropped by 240 million Birr, and government revenue would have been reduced by 140 million Birr by the end of 1989.
caption: Coffee farmer Feleke Dukamo checks the latest coffee prices. The Ethiopia Commodity Exchange's new price information line already gets 40,000 calls a day from farmers like Feleke. Because he knows the price coffee is trading for in Addis Ababa, Ethiopia's capital, Feleke can drive a hard bargain with his buyers. (2011)
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