Viewpoints | Sep 06,2020
Over half a dozen of the largest coffee industry lobby groups have agreed to forge an alliance to gain bargaining power and deal with hurdles holding coffee farming from showing improvement in yield.
Ethiopia produced 248,000tn coffee last year, shipped out mainly to the United States, Europe and the Middle East.
Seven associations and cooperative unions signed an agreement at the Coffee & Tea Authority headquarters, on Ras Mekonnen Avenue (near Mexico Square), on September 22, 2021. These include the Ethiopian Women in Coffee, the Ethiopian Coffee Roasters Association, the Ethiopian Coffee Growers, Producers & Exporters Association, the Ethiopian Coffee Exporters Association, and the coffee farmers cooperative unions of Oromia, Southern and Sidama regional states. They pledged to strengthen ties and form a single lobby group.
Industry players believe the move will enable them to address major bottlenecks in the coffee sector, including the dispute over the implementation of vertical integration, a system directly connecting suppliers with farmers without the involvement of the Ethiopian Commodity Exchange (ECX).
Seven board members from each association or cooperative will be chosen to attend the alliance's first general assembly scheduled for a little over a month. The newly created lobby group hopes to be represented at the Ethiopian Chamber of Commerce & Sectoral Associations.
According to Hussein Ambo (PhD), head of the Coffee Growers, Producers & Exporters Association, the alliance has been in the works for close to four years, which has 150 members.
The reluctance of some of their members and the pandemic has been the cause of the delays. Individuals, private limited companies, associations, and cooperatives involved in the coffee industry are eligible for membership in the alliance, which will be known as the Ethiopian Coffee Association.
Desalegn Jena presides over the Coffee Exporters Association, founded a decade ago and represents over 300 members. He sees the move as a step in the right direction in reversing the scattered and fragmented lobby groups unable to advance the industry's interests for policy changes.
"The alliance will be in a better position to help boost production and revenues," said Desalegn.
Officials at the Coffee & Tea Authority, who would like to see export revenues hit a historical high of over a billion dollars, are also upbeat about the development.
Mohammed Shemsu, head of the Office for the Director of the Authority, believes the alliance would gain bargaining power for businesses involved in the coffee sector.
Coffee remains Ethiopia's top export item, generating over 900 million dollars in revenues last year.
"They can work on recurring issues in the coffee sector, which would also make our job easier to understand the reality on the ground," said Mohammed.
However, not everybody is thrilled about the emergence of an umbrella organization for the coffee sector.
An exporter who has been working in the coffee sector for 15 years and has served on the board of Ethiopian Women in Coffee, the alliance is more likely to complicate things than address them.
One of the 43 members in the association, she contends the difficulty of gaining a consensus among the members of one of the existing lobby groups. There is a fear that the alliance would be overshadowed by exporters, who control much of the resources in the industry. It would be better if lobby groups were formed based on roles in the industry, according to this exporter, who requested to remain anonymous for fear of reprisal.
Anwar Ahmed, a commodity expert, shares some of her fears about the influence of coffee exporters in the value chain. However, he believes an alliance will pay off, allowing industry players the power to influence policy changes.
PUBLISHED ON Sep 26,2021 [ VOL 22 , NO 1117]
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