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Forest coffee value chain

The problem

Coffee is the dominant crop in Buno Bedele Zone, Oromia and the forest coffee systems of Ethiopia are generally assumed to host the largest genetic diversity of wild coffee in the world.

Coffee provides an income for around 15 million households in Ethiopia and can provide an economic incentive for improved forest management, as coffee plants thrive under the shade of trees.

Nevertheless, there are many problems associated with the forest coffee value chain. Poor quality standards within production systems, lack of traceability and capital, and weaknesses within the supply chain mean that prices received by farmers remain low. This fragmented value chain consists of several intermediaries, which add little value and reduce the net profit for farmers, who face increased transportation costs.

There is also a lack of knowledge around business practices such as effective production, post-harvest and quality handling, plus a lack of support in dealing with market contractors, developing export market linkages and accessing market information. Furthermore, incentives for producers to invest in forest coffee production are few, leading to the clearance of forests for expansion of agricultural land to produce other crops.

However, an established demand for Ethiopian coffee from both domestic and export markets ensures the forest coffee value chain offers a large potential to boost incomes and protect the environment.

What are we doing?

This project supports the commercialization of forest coffee by supporting seven coffee producing Participatory Forest Management Cooperatives (PFMCs) to boost the productivity of old forest coffee trees, improve the quality of coffee produced and develop links with better markets.

Farm Africa is working with PFMCs to:

  • Improve production and post-harvest handling practices to achieve consistency in the quality and supply of forest coffee.
  • Diversify market linkages by linking cooperatives directly with national and international buyers through their unions.
  • Protect and manage the existing forest, and reduce deforestation and associated greenhouse gas emissions.
  • Increase the organizational and management capacity of cooperatives, helping them to establish their own facilities. Cooperatives will then be better placed to directly control coffee quality and negotiate a higher value with buyers and therefore increase coffee farmers’ incomes.
  • Improve documentation and disseminate lessons learnt. Farm Africa will draw on lessons learnt from previous forest coffee value chain development projects implemented in Kellem Wollega and Illubabor zones, as well as evidence from the sector to develop best practice guides, which will be shared with key stakeholders and decision makers.

We will also help PFMCs gain access to finance to solve their working capital shortages. Lack of capital is one of the main challenges in the coffee sector. We have learnt from previous experience that without capital, producers are unable to transport, process, sort and test coffee to achieve the quality demanded by the market. A credit facility will be established in a revolving fund system to be able to address many cooperatives fairly and equitably.

Who are we working with?

This project is funded by Pilot House Philanthropy and the David & Lucile Packard Foundation.