U.S. Government to Help Improve Ethiopian Coffee Trade

Ethiopia coffee warehouse. Photo by Pete Lewis/UK Department for International Development

The United States government has renewed its interest in the Ethiopian Coffee industry. In a memorandum of understanding with the five-year-old Ethiopia Commodities Exchange (ECX), the United States Agency for International Development (USAID) says it will help increase the quality, traceability and marketing of coffee, as well as help develop more farmer cooperatives.

As part of the agreement, the USAID Agricultural Growth Program-Agriculture Market Development Project (AGP-AMDe) will collaborate with ECX to improve the ability of sellers and buyers to track the origin of coffee through electronic coding and marking, certify labs and coffee quality graders, increase the number of farmers’ cooperatives and improve ECX warehouse efficiency. USAID hopes the joint efforts will improve the integrity and marketability of the coffee trading system in Ethiopia.

USAID’s AGP-AMDe project is a flagship project under the U.S. President’s Feed the Future (FtF) Initiative in Ethiopia and its implementation is led by ACDI-VOCA.

Here’s more from the AGP-AMDe:

ECX, the first modern market in Ethiopia, commenced trading operation in April 2008, with contracts traded in coffee, sesame, maize, wheat, and pea beans. ECX is a market place where buyers and sellers come together to trade based on warehouse receipts, assured quality, delivery and payments. It is a national multi-commodity exchange that provides market integrity, enhances market efficiency, ensures market transparency and allows risk management.

The United States was among the first donors who supported the establishment of ECX. USAID funded four technical advisors and supported the coffee Direct Specialty Trade (DST) linking smallholder farmers with international buyers, warehouse equipment, and the Warehouse Receipt System (WRS).

“We are extremely happy to see the renewal of our cooperation with the Ethiopia Commodities Exchange,” says Mr. Dennis Weller, Mission Director, USAID Ethiopia. “We believe in the ECX mission to be a structured trading platform for buyers and sellers that addresses the fundamentals of commodity transactions: quality, quantity, payment and delivery.”

“This MoU demonstrates our commitment to enable smallholder farmers to reap the benefits of their produce by enhancing their direct participation in ECX’s trading system”, said ECX CEO Anteneh Assefa. “ECX is undertaking various efforts to grow the number of full member farmers’ cooperatives from the current number of 15. This is only one of many improvements to come with the support of this partnership.”