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A new government body, ‘Coffee Authority’, is under formation, Capital learned. For over half a century, Ethiopia’s major foreign currency income was backed by coffee export, although the sector has been going through various up and downs. To tackle the problems both in marketing and production, the government has now decided once again to form a self-governing entity for the sector.
The new directive that is expected to be endorsed shortly by the Council of Ministers would allow the formation of the Coffee Authority, making the coffee sector an independent division. It is now run under the Ministry of Agriculture (MoA).
According to sources, the new authority shall be responsible for the coffee sector development, marketing and researches to boost plantation as well as quality production.
Coffee, before being administered under the agriculture ministry, used to be governed through the Coffee and Tea Authority, an entity that used to be responsible for the development of the sector for several years. The latter carried out the nursery of coffee plant and distribution for farmers. It also engaged in developing selected seeds to boost the sector’s development.
The Coffee and Tea Authority was also responsible to monitor the production and exportation of all coffees through an auction system. It was later replaced by the Ethiopian Commodity Exchange, which commenced coffee trading in 2008.
The first such body responsible for coffee was the National Coffee Board of Ethiopia (NCBE) that pioneered coffee certification when established in 1957. The NCBE’s aims were to control and coordinate producers’ traders and exporters’ interests and to improve the quality of Ethiopian coffee.
The sector experts said that the formation of an independent office for coffee is necessary to ensure the sector’s development. They said that the sector has been affected since it was attached to the MoA.
“The coffee sector needs a very close attention and the formation of the new entity will be a good advantage to continue with its development,” experts said.
Even though the Ethiopian coffee bean has good flavour with different varieties, it has not been able to fetch the proper premium on the international market.
Various studies indicate that Ethiopia is the primary centre of origin and genetic diversity of the Arabica coffee plant.
The labour-intensive tree crop also provides much employment in rural areas and is the means of livelihood for over 25 million people in Ethiopia. It also retains the major share of the GDP. The total amount of coffee that is exported in the past fiscal year is 199,104 tons securing USD 746 million, representing the leading revenue from exports in the past year for instance,.
According to the original plan at the end of the Growth and Transformation Plan, the government has targeted to export 600,970 tons coffee bean, but seems to remain quite far when compared with its current performance.