Dr Adugna Debela presentation - Production and Research - How do we enhance coffee production in Africa

1. Source: UNCTAD secretariat based on data from ICO Statistics; Worldstopexports.com.
Presented on
G25 AFRICAN COFFEE SUMMIT
Adugna Debela (PhD)
25 to 27 May 2022
Nairobi, Kenya
Production and Research: How do we enhance coffee
production in Africa

2. How do we enhance coffee production in
Africa
• Coffee grows in 25 African countries
• Is 10 source of export revenues
• But, the sector in Africa has been
underperforming
• continent’s share of world output and
export has steadily declined

3. • Africa’s coffee production has had a
negative growth trend
• declining from an annual average of
about 1.2 million tons in the 1980s to
about 1.03 in 2019

4. Low
income
Low liquidity
Low
yield
• low level of production and
widening yield gap over time
• Inefficient supply chain
• Poor policies
• It is necessary to address the
contributing factors to low
coffee yield
• thus put the coffee sector on a
higher growth trajectory

5. Low level of yield

6. But, Some policy interventions in
Africa resulted to mixed results
o Example: Initiatives for
agricultural commodity
exchanges produced
o are unable to tackle all the
challenges they face (Songwe,
2016)
o Zambia and Zimbabwe suspended their
operations following unusual price
hikes
o Kenyan and Uganda have not been able
to attract sizable trade volumes
Policy failures

7. policy failures
In Ethiopian ECX,
o coffee farmers received lower
values from international prices
(Hernandez et al., 2017)
o They lost 26% of their potential
income (Leung, 2014)
o traceability along the value chain
was interrupted

8. Policy failures
 have prevented Africa benefiting
from the comparative advantage in
coffee production
 Scholars estimate that eliminating
policy distortions in agriculture raise
output by 4.7%
 but no significant efforts have been
made towards this direction
Coffee Production and Marketing value chain in Ethiopia
Coffee Farmers
Exportor and Coffee Processor
Coffee Q.Inspection
Center (CLU)
International Buyers
Coffee Roasters
Reject
Primary Processor
Wholesalers
Retailers
Domestic Consumption
Producers (Growers)
Cooperatives / Unions
Suppliers
Coffee Collectors
Warehouse and Q.Grading
Primary Market and Commission Agent
ECX
Intermediary (2) (Brokers)
Intermediary (1) (Brokers)

9. policy failures
Allow farmers to directly export or
 vertically integrate with exporters
o Ethiopia introduced a new coffee
quality and marketing policy

10. o infrastructure is one of the
bottlenecks in Africa
o Africa’s poor quality transport
infrastructure accounts for
 40% of logistics costs in
coastal
 60% in landlocked
countries
(UN-Habitat,2014)
regional connective failures

11. o Improve regional connective
infrastructure, e.g. roads and ports
 reduce transit time and costs
 improve trade performance
and coffee production
regional connective failures

12. Coffee consumption in Africa (2016)
o Consumption, in Africa is also notably
on the rise
o between 2015 and 2019, ICO figured
that consumption in Africa’s increased
by 8.3%
o Africa should develop policy and
promote domestic coffee consumption
and non-tariff barriers
Non-tariff barriers on cross-border movements of goods

13. Generally,
 Government interventions is
necessary to
 address these constraints
 restore the coffee sector
 enhance the effectiveness of the
different coffee researches
 develop conducive policy and
implementing institutions
 To that effect provision of
 need-based technical assistance
to the public sector
 subsidized inputs and extension
services
might also be another intervention to put
the sector in a growth trajectory
Thank you
so much
Recommendation