KNOWLEDGE FOR LIFE

development projects

Coffee, produced by over 50 countries, is one of the largest traded commodities in the world. It provides livelihoods for some 25 million farming families, and is crucial to the GDP of many countries.

so what’s the problem?Supply and demand are in very tight balance, and as more markets emerge, more and more coffee is being consumed. With statistics showing that African production is falling behind, it needs ways of increasing production and quality. In countries such as Ethiopia and Rwanda where coffee plays a critical role in the economy, revitalising coffee production and quality is vital; allowing farmers to attract premiums and improve their household income.

Despite the superior varieties of the coffee, the optimum soil and the climate, the industry has declined substantially here. Not only has the value of coffee exports declined, volumes have similarly declined.

guaranteeing credit to coffee farmers in Ethiopia and Rwanda

locationsEthiopia and Rwanda

project datesFebruary 2011 – Dec 2015

project teamCharles Agwanda Alphonce Werah

what is this project doing?Following up on a previous three year pilot project aimed at improving coffee quality in Rwanda and Ethiopia, this project aims to continue to improve processing practices by smallholders here. This will result in an overall sustainable increase in the quality and quantity of sun-dried, semi-washed and fully washed Arabica coffee.

As many smallholder farmers are reliant on basic equipment to produce their coffee, a credit guarantee scheme has been designed and is being implemented, enabling smallholder farmers to access commercial loans to improve their product. These loans will facilitate farmers to acquire and install improved processing equipment and facilitate cooperatives to purchase and export the resulting high quality coffee produced through the improved processing practices. At the same time, CABI will provide technical assistance to promote good agronomic and processing practices, market information to everyone in the coffee chain, and promote good governance of the cooperative societies.

The previous pilot project resulted in significant improvements in the quality of coffee in Ethiopia and Rwanda, and farmers were receiving higher premiums (in excess of 30%). However, smallholder coffee farmers in Ethiopia and Rwanda are resource-poor and do not have savings and the level of capitalization by the cooperatives is low. It is hoped, therefore, that by giving access to affordable credit, expanding the new processing technologies to non-project farmers and other regions will be made possible.

Inadequate access to market information also undermines the smallholders’ capacity to effectively negotiate in the supply chain. Information is important in planning future production and scheduling of product releases into the market so our team aim to arm farmers and others with the right information to facilitate the best return.

results so farTo allow banks to lend to them, training on financial literacy and good cooperative governance was run by Rabobank for the 20 selected cooperatives in Rwanda. Likewise, training for loan officers were successfully undertaken in both countries. The first loans are now being made and we are monitoring their success.

We identified and selected new cooperatives in Ethiopia and Rwanda (22 cooperatives were selected from 12 Woredas in Ethiopia and 20 cooperatives were identified in Rwanda), where the purchase and installation of machinery, equipment and facilities for improved dry and wet processing was initiated.

Training future trainers was undertaken in Ethiopia for over 100 development agents and in Rwanda for 19 trainers. The team covered a wide range of issues relating to coffee production, processing, quality, marketing and management of farmers associations.

Additionally, the team conducted training sessions across three coffee regions for farmers, namely: East and West Hararghe, SNNP, and East and West Wellega. This involved active participation in lectures, group discussion, debates and presentations. The training also involved field visits and demonstrations. This way the training sessions promoted the sharing of experiences, information and ideas.

contactCABI, ICRAF Complex, United Nations Avenue, Gigiri, PO Box 633-00621, Nairobi, Kenya T: +254 20 72 24450 F: +254 20 71 22150 E: africa@cabi.org www.cabi.org/africa

www.cabi.org/creditguaranteeID

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Charles Agwanda, Project Manager

sponsorsCommon Fund for Commodities (CFC)

Rabobank Foundation

International Coffee Organization (ICO)

partnersMinistry of Agriculture, Federal Democratic Republic of Ethiopia

National Agriculture Export Development Board, Rwanda