The general pattern of TNS work in Ethiopia is to set up a cooperative with a washing station, financed through a banking relationship that TNS brings to the table. The coop pays-down the washing station through coffee sales over the continuing years. Additionally, TNS negotiates a commission-based service agreement with the Coop Union. This means that farmers can work with TNS and their private buyer to set prices. It also means that all sales but for a 10% commission to the Union, goes back to the farmer (significantly more than the 70% guaranteed by the Union). This arrangement was a hard-fought victory for Technoserve some years back. When we floated the same fee-based commission structure to the Coop Unions, the proposal was flatly rejected. It seems that the success of the Unions (who have a monopoly on certified and traceable coffees), has created a pretty significant imbalance of power between the union and the actual coop. We’ve also found other organizations providing farmer support, but not on the scale of TNS.
Overall, we left feeling is a little bit skeptical about the ability of exporters to properly provide any regional designations outside of a coffee’s basic ECX grade. Is that Yirgecheffe really from the Kochere district? Hard to say. That in mind, it’s clear that if you cup enough ECX lots, you’ll find some stellar coffees. The importance of having a solid network of Exporters buying from the ECX, is that it is you’re only way of discovering quality lots, year-over-year. In other words, to have consistent access to great coffees in Ethiopia, you have to start from scratch each year and have someone on the floor, purchasing Q2 lots, cupping them, and setting them aside if they’re exceptional coffees.
We like what the unions are making possible, but purchasing from them really requires playing the game every year… flying into Addis and performing the cupping round-robin, as the harvests begin. There’s not necessarily and exclusivity on these lots, so as a buyer, you’ll be prioritized based on your purchasing volume, price offer, and relationship with the union. The early-bird will get the worm – so the strategy with most buyers is to purchase the plane ticket and fly out in October or November.
We ended up being the most excited to find either private farms or individual farmers that are looking to take the next steps and establish themselves as an exporter.
From our perspective, working with a farmer to directly export is a time-consuming and risky endeavor that will require many visits, constant communication, and continual coaching. We’ll need to build a network of in-country resources for the farmer to draw on for financing, legal/procedural work, and of course coffee quality/washing station construction.