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Biftu Gudina Farmers Cooperative

Jimma Zone, Goma District, Bersoma Kebele, Ethiopia
Partner since: 2016 Traceable to: 183 Farmers Altitude: 1980 - 2200 MASL Varietals: Heirloom
Processing:

Farmers deliver cherry to one of two central washing stations, where they are processed using a JM Estrada eco-pulper before overnight fermentation of 10-12 hours. Drying takes 10-11 days on raised beds, with first few days under a shade while surface moisture dries away.

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Community Context

Biftu Gudina Cooperative operates in a remote pocket of the Agaro Region in Western Ethiopia. There are no all-season roads, so as recently as 2012 farmers would walk their cherries over 5 miles to the nearest town, Beshesha. On the way, cherry would bruise, break and over-ferment, resulting in poor prices. When the Coop was founded in ’12 it immediately built a wet-mill and constructed a gravel road connecting the mill to Beshesha – with assistance from Technoserve.

Today 155 members within a 2.5 mile radius deliver cherry to their own washing station. Meticulous processing leads to a floral, bright, honeyed cup that shines as an example of world-class coffee from Ethiopia’s western frontier. Perhaps it is appropriate that Biftu in the Oromo language means morning sun and Gudina means growth/development. Whether we are talking about the cup or the community we would agree that “”bright development”” comes to mind.

Recently the coop completed its Organic Certification, funded the development of electricity, and built a kindergarten (1.2M Birr). In 2018 they sold 138,120 kg (About 8 containers) and shared a dividend payment of 2,402,896 birr to their members.

In 2009 Technoserve began working in Ethiopia, on a two-fold mission to (1) improve the value (quality) of coffees produced and (2) to make sure the farmers of that coffee were receiving a higher percentage of the value they were creating. Since 2009, 60+ washing stations have been created, alongside the ongoing field-work and support of Technoserve’s Jimma staff. The approach has been successful by all accounts. Farmers own their own equipment (financed and paid down over time), they negotiate their selling prices, and pay a small commission for processing and export (5% commission + costs). With the quality support and feedback from the Technoserve cuppers in Jimma, they grow better coffee and keep more of the value of that coffee.

This was the work that attracted us to Western Ethiopia and that introduced us to Moata (then a Field Trainer and QC manager for TNS). We still believe it was some of the most effective coffee work we’ve seen. In 2015 the funding for this work ended and the project came to a conclusion. While many of the washing stations that were created had attracted private specialty buyers – the coops were being mismanaged by the Oromia Union, who was only begrudgingly following through on the original agreement it struck with these new businesses. The result was that there was great coffee coming from these coops (Biftu, Duromina, Yukro, Nano Challa) but they were very hard for buyers to get (Ormoia Union was not responsive), often delayed in milling and shipping, and the coops themselves were not at the table to negotiate their own deals. The following year, they left Oromia Union, and founded the Kata Maduga Union, which was anchored by these very successful coops.

Certainly, this was a delicate time and a real test. These farmers were at the top of their game from a processing point of view, but running an exporter is a different ball game altogether. Furthermore, if this new Union failed, the 90 million dollar grant and almost a decade worth of work, might be materially harmed, then disappear. It didn’t fail. It’s grown over the years, it published its second payments, it has heavily reinvested in the communities that it represents and is managed by farmers and coop leaders from the area who serve with integrity.

Kata Maduga and the coops it represents are a textbook illustration of smallholder success in specialty. Every year we wish we could find more customers for these delicate, sweet cups – knowing the rich legacy and courageous past of these producers who took their futures into their own hands.

Country Context

Ethiopia is a coffee powerhouse. It’s the birthplace of the plant, the seventh largest producing country in world, and one of the world’s leading consumers of coffee as well. Because coffee is such a vital part of the economy in Ethiopia, the government has a hand in it, making for an interesting coffee context. Ethiopia is proudly a nation that has never been colonized, and the longtime government has been from a tribal minority (the Tigray). In 2018 there was a coup that installed an Oromo president – the largest tribe in Ethiopia. Its namesake region, Oromia, sprawls awkwardly south and west from the capital city Addis Ababa – and covers the majority of coffee territory in Ethiopia.

Of the over 100 million people in Ethiopia, almost 15 million rely on coffee for income. Coffee accounts for 60% of foreign income, and is about 40% of total country exports. For the scope (Africa’s largest producing country) and importance of the industry, there’s a surprising amount of consolidation. Things are constantly changing in Ethiopia but for the most part, buying happens in three ways, from an Exporter who buys off the ECX, from a Coop Union which markets coffees collected from member coops, or direct from a single producer or estate (as long as they have a farm over 2 hectares, they can export). You can see more about these below.

ECX: The Ethiopian Commodity Exchange was established in 2008, with good intentions. The idea was to make market prices / price discovery available to rural sellers. The ECX installed tickers at 32 rural sites and also push notifications to a quarter million subscribers. The idea was, that this would protect farmers from predatory buyers. The ECX established 55 physical warehouses, where coffee is held across the country. Farmers bring parchment to the warehouse where it is graded by cuppers and given a designation. Contracts are sold to buyers that have seats on the auction. Contracts are all for 30 bag quantities, and buyers do NOT get to cup the lots before purchasing. When the ECX first opened, the mandate was that coffee had to go through the ECX. Quickly, warehouses overflowed, prices plummeted. There was also an outcry from specialty coffee buyers who wanted to work directly, or taste coffees before contracting. Certainly, it was a difficult launch. There’s a good “Market Watch” piece on it called, The Market Maker. Those regulations were soon relaxed, allowing for some direct trading to continue with individual farms. However, the regulations still maintained that buyers and sellers be de-coupled. Previously, exporters often owned wetmills in Ethiopia and could buy cherry and sell green. Now, wetmills are required to sell to the EXC, and exporters are required to buy from the ECX. In other words, wetmills cannot not directly sell to exporters.
As it stands now, the only way to get exceptional coffee from the ECX is to buy it, then cup it see if you like it. If you don’t, you’re stuck. This process isn’t practical for a specialty buyer, so oftentimes exporters will allow specialty buyers to cup through their purchases from the ECX and select the ones they like – the exporter can then use the coffees not selected to fill a commodity contract for another buyer. While this can result in good coffee, the traceability is lost and the ability to replicate that coffee next year is only as good as the cupper and relationship with your exporter.

COOP UNIONS: When we first arrived to Ethiopia in 2013, there were only 5 operating Unions organized by geography (Oromia, Sidama, Yirgacheffe, Limmu and Bench Maji). Oromia (extending as it does) is the largest, with 405 member coops, followed by Sidama Union, tiny in comparison with just over 50 coops represented. Yirg Union is smaller still. Coop Unions have a standard model in Ethiopia: buy coffee at the auction price, sell coffee to a buyer and collect 20% of the profit as service fees. From, there they split the remaining profit 70/30 with the coops they bought from. Unions are generally known in Ethiopia as FTO suppliers. Coffee that move through the ECX do not carry certifications, so the only place that you can get certified options are Unions and private farms.
Recently, a new Coop Union was established called Kata Maduga. It brought together coops in Jimma that were formed by Technoserve work, and previously managed by the Oromia Union. These coops felt that their qualities were exceptional and that they could better represent themselves. It is now in its 3rd harvest, is a healthy Union and growing. We’re big fans.

PRIVATE FARMS: Private farms are self-explanatory in many ways. Since 2008 and the establishment of the ECX, private farms have been the one option that preserve relationships and traceable coffee. The issue has been that Ethiopia is so populous, that farms large enough to fill a container, or produce an export size volume of coffee are rare. Where they do happen is most commonly seen in the west (Jimma and Keffa Zones) where land redistribution has formed larger coffee blocks.

Similarly, you may also find a landowner that builds a mill on their land, and buys cherry from surrounding farmers. This is called an out-grower scheme. They can directly export these coffees, and this has been a major loophole for wetmill owners who were affected by the ECX regulation. For examples, if I had a wetmill only, I have to sell to the ECX. But If I have a wetmill and I buy the farm it’s on and register that farm for direct export – now I can sell all the coffee from my mill to direct buyer and bypass the ECX. While this does happen, the only ones that can do it have both money and political clout, stacking the deck a bit against the smallholder.