Coffee Innovation

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A major concern of the Ethiopian coffee growers is closely related to the quantitative and qualitative impacts on the coffee sector as a result of possible climate change. Among the available solutions to minimize the negative effects of climate change are stand irrigation, forestation and new varieties of coffee. Irrigation and trees can be used to circumvent both excess heat and cold as well as to protect the crops from frost. Mariamawit Solomon, Junior Advisor for networking and the Coffee Innovation Fund at GIZ argues that Ethiopia is the origin of Arabica coffee, and yet we are not the leading coffee producers nor do we have much say on international coffee pricing. Currently GIZ is working in coffee innovation fund that encourages innovation in the production, processing and marketing of coffee at the origin. Capital’s’ Tesafye Getnet talked with Mariamawit to learn more about the innovation work and the challenges of the coffee sector. Excerpts;

Capital: How long have you been working for GIZ and what is your role?
Mariamawit Solomon: I have just joined GIZ about a month ago as a Junior Advisor for networking and the Coffee Innovation Fund. Commissioned by the BMZ (German Federal Ministry for Economic Cooperation and Development), GIZ has launched a new project: Innovations for Sustainable Agricultural Supply Chains in Ethiopia (ISASE). Within this framework, we will be working on selected commodities, namely coffee, Spices, honey and beeswax.

Capital: What attracted you to this new job? What makes ISASE different from other development projects?
Mariamawit: What drew me to ISASE was the way it plans to address the existing challenges through innovative approaches. One of the approaches we will be applying is the so-called “jurisdictional approach” to initiate the establishment of a sustainable production region in the Nono Sale Woreda (Illubabor Zone): We want to showcase that by joining forces with the various stakeholders of the region, it’s possible to move towards a deforestation-free production that provides farmers with a living income. Another example is the Coffee Innovation Fund which is implemented within the framework of ISASE. The fund aims to promote innovation in the coffee value chain. It is implemented in several countries and I’m responsible for its promotion in Ethiopia. On the one hand, this is exciting because I’m in exchange with several coffee- producing countries in Asia. On the other hand, it’s interesting to reach out to innovative Businesses in Ethiopia. I honestly believe that small holder farmers have been excluded from the benefits of their produce, and I think through this innovation fund we will find and support brilliant ideas which can then benefit the farmer and the entire coffee sector.

Capital: What are the major challenges that you see in the coffee industry today?
Mariamawit: The global demand for coffee is steadily increasing and more important, consumers in Europe, America and Asia show a growing interest in high-quality, sustainably sourced products. However, while the industry as a whole is experiencing growth, opportunities to participate have been confined to fewer actors. Coffee growers have only marginally benefitted from the recent trends. We therefore need solutions to increase the farmers’ profitability and to improve their market access. This is precisely where the Coffee Innovation Fund comes into play.

Capital: What exactly is the objective of the fund?
Mariamawit: The coffee innovation fund encourages innovation in the production, processing and marketing of coffee at the origin. It promotes the design and implementation of innovative practices, systems and tools in the coffee sector. Its objective is to increase the profitability of small-holder coffee farmers and implement a more equitable value distribution in the supply chain.

Capital: What kind of ideas are supported by the fund?
Mariamawit: The fund focuses on three major areas: Ideas that focuses on Innovative farming, processing and fermentation systems: The Coffee Innovation Fund supports new and experimental practices to increase coffee quality and environmental sustainability at the farm and processing level. This includes, for example, innovative coffee fermentation methods which create different cup profiles and increase the quality of the coffee beans. Another example is the implementation of a new farming concept that guarantees a deforestation-free production. Ideas that promote transparent & inclusive business models: In view of the challenges described above, another focus area of the fund lies on transparent and mutually beneficial business models. These business models should foster a more equitable value distribution along the supply chain. For example, creating systems such as the blockchain technology, which is a traceability tool that increases transparency and visibility in the value chain. Ideas to create access to new markets: Last but not least, the fund promotes the use of alternative market places and products to access new sales and market opportunities. Examples include digital market places, online auctions and social media marketing systems to increase market outreach and sales.

Capital: Who is eligible to submit a proposal?
Mariamawit: Any actor of the coffee value chain is welcome and encouraged to submit a proposal. This includes small-holder producer organizations, privately owned processors, exporters, roasters, cafes, and any other private organization who is willing to innovate the coffee sector.

Capital: How do applicants submit their proposals? When is the application deadline?
Mariamawit: Applicants should submit their proposals by filling out the idea template, which can be found on our Facebook page. The completed form can be submitted until 31 of August 2019.

Capital: What are the selection criteria?
Mariamawit: The selection is based on the proposal’s potential to contribute to profitability, fairer value distribution and provide new market access. To be more specific we will be looking into the proposal’s potential for impact towards the small-holder farmers. Proposals should offer sufficient level of replicability in other areas. Therefore, proposals should also provide a vision for future scaling of the systems and products developed within the fund.

Capital: You mentioned that the fund will be active in different countries. Which other countries are involved?
Mariamawit: This fund will be active in Myanmar, Indonesia, Vietnam and Ethiopia.

Capital: What is the benefit of this fund?
Mariamawit: The winners of this fund will receive up to 50,000 euros worth of investments.The most successful implementer of the fund will also have the opportunity to take part in an international sharing event!

Capital: Is there anything that is expected from the winners of this fund?
Mariamawit: Yes, the winners are expected to contribute 50,000 euros in monetary or in-kind form towards their winning idea.

Capital: How does the innovation fund aid in overcoming the major challenges you mentioned above?
Mariamawit: There is a large population of coffee growers and processors who lack the resources to bring. Innovation on in the cultivation, processing and marketing of their coffee. They also lack the tools to roll out cost effective measures to improve profitability while upholding sustainability standards. This is where the fund comes in. The Coffee Innovation Fund will support to implement those creative ideas in to actual reality to benefit t the small holder farmers.

Capital: How can Ethiopia benefit more from its coffee exports?
Mariamawit: I believe if the Ethiopian coffee industry moves into the value addition sector that we can benefit more. Through value addition, we will be able to facilitate knowledge and technology transfer, create jobs and utilize local resources and maximize the amount of foreign currency we earn. Core message the innovation fund promotes the design and implementation of innovative practices, systems and tools that can increase the benefits of the small holder farmers and foster fairer value distribution in the coffee supply chain. This fund will contribute up to 50,000 euros worth of investment for the winning proposal to cover cost of materials, technology and technical assistance.

Capital: What does the coffee industry look like in Ethiopia? Is it progressive in comparison to other coffee growing regions? If so, why?
Mariamawit: Regarding the comparative advantage of Ethiopia in the global coffee market our coffee industry is struggling, the demand for coffee is steadily increasing locally and internationally, however, more and more farmers are switching from coffee farming to Khat due to the low selling prices of coffee. According to FAOSTAT, production figures have increased more or less steadily since 2003. In comparison to other countries specifically comparing to Brazil and Vietnam, I believe we are behind on marketing and presenting our coffee to the international market. Also, productivity is much lower compared to other regions, see figures from FAOSTAT for 2017 below. Ethiopia is the origin of Arabica coffee, and yet we are not the leading coffee producers, nor do we have much say on international coffee pricing. We also need to work on how to Produce sustainably, avoiding deforestation and work towards efficient farm practices to increase output.

Capital: What does the future of coffee look like for producers in Ethiopia?
Mariamawit: The future of coffee Production in Ethiopia depends on the international trends and the changing consumption patterns. A clear change among coffee consumers is re-shaping the way coffee is sold and consumed. Coffee is no longer simply a beverage but a lifestyle choice. There has never been a more dynamic coffee industry than today, led by research and innovation in the field of processing, roasting and packaging and. Such dynamism has attracted large capital to fuel innovation in the sector and is creating opportunities for greater market integration and Consolidation. I believe Ethiopia’s coffee sector needs to work towards increasing the living income of its coffee farmers, only when producing coffee is economically sustainable will our farmers continue to produce coffee. I would also like to stress on conserving Ethiopia’s forests. According to an article I came across “the economically valuable forests in Ethiopia, which contain the world’s only wild coffee Arabica populations are diminishing and, at current deforestation rates, will be completely lost in 27 years”.