How bad is the Ethiopian coffee situation?

Michaele Wiessman, author of God in a Cup, has the best summary yet:

Now the Ethiopian government is in effect re-nationalizing its coffee industry–coffee is Ethiopia’s most important export. The re-nationalization appears to be slamming the door on specialty buyers who in recent years have roamed Ethiopia in search of small lots of super high quality coffee from small Ethiopian farms and cooperatives for which they have paid $3 a pound and up. [JG: For comparison, Fair Trade guarantees only $1.26/pound.]

Under the new system private sellers are banned. These “privates” have had their licenses to operate taken from them. They are no longer legally allowed to buy, process and market small lots of super expensive coffee.

Instead, the government has created a controlled commodities market on which virtually all Ethiopian coffee will be sold. (Some large, government-friendly cooperatives will apparently continue to have some autonomy.) Under the new rules, coffees from 24 different geographic areas will be aggregated, cupped and graded together. All coffees from, say, Yirgacheffe Area A, Yirgacheffe Area B, Harar and so forth will be slotted into one of nine different quality grades and sold together. Which means that the farmers working in particular cooperatives will no longer be able to increase their earnings by adopting improved agricultural practices and growing better coffee.

This notion–that farmers who work harder and produce better coffee ought to be paid more is the core notion of the specialty coffee industry. Everything else that specialty buyers and roasters are attempting to accomplish flows from this basic premise.

Enjoy your Ethiopian microlots now, folks. It could take years to recover from this.