Ethiopia's Coffee Sector: A Bitter or Better Future?

Abstract

Coffee, Ethiopia's largest export crop, is the backbone of the Ethiopian economy. The Ethiopian coffee sector is highly dependent on international prices and affected by the structure and workings of the world coffee market. In this context, this paper seeks to identify what can be done in Ethiopia to improve the performance of the sector so as to yield benefits for the government and the estimated 15 million people dependent on coffee in the country. The paper argues that despite a limited room for manoeuvre, Ethiopia has not yet fully exploited its position as the producer of some of the best coffees in the world. A number of competitive advantages may still be seized if quality and consistency are guaranteed. In order to maximize this potential, and on the basis of a critical analysis of government policies and donor interventions in the sector, a number of recommendations are made.