The hegemony of poured concrete and “washed Ethiopians”

14 minute read

Meeting with smallholders in Bensa, Sidama, Ethiopia in February 2019. Pictured, you’ll find many producers whose names you might now recognize: Nguisse Nare, Bekele Kechara, Bekele Belaychow and Basha Bekele.

This piece is inspired by curiosities surrounding Aviary’s release 005: Bekele Belaychow as well as upcoming, to-be-announced release AVIARY#007. AVIARY#005 is available for pre-order through the Aviary website. To support this blog and the work I do, and to place this piece in context of the coffees that inspired it, please consider ordering.

It was dark by the time we arrived in Bensa, where we’d accepted an invitation to meet a group of smallholder farmers one night in February 2019. We gathered under a makeshift tent constructed of fabric framed by eucalyptus wood, the twenty or so smallholders and our group of foreign buyers, to keep dry as the ripening rains passed overhead.

Before the 2017 proclamation, all of assembled farmers sold the coffee they grew as ripe cherry to local cooperatives within the Sidama Coffee Farmers Cooperative Union (SCFCU), like the Hache Cooperative. The horizontal organization of smallholders into cooperatives can help smallholders leverage collective bargaining to challenge the imbalance of power they face in the global coffee trade and access global markets. Well-run cooperatives provide ways for smallholders to aggregate coffee, pool resources and improve the price they receive relative to the local market. But often, particularly as they mature and gain strength, these cooperatives—even the best-run ones, those free of issues of corruption and greed—can damper a smallholder’s agency or potential for profit relative to self-export.

Even when a cooperative pays well, the value of ripe cherry is lower than that of dried parchment or cherry, ready for milling and export. Owning more of the means of production is a way that smallholders positioned to do so can improve their economic position and prosperity even in contexts with a well-developed cooperative and union structure, and so, when the government permitted smallholders with two hectares of land or more to obtain export licenses, the group of producers we met in Bensa did.

But without buyers, they still needed to sell their coffee through lower-paying local channels—and so we were invited.

Our itinerary was complicated by the difficult road from Guji, which could be dangerous after nightfall both in terms of visibility and security, and we arrived later than we’d intended. After introductions and a few words from each of our representatives, we shared a meal of enset—the cultural food of the Sidama people made with the mashed, fermented pulp of false banana trees—and departed for our lodgings for the night.

The next time I would see most of these farmers again—this time as suppliers—would be nearly four years later.

In the Southern Highlands, harvest began late, in the middle of December 2023. As the harvest progressed from lower to higher elevations, Bekele Belaychow began collecting cherry from his own farm at 2250 masl as well as purchasing cherry from 100 or so neighbors around him that he processed at his drying stations in Bombe and Kokose. Export, however, wouldn’t happen until April or May—meaning he wouldn’t receive payment for today’s production for nearly 6 months, financing his operations all the while with what little credit was available to him in an inflationary economy afflicted by a currency crisis and the aftershocks of civil war.

For the five years he had his export license, Bekele had been able to sell his coffee through direct export channels. Crop to Cup was his first direct export customer—after our meeting in Bensa that night in February 2019—but he produced more than they could buy and so maintained relationships with specialty importers in other parts of the world. When prime rates crept up following the pandemic, both the middle and the ends of the value stream got squeezed; shortly before we returned to his drying station in 2023, Bekele told us that one of his other principal buyers had gone out of business. “Two years ago, they gave 2 or 3 million birr in pre-harvest financing in Bensa,” he told me. “This year, they didn’t return.”

Financing plays a critical role in coffee production and the global coffee supply chain. Harvest, which typically extends anywhere from 2-4 months, is a cash-intensive period for coffee producers, particularly those who export. For them, payment follows export—which can come six or eight months following the first delivery of cherry. For activities related to the harvest—purchasing cherry and supplies, paying the wages of staff and pickers, and the storage, transport and milling of their coffee, not to mention the day-to-day costs of living and supporting a family—most producers rely on financing, often provided by a bank or private exporter.

During the 2023-2024 harvest in Ethiopia, banks offered loans with 14% interest rates and 1-year repayment terms, but the foreign currency shortage and liquidity problems in Ethiopia leading up to its default on a foreign debt relief package on December 16 meant that, for smallholder exporters who relied on coffee production for income, it was difficult to access the working capital they needed. Private export companies stepped in to fill some of this need—at considerably higher interest rates of 18%. During our visit in December, the government-reported inflation rate was around 28%; the producers I spoke with, though, said it seemed higher still. High inflation meant that in order to float through the nearly year-long harvest and export cycle, a producer would have to borrow more (increasingly less valuable) birr than they initially needed, compounding their expenses.

For many coffee exporters, collecting USD—a strong and stable currency—is often the primary goal of export. Large exporters in Ethiopia use coffee for arbitrage, selling it as a way to secure foreign currency through trade which they can use to purchase goods for import into Ethiopia and resell locally. This means that in years like 2023 and 2024—when foreign currency is scarce and the only way to get it is through the export of commodities like coffee—competition for cherry is high. Large exporters will pay increasingly high prices to obtain as much cherry as possible, driving up the local cherry prices to unsustainable levels. In the 2022-2023 harvest, before the government relaxed how much foreign currency an exporter could hold following sale, cherry prices in the south reached, during peak harvest, 75-80 birr per kilogram of cherry; when I first started buying in Ethiopia in 2014, the price was 14. During the 2023-2024 harvest, even with relaxed foreign exchange regulations and the ability to obtain the USD they required through fewer contracts, cherry prices in the south remained elevated at 38-43 birr per kg; the government’s minimum registration prices for grade 1 coffees, meanwhile, were down.

And because, to them, coffee is just a means to an end, large exporters can, after collecting as much cherry as possible at elevated prices, turn around and sell at a loss. Small exporters like Bekele who rely on coffee for income do not have this luxury; they must sell their coffee above their cost of production or be reduced to bankruptcy. It’s a risk: if buyers don’t show up—because of quality, or high prices, or indifference, or because they go out of business—their coffee will need to be sold through other channels, for less money. 

If buyers don’t show, or aren’t willing to pay a fair price, smallholders like Bekele Belaychow lose. This is a consequence of the macroeconomics in Ethiopia, and of the microeconomics of cherry competition driven by large export companies. 

Just down the road from Bekele sits a cherry collection center for Daye Bensa, the second-largest exporter in Ethiopia, whose offerings grace the menus of quality-focused roasters and competitors around the world. As the Daye Bensas of the world drive up cherry prices, small exporters simply can’t compete.

While perhaps best known for traditional dry processed coffees, with the opening of direct export channels, smallholders in the South have begun to experiment with alternative processing practices such as anaerobic-style naturals as a way to differentiate their coffee and increase its value. 

In the 2021 Cup of Excellence competition, the winning lots—from Tamiru Tadesse Tesema in Bensa—were anaerobic naturals. Six more coffees from the top thirty were in some way unusual for Southern smallholders—honey or anaerobic lots—all of the top 10 were from the South, and all but two of the top 30 were dried in cherry. In 2022, this trend continued, with the third place winner (from Daye Bensa) processing using an anaerobic-style preparation and all top 30 being dried in cherry.

Historically, washed coffees fetch the highest prices in Ethiopia; this is largely owing to the fact that the ECX system automatically graded them as grade 1 or grade 2 and required that washed coffees be exported. Southern Ethiopia became famous among third wave buyers for its dazzlingly clean, floral washed coffees, produced at large-scale washing stations built by formal cooperatives or, in the pre-ECX days, by private exporters. But washed coffees require infrastructure; Southern Ethiopian wet mills traditionally have poured concrete tanks the size of swimming pools, washing channels big enough to float a canoe, and pulpers designed to process hundreds of tons of cherry per day overlooking fields of raised beds covering the land like a solar farm built to dehydrates coffee instead of generating electricity. The cost of this infrastructure is massive, and even with a robust outgrower network and trucks for cherry collection, smallholders like Bekele would individually lack the capital or raw material to operate a washing station of this scale efficiently.

Smallholders endeavoring to self-export could most readily access the export market by drying their coffee themselves using little to no infrastructure, which lends itself to traditional methods like naturals. And so as smallholders across the world—in Ethiopia, Colombia, Kenya, Mexico—make the leap from selling cherry to cooperative unions or private washing stations and lacking the infrastructure required to produce washed coffee, we’ve observed that many of these smallholders will produce naturals as well as the rise in popularity of so-called “anaerobic” naturals, which require no more infrastructure relative to traditional naturals other than plastic tanks with a lid—material that is available locally and inexpensively. 

A small investment in plastic tanks can allow a producer to increase their number of products and cup profiles without over-leveraging themselves and enable them to preserve their financing for the purchasing of cherry for processing. Processing coffee in an anaerobic style enables producers to safely  produce coffees with differentiated profiles that can cup higher and offer more distinctive cups than their conventionally processed counterparts, making those smallholder-exporters more competitive in a market where power is often consolidated among large private entities. In Ethiopia, the minimum registration price for anaerobic naturals in December 2023 was $8.80—significantly higher than the minimum registration price for naturals or washed coffees (though in practice very few exporters actually sell at this registration price, instead selling them between the anchor prices for anaerobics and naturals and declaring them to be naturals).

While somewhat polarizing, these processing styles genuinely can disrupt the cycle of export consolidation and hegemony of large, centralized washing stations and exporters by empowering smallholders to increase the market value of their coffee—and if the results from CoE are any indication, this strategy does seem to have merit. Add to that the fact that, unlike washed coffees, anaerobic processes do not need to be exported and can be sold through the local market should a producer not find a buyer or suffer a contract cancellation and the advantages of these processes for smallholders becomes clear.

But the reality is that, among buyers, anaerobic coffees—even the highest-scoring ones—have, at best, a checkered reputation, and the chorus of lament mourning the decline in availability of washed coffees echoes across pre-ship cupping tables, particularly for companies whose focus is smallholder coffees. And as buyers lament the present state of coffees, they begin to look elsewhere—like Colombia, where fully-traceable, single-producer exceptionally high-quality microlots of washed coffees are available at prices comparable to washed Ethiopians produced at large scale.

This creates a feedback loop that resonates over years.

If the difficulty with smallholder washed coffees is both in infrastructure and risk, and if we as buyers desire smallholder washed coffees, we must find ways to address those obstacles if we wish to see the participation of Ethiopian smallholders in the value stream rival those of Colombia—a country that has benefited from its smallholder micromill infrastructure, federal agricultural support, and competitive export market—as well as the rapid adoption and advancement of new processing practices.

Large, poured concrete tanks typical of traditional washing stations in Southern Ethiopia

Washed coffee doesn’t have to require expensive, permanent, brutalist infrastructure—and even where miniature versions of that style of infrastructure exists, many smallholders increasingly are opting for more flexible solutions. The same barrels that Bekele used to produce his anaerobics would suffice as fermentation tanks. The plastic material is cleanable and retains heat well—improving the fermentation kinetics relative to tiled tanks, which readily leech heat from small masses of coffee. The tops are removable, too, allowing for control over the fermentation environment and different styles of fermentation, and because they’re relatively small and portable, they can be moved in or out of the shade or relocated as needed. And they’re easily scalable by adding more tanks: If he needed more, he could buy them cheaply for about 1,500 birr ($25-30 USD).

He already had drying capacity at the two drying stations he owned, in Bombe and Kokose, where naturals and anaerobic naturals dried under shade for up to 30 days. Between the two, he could process up to two containers of coffee per year. Washed coffees, which lack the thick skin and mucilage of naturals, would dry more rapidly—30-50% faster than naturals—increasing his theoretical capacity.

But financing the lot remained an issue and he would own the risk resulting from making the lot—and, of course: he didn’t have a pulper.

A year before, I’d been angling to find a way to produce smallholder washed coffee in Ethiopia and started putting together a plan of what that might look like, modeled after similar methods I’d seen in Latin America. We’d arrived too late in the harvest to execute it, though, and so focused on other interventions.

In December 2023, though, with harvest delayed until after our visit, timing was right.

Bekele Belaychow’s drying station in Hora Ganet, Bombe, Bensa

A producer from whom Crop to Cup had bought from for years (and whose coffee I bought every year it was available until he sold his farm) owns a machinery company called GEM Coffee Equipment. GEM is credited with installing the first huller in Guji and has built traditional-style large-scale washing stations all over Ethiopia. But in addition to large equipment, GEM also manufacturers small, single-disk hand-operated pulpers. Even in remote regions without electricity, these pulpers enable coffee producers to separate the skin from the seed of their coffee cherry by turning a crank. The cost was relatively inexpensive for U.S. standards—about 135,000 birr (using black market exchange rates, about $1,400 USD) and the machine could be fitted with a motor later to improve efficiency at a cost of 50,000 birr.

For this pilot project, we purchased three GEM handpulpers (through Crop to Cup) and distributed them to key suppliers in Bensa—chief among them, Bekele Belaychow.

Bekele Belaychow and Basha Bekele standing with their new GEM hand pulpers in Addis

Like the rest of the informal collective of smallholders he negotiates the pricing of his coffee with, Bekele is experimental, quality-driven, and deeply understands the specialty market. He’s a connector and a consummate professional—an ideal partner, willing to engage with every idea for improving his coffee and helping his community. As long as he didn’t take on additional risk and had an opportunity for upside, he was willing and eager to produce coffee to our specifications.

I wrote a protocol for Bekele with illustrations and step-by-step instructions that Moata translated into Amharic; and with the hand-pulper came a provisional contract from Crop to Cup with a promise to buy all of the coffee he processed using the pulper. This contract was backed up from the interest from roasters via forward bookings—including from Aviary.

With his risk managed, pulper provided, and buyers lined up, Bekele produced the first single-smallholder, washed coffee I’d ever tasted from Southern Ethiopia.

[n.b.: we actually called it a “white honey” because the agitation process I prescribed didn’t fully remove all of the mucilage at the termination of the 48 hours of fermentation]

Bekele Belaychow overseeing the milling of his coffee ahead of export in March 2024

When it comes to smallholder equity as it relates to financial participation in the value stream, there are really two things that matter: the price paid, and the speed of payment.

While civil war in the North overshadowed the 2020-2023 export cycles, in 2024, war in the Middle East spilled over into the Red Sea as Houthi drones from Yemen struck foreign vessels in protest of the Israeli government’s campaign of massacre in Palestine. This, in turn, brought shipping through the Red Sea to a standstill. 

The primary route for export from Ethiopia to Europe and the U.S. is through Djibouti, accounting for 95% of all trade from Ethiopia. Moving coffee from Addis used to require a journey of 3 days via truck from the mills in Addis, but the completion of a railway in 2018 reduced the journey to just a day. Once at the Port of Djibouti, coffee is consolidated and stuffed into empty containers received through imports and unloaded cargo arriving at that port. In other words, the availability of containers for export relies upon imports and cargo ship traffic. With the Red Sea essentially closed to cargo vessels, container shortages—like those we’d experienced during the covid-19 pandemic—once again began.

Cooperatives, private exporters, and local markets pay smallholders cash upon delivery of cherry to a drying or washing station (sometimes with a second payment following export)—but immediate payment prior to export is—in a word, uncommon—for smallholder exporters like Bekele Belaychow.

We’d contracted coffee from Bekele and every smallholder exporter we intended to buy from Cash Against Documents, a typical structure between importer and exporter that guarantees payment for the supplier while incentivizing speed for the buyer. Banks act as a trust anchor in these arrangements, essentially holding the goods and shipment instructions in escrow until payment from the buyer is received. Typically, a Bill of Lading must be received prior to release of funds; in ocean shipping, this BOL is not issued until the cargo is containerized, loaded for transport and the vessel is en route. This means that in 2024—just as during the 2020 container crisis in other parts of the world like Colombia—an exporter may not be paid for months after the coffee is milled and prepared for shipment, months later than the typical export cycle and months longer than the exporter had arranged financing to cover. All the while, the coffee would bake in the sun in Djibouti, losing quality and losing value; if the exporter had not yet fixed the currency exchange, the value of the birr against the USD continued to decline, impacted by the rising cost of imports and the stemmed flow of exports. The risk of cancellation would increase; so too would the peril of that export entity.

Even if a buyer did agree to a fair price, if payment doesn’t arrive on time, it diminishes the value of that negotiated price. A high farmgate price is only high insofar as payment is received in the same timeline and context in which it was negotiated.

For 2024, with delays expected through the entire export season, we’d have to find a way to pay earlier; otherwise, payment and shipment expected in April might not happen until June—or later. For its part, Crop to Cup would rely on its intermediaries for this transaction, ensuring that exporters would be promptly, but as that was being resolved a number of roasters—including Aviary—took the step of shipping coffee via Ethiopian Airlines both as a mechanism for ensuring immediate payment as well as a hedge against fade resulting from shipping delays. 

I feel a heavy ambivalence about this; air shipping is carbon-intensive relative to ocean shipping, on a per-pound basis, and adds significant cost to the coffee which, rather than being delivered to a producer, instead goes to a logistics company. But it also virtually eliminates the risk of transit-related fade and minimizes the temporal distance between pre-ship approval and arrival.

I decided to take the long view. 

If, because of a reputation of declining quality or poor experience with coffee, buyers continue to walk away from Ethiopia and exports continue to decline, the future of Ethiopia’s coffee industry becomes uncertain; if the future of Ethiopia’s coffee is uncertain, so too follows the global industry. Quality is just one tool that we have as buyers and roasters for creating interest surrounding a narrative or producer or producing country—but it’s a powerful tool, and one that I was attempting to leverage. So, it was important for me to present the coffee I’d contracted and helped to create in its best form rather than a faded-out, paper-bag ghost of its former glory.

Additionally, with a quality-based premium for Bekele hanging in the balance contingent upon its quality upon arrival, I wanted to ensure that mechanism for sending more value back to a producer was successful. It was an imperfect solution—but it was the best of the imperfect solutions I had.

And so it took the same journey I’d taken myself, from Addis to New York, inside a 747 flown by Ethiopian Airlines.

Before I return to Ethiopia later this year, another Cup of Excellence competition will have taken place.

I expect I’ll see names on the top 30 list that I recognize: producers that I know and have visited or have bought coffee from, or else one of the denizens of the Southern Highlands who’ve become famous for the quality of the coffee they produce. And I expect that, as in previous years, the list will be dominated by naturals and anaerobic naturals, many if not all produced by smallholders.

But I also expect that after tasting the cup outcomes from our work this year, we may begin to see washed coffees, and more honey-processed lots created by smallholders finding their way onto the Cup of Excellence winners list and on the offer lists of specialty importers.

If the qualities we tasted from those three producers is any indication, there’s no problem with quality in Ethiopia: there’s merely a problem of regulation and economics.

As buyers, we can wield our privilege and power in the value chain in ways that work against or even overcome the hurdles faced by smallholders seeking engagement with the specialty market and quality-focused, better-paying specialty buyers. Mechanisms like pre-crop financing, forward contracting and material support—as well as socializing a producer’s coffee broadly to help them build a brand and name for their coffee—provide a basis for supporting smallholders as they begin to break the hegemony of large exporters in Ethiopia.


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