In trademarking its coffee, Ethiopia seeks fair trade
The move could help the country's coffee growers to earn some $88 million more per year.
Nestled in the hills of southern Ethiopia lies a resource that could catapult this nation forward: coffee.Skip to next paragraph
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Connoisseurs worldwide savor the beans from Yirgacheffe for their distinctive flavor. And at a time when more consumers are targeting specialty brews, Ethiopia is poised to reap the rewards of a product that commands $10 per pound in the United States.
But while upscale consumers are willing to pay top dollar for the beans, farmers in Ethiopia sell their product for a pittance – less than $1 per pound. "It's like growers of Dom Perignon Champagne getting the same price as growers of bulk wine," says Ron Layton, founder and chief executive of Light Years, IP, a Washington-based group that helps producers in poor countries get better prices.
But Ethiopia recently shook up the industry with a new tactic: trademarking its specialty coffees. Overcoming resistance to the idea from distributors – notably Starbucks – the country is hoping to empower its coffee industry to earn an estimated $88 million more per year, according to Oxfam America. The move could inspire producers of other commodities throughout Africa to harness branding and capture more value from the goods they sell to consumers in rich countries.
"It's quite innovative for a branding initiative to come out of the developing world," says Seth Petchers, the director of Oxfam America's coffee program. "It's about getting [farmers] to realize the value of what they have.
"It's a big deal," adds Mr. Petchers, noting that producers from other developing countries are already asking: " 'If Ethiopia can do it, why can't we?' "
Obtaining trademarks for coffee grown in Harar, Yirgacheffe, and Sidamo allows Ethiopia – the birthplace of coffee – to decide which distributors it will grant licenses to sell those specialty coffees, and under what terms. More control over distribution will boost Ethiopia's economy, which relies on coffee for more than 40 percent of its export earnings, according to Mr. Layton and others who specialize in intellectual property rights.
"I'm very certain that five to 10 years down the line, specialty coffee farmers will make much more than they make now," says Getachew Mengistie, the head of the Ethiopian Intellectual Property Office, the governmental group that spearheaded the trademarking initiative. "They could make 75 percent to 100 percent more."
Mr. Mengistie's office is organizing a move to educate farmers, small traders, and exporters of Ethiopia's specialty coffees about the licensing deals with international distributors so that they understand the potential to earn more and have a greater incentive to increase production and quality.
"With this initiative, a network of licensed distributors will sit down with producers and exporters and discuss common interests," Mengistie says. "This will benefit everyone in the coffee chain, from the farmer to the end distributors."
Expensive product, poor farmers
In lush hills of Yirgacheffe – one of the areas that stands to benefit the most from the licensing deals – farmers barely make enough to pay for essentials.