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Technoserve’s East African connection

From the February 2017 issue.

American nonprofit Technoserve is working to connect some of East Africa’s remotest, and most remarkable, coffee regions to the world market.

Coffee farmers

In the fevered imaginings of any adventurous coffee prospector, there will always be a jewel out there somewhere in the remote wilds. Beyond a bend in the river, among the great unwashed beans, there must be another undiscovered masterpiece of coffee.

Agaro was one of these miraculous discoveries in Ethiopia’s rust-colored Jimma highlands in rural Oromia, at the end of a road that locals liked to say “was deeper than it was long”.

It was here that the team from venerable US nonprofit Technoserve struck coffee gold in a region whose modern reputation for providing the dregs of coffee production was at odds with its 8th-century heritage as one of the original coffee lands. In fact, beans from the area were so poorly thought of that they were known as Jimma 5, because they had all five problems associated with poor farming, including cracked beans, overripe “foxie” beans, unripened “quakers” as well those chewed by insects. Jimma 5 became a byword among buyers in Ethiopia for bad coffee.

It took someone from Technoserve wading across a river to talk to coffee growers on the other side to realise just how wrong the conventional wisdom was in Agaro.
They found a village of coffee farmers who would get caught out every year when the river swelled and became hard to cross just as the coffee bushes ripened. Savvy traders would lure them across with promises of good prices that would evaporate when they got there.

Facing an arduous return crossing, the farmers preferred to sell for a pittance than return empty-handed. What they needed was a loan to pay for a wet mill to wash the coffee fruit down to the bean, and a bridge to give them a reliable, year-round connection to nearby markets.

Assistance from Technoserve to secure loans from commercial lenders achieved both of these outcomes. Today there is a coffee cooperative known to specialty traders, such as US specialty sourcer Red Fox Coffee Merchants as the “crown jewel of the west.”

The Duromina cooperative that the farmers formed, which means “to improve their lives”, has been able to sell its fully washed coffee to the market directly.

Technoserve’s Global Coffee Director, Paul Stewart, talks in an awed tone about the coffee from Duramina.

“What we discovered was some of the most incredible flavour profiles you can find anywhere in the world,” he tells GCR.

In 2012, an international panel of professional judges would select Duromina’s coffee as the best in Africa, awarding the cooperative the top prize in the leading regional cupping competition.

“The very best lots from Agaro have such a saturated combination of cane sugar sweetness and meyer lemon-white grape that they used to remind us of drinking limonada con panela in Colombia,” was the verdict of a buyer from Red Fox.

In terms of flavour, success and long-term impact, Duramina is an outlier but Stewart believes that at least some of its success can be replicated among the 5 million smallholder coffee farmers in the rest of East Africa. The same mixture of commercial neglect and ideal climatic conditions can be found everywhere from established coffee countries such as Ethiopia and Kenya, to Burundi and South Sudan.

Coffee farmer

The Technoserve playbook starts with agronomy. Farmers harvest coffee cherries, the fruit containing the coffee beans. But if they want to get better prices they need a cooperative to sell the coffee cherries.

The next step is for cooperative-owned wet mills to process the coffee cherries, stripping away the pulp and leaving behind the coffee and an inner skin – known as parchment.
But this needs loans as the baseline for a wet mill is US$15,000. That still leaves the co-ops in need of marketing services and, in many cases, help to hull the parchment coffee, yielding the green coffee.

The final step, assuming the marketers have done their job, is for firms from around the world to purchase the green coffee and roast it, producing the coffee that consumers see in stores and cafes.

A 16-year veteran at Technoserve, Stewart took the lead in the global coffee portfolio in September 2016 after pioneering a low-cost wet mill business plan which has been replicated all over East Africa, and building projects worth $7 million involving more than a quarter of a million coffee farmers.

“There are opportunities all over the region,” he says.

The vast majority of the region’s coffee producers are smallholders and the reasons that most of these farmers live in poverty are three-fold: small farms inevitably mean a small number of trees and therefore limited production, the coffee bushes they do have yield relatively few coffee cherries, and even those that they do produce command generally low prices dictated by the commodity market for Arabica and Robusta beans, which is unpredictable.

None of this is fixed or inevitable, Stewart argues.

While increasing farm size may not be an option – and in any case the amount of land under cultivation for coffee is already significant – productivity can be increased.
Fairly simple improvements such as adapting farming methods to better match the climate do not necessarily require huge investment.

“When I speak to smallholder farmers I hear the same things over and over. Coffee is the most profitable crop that they can grow. So when you compare investment in coffee to almost any other sector the economic returns from doubling profit on coffee production are much, much larger,” Stewart says.

“Everywhere you go in the region, the people you meet in the business sector are people whose education has been paid for with income from coffee.”

Meanwhile, the growing conditions in the region are well suited for the production of high-quality coffee, which can be marketed as specialty coffee – coffees that score over 80 on the Specialty Coffee Association of America’s 100-point scale.

Improved processing and sales channels would enable farmers to benefit from the higher and more consistent prices offered by the growing specialty market.

Stewart explains the increasing importance of connecting smallholders to the specialty coffee industry: “I believe coffee’s role in expanding the economy can continue. And specialty coffee is a great opportunity not just to boost foreign currency earnings but to build brands across East Africa – already Ethiopia, Kenya and Tanzania are known for great coffee.”

As the Vice President of Coffee for Intelligentsia, the Chicago-based roaster and retailer, Geoff Watts is one of the intrepid green coffee buyers who have bought into Technoserve’s work.

“Entire coffee regions in East Africa that were largely ignored by specialty buyers prior to interventions by organisations such as Technoserve have now become highly sought-after sources of spectacular quality.”

Echoing Stewart’s explanation as to why there are still hidden gems, Watts says there is likely to be more to come.

“The potential had been there all along, but was unrealised because some basic infrastructure was lacking and farmers did not have good access to knowledge or training. The coffees were mediocre at best, without much value. Today, these farmers are producing some of the world’s most exciting and delicious coffees and have successfully connected with the specialty marketplace,” Watts says.

Paul Stewart

Short for “technology in the service of mankind”, Technoserve was founded in 1968 by American businessman Ed Bullard.

After a trip to Ghana, Bullard got to thinking about the difference between his life and those of the impoverished people he had met in West Africa. His conclusion was that they were struggling because they lacked the knowledge, skills and tools needed to lift themselves out of poverty.

The best bet for a solution to this seemed to Bullard a business one. His pioneering approach was to link people to information, capital and markets.

The organisation works with partners, such as USAID and big companies such as Starbucks and Nespresso, to provide resources to those who want to build a better life.

With its slogan “business solutions to poverty”, Bullard’s venture is now a nonprofit organisation based in Washington DC and operating in 29 countries. It works with people in the developing world to build competitive farms, businesses and industries. Its self-declared focus is on harnessing the power of the private sector to help people lift themselves out of poverty.

The coffee sector has taken on increasing importance for the non-profit, with Paul Stewart one of their leads on innovation.

The Queens University of Belfast alumnus has a proven track record in East Africa to back up his ambitious talk.

Stewart took the global helm of Technoserve after successfully wrapping up the Coffee Initiative, an eight-year program across Ethiopia, Kenya, Rwanda and Tanzania. It was launched in 2008 with a grant to Technoserve of $47 million from the Bill & Melinda Gates Foundation and followed up with another $18 million in 2012.

In its final report on the initiative the NGO found that the 268,000 farmers who took part increased their incomes by an average of more than a quarter.

While the largest number of smallholder beneficiaries were in Ethiopia where more than 100,000 took part, its nearly 33,000 farmers in Rwanda saw gains of 62 per cent over period of the project.

In the case of Rwanda, increases in coffee income are not just paying for education but for the basic means of survival, as Bart Minten from the International Food Policy Research Institute explains.

“One cannot underestimate the role that coffee plays for food security of a large number of smallholder farmers in East Africa.

“Coffee is an important source of income for these coffee farmers, especially when food security issues are most severe.”

In Rwanda, Technoserve was able to boost production by 38 per cent within one year of getting involved with farmers. This production boost along with 34 new wet mills led to near to two-thirds’ increase in earnings.

“That income often also allows for access to agricultural inputs during the planting period of food crops, leading to significant positive spillover effects of coffee for the whole farm, and leading to further improvements of these smallholders’ food security situation,” says Minten.

Moving forward, Stewart says the coffee plan for Technoserve is to build on an increasing number of private sector partnerships, similar to that with Nespresso which aims to double the amount of coffee the Swiss-based multinational sources from the region to 10,000 tonnes by 2020.

“The private sector is concerned about its future supply. It’s a matter of considerable importance to them to be able to source coffee from these areas [in East Africa].”

The determination to open up neglected areas saw Technoserve persevere in South Sudan despite the new nation’s troubled start to life since gaining its independence in 2010. 

Operations eventually had to be suspended in the rural southwest after the civil war of the past three years reached the coffee areas but Technoserve has only reluctantly pulled out and is keeping in touch with farmers with a view to returning as soon as it’s safe. Its two biggest donors, USAID and the Dutch Sustainable Trade Initiative (IDH), often match funds to commercial partners and, Stewart says, they acknowledge that the private sector is better at identifying opportunities.

Stewart and his Technoserve team are now awaiting the results of an independent report on the longer term impact of their work with African coffee farmers, due in Spring 2017.

Researchers revisited the farmers and co-ops that Technoserve worked with five years on from the original projects.

“They have looked at what happened next and will help us to answer the most important question,” Stewart says. “Was it sustainable?” GCR

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