Oromia Coffee Farmers Cooperative Union facts for kids

The Oromia Coffee Farmers’ Cooperative Union (OCFCU) is a group of small coffee farmers in Ethiopia. It's like a big team where farmers own and run the business together. OCFCU is based in the Oromia region of Ethiopia. This area has special plants and a warm climate perfect for growing coffee beans.

OCFCU is a democratic business. This means its members, the farmers, make the decisions. It follows the rules of the International Cooperative Alliance and Fair trade. Fair trade helps farmers get a fair price for their products. OCFCU is very important in how coffee is sold in Ethiopia. The farmers who are part of OCFCU grow, process, and sell organic Arabica coffee to other countries.

History and Growth

Ethiopian regions and zones

Coffee was first found in the Oromia region. But a past government, called the Derg regime, made farmers sell their coffee only through certain places. This made it hard for the coffee business to grow. Farmers had little say in how their coffee was sold and often stayed poor.

In the 1990s, Tadesse Meskela became the first General Manager of OCFCU. He went to Japan to learn about how cooperatives work. He came back to Ethiopia with ideas for a new way of doing business. His idea was to create a democratic group that could sell coffee directly to buyers.

The OCFCU started on June 1, 1999. It began with 34 smaller cooperatives and about 22,000 members. They had about US$90,000 to start. Soon, Oromia became a major coffee area in Ethiopia. More than 65% of the land used for coffee growing was in this region.

The Union first trained farmers and government officials. They learned about how cooperatives should work. At first, they exported 72 metric tonnes of coffee, selling for US$130,000. By 2020, OCFCU had grown a lot! It had 405 cooperatives and over 400,000 members. Their capital (money they had) was over US$20 million. Exports also grew to 7,000 metric tonnes, selling for over $40 million.

Before, the Union helped farmers sell raw coffee beans to local roasters. But in 2018, OCFCU invested over US$1.5 million to build its own coffee roasting and packaging factory. This factory started working in February 2020. Its goal is to roast, grind, and package coffee for people in Ethiopia to use.

Goals and Purpose

Ethiopian coffee zones

OCFCU wants to see cooperative groups become strong engines of development. They hope this will help both rural and city areas grow and change for the better.

The main goal of the Union is to make selling coffee easier and cheaper. They do this by selling coffee directly. This means they skip the auctions and extra sellers like collectors or other exporters. By doing this, farmers get more profit. This extra money is given back to the farmers as dividends. This also helps solve the problem of farmers waiting a long time to get paid.

The Union has six main goals:

• Improving farmers’ incomes by selling their coffee directly.
• Making Ethiopian coffee better quality and growing more of it.
• Giving better services to member farmers and customers.
• Improving the lives of farmers.
• Making the local coffee industry last for a long time.
• Helping to keep the local coffee market stable.

How OCFCU is Managed

The Union has five main managers: a General Manager, a Deputy General Manager, and heads for Commercial, Financial, and Export Sales departments. There is also a big meeting called the General Assembly. This meeting includes one representative from each of the 405 cooperatives.

These annual meetings bring together top managers and the representatives. This is where they decide on and check the Union's plans. The plans approved at these meetings are then given to the Cooperative’s Boards to carry out. The board then tells the management what to do each day. The cooperative management reports to their board and the cooperative members. Most of these members are small farmers living in the Oromia region.

Types of Coffee

Oromia coffee ceremony

OCFCU sells six kinds of organic Arabica coffee beans. They offer both natural (un-washed) and washed coffee beans. Natural coffee is dried with the fruit still on the bean. Washed coffee has the fruit removed before drying. These coffee beans come from six areas in Oromia:

• Harar: Natural coffee. It has a medium to light sourness, a full body, and a strong mocha taste with blueberry hints.
• Jimma: Natural coffee. This coffee is well-balanced. It has medium sourness and body with a clear wine-like taste.
• Limmu: Washed coffee. It is well-balanced with medium sourness and body, and a clear wine-like taste.
• Nekemte: Natural and washed coffee. It has good sourness, a medium body, and a wild fruity finish.
• Sidamo: Natural and washed coffee. It has bright sourness, a medium body, and spicy and citrus flavors.
• Yirgacheffe: Natural and washed coffee. It has bright sourness, a medium body, and clear jasmine and lemon flavors.

Successes and Benefits for Members

Exports

OCFCU understood how important it was to sell coffee to other countries. They worked to connect small farmers directly with international coffee markets. By 2014, they were sending coffee to places like Australia, France, Germany, Japan, the United States, and more. In 2014, the Union was Ethiopia’s biggest exporter of organic coffee. It was also the second largest exporter of Fair trade coffee in the world.

Better Prices and Shared Profits

The coffee market often has more sellers (farmers) than buyers. This means buyers have a lot of power to set prices. Cooperatives like OCFCU help farmers by reducing costs and giving them more power to bargain. The Union has cut down on the number of middlemen between farmers and the export market. This means farmers get a much bigger share of the profit.

The Union has helped farmers get better prices for their coffee. They have also grown large, which helps them save money. They offer different coffee types, which also helps their business. Cooperatives also help reduce poverty in developing countries. They create jobs for many people. OCFCU gives 70% of its profits back to the cooperatives and their members as dividends. By 2014, they had paid $3 million in dividends to farmers. The Union now employs 2,000 people, both full-time and seasonal.

Awards and Certifications

The Union has won several awards. It is known as a top producer of Arabica coffee beans. In 2000, OCFCU coffee samples were rated among the best in the world. This happened at a conference for the Speciality Coffee Association of America. In 2012, OCFCU coffee was ranked first out of 250 different coffees in a competition.

OCFCU also has many important certifications. These include Fair trade, organic, UTZ, and Rainforest Alliance certified coffees. These certifications mean the coffee is grown in a way that is good for people and the planet. All 405 cooperatives within OCFCU follow Fair trade principles. The first cooperative got Fair trade certified in 2002. By 2020, 48 cooperatives were Fair trade certified.

Local Community Development

Ethiopian women traditionally roasting raw coffee beans

Besides helping farmers earn more money, the Union has also brought many social benefits to its members and local communities. They have improved roads, built storage places, bridges, clinics, and schools. OCFCU also helps members get banking and credit services. They offer training on coffee quality control, education, flour mills, and community clinics.

Here is a table showing some of the projects the Union has completed:

Challenges and Solutions

Farming and Environment

Coffee plants are greatly affected by changes in weather. As diseases and pests become more common and temperatures rise, it gets harder to grow coffee successfully. Some farming families have small plots of land and are more affected by climate changes.

For generations, Ethiopian coffee farming has been sustainable. Most coffee grows under shade trees, which is good for birds. In 2014, OCFCU started a project with a company in the Netherlands. Their goal was to stop farmers from using wood for cooking. This would help produce carbon-neutral coffee, meaning it doesn't add to climate change. Farmers get extra payments and special cooking stoves. These new stoves reduce carbon dioxide by up to 70% compared to open fires. The money from carbon credits helps communities deal with climate change effects.

Another concern for OCFCU farmers is that coffee trees get old. A coffee tree can take up to five years to grow enough to produce coffee. It takes a lot of work to get the tree ready and make a profit. If a crop is no longer profitable, it's hard to clear the land and plant new crops. In the past, there was more investment in growing new trees, but this has slowed down.

Changing Coffee Prices

Coffee prices can change a lot. This is a big risk for farmers. Coffee is the main way for many poor Ethiopian farmers to earn money. But because coffee is a commodity, its prices change more than other products. When world coffee production and prices change, it directly affects Ethiopian coffee prices and farmers' profits.

When coffee prices are low, many farmers don't earn enough money and can go hungry. Before, farmers would borrow money at high interest rates from private lenders. They did this before harvest (June to September) to live and improve their farms. But in 2005, the Union started its own financial services through the Cooperative Bank of Oromia. This bank gives loans to 70% of its members before harvest. This helps ensure their crops grow well.

See also

• Black Gold (film)
• Coffee production in Ethiopia
• Tadesse Meskela