Sidama Land - Coffee Economics, Politics and Poverty
Side Goodo
Part 1. Poverty, Hunger and Underdevelopment in Africa
Over the last two centuries many countries of the world have developed at a
breakneck speed. However, after half a century of decolonization, Africa still
remains the darkest continent and the majority of its people still live under
abject poverty.
Half of the 800 million people on the African continent live on less than US$1
per day while the mortality rate of children under five years of age is 140 per
1000. Only 58 percent of the population had access to safe water. The rate of
illiteracy for people over 15 is 41 percent and there are only 18 mainline
telephones per 1000 people compared with 146 for the world and 567 for developed
countries (NEPAD, 2001).
Thus, in Africa, at present, poverty defined in terms of both lack of ownership
of economic resources and lack of access to social and economic services which
refer to the broader livelihoods is rampant. Poverty is also about lack of
power. The poor is the most vulnerable and the most powerless group of society.
Among the 49 Least Developed Countries (LDC) of the world as of 2007, 33 are in
Africa. These are: Angola, Benin, Burkina Faso, Burundi, Central African
Republic, Chad, Congo Democratic Republic, Djibouti, Eritrea, ‘Ethiopia’,
Gambia, Guinea, Guinea Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali,
Mauritania, Mozambique, Niger, Rwanda, Sao Tome & Principe, Senegal, Sierra
Leone, Solomon Islands, Somalia, Sudan, Tanzania, Togo, Uganda and Zambia.
The LDCs or the fourth world countries are characterized by low income, Gross
National Income (GNI) per capita of less than US$750, low level of human
resources development, and economic vulnerability. A country must achieve GNI
per capital of over US$ 900 to leave the forth world. About five of these
African LDCs are characterized by a very low level of economic progress measured
by a very low level of GNI per capita of less than US$ 200. These are:
‘Ethiopia’, Somalia, Seira Leon, Burundi, and Guinea Bissau.
Only two countries in Africa have shown remarkable economic performances during
the past 20 years and were able to graduate from the LDC category. These were
Botswana which moved up the ladder in 1994 and Cape Verde Island which graduated
from LDCs just in 2007.
The poverty and backwardness of Africa stands in stark contrast to the
prosperity of the developed world. The continued marginalization of Africa from
the globalization process and the social exclusion of the vast majority of its
peoples constitute a serious threat to global stability (NEPAD, 2001). The
continued influx of Africans seeking better living conditions in Europe has
already caused a great alarm among the EU member states but no concrete actions
have been taken by this block of wealthy nations to bring sustainable
development in the African continent.
The UN Millennium Development Goals (MDGs) adopted in 2000 are not likely to be
achieved in many of the African countries because of such dismal economic
performances in most of these countries. The 2015 targets for most indicators
are already accepted as unachievable. Thus many of African countries are trapped
in a vicious circle of underdevelopment, poverty, hunger and famine. The world
has the resources and the technology to eradicate poverty in Africa and
globally, but it does not have the will.
Part 2. Poverty and Underdevelopment in ‘Ethiopia’
The dismal economic performance of ‘Ethiopia’ with GNI per capita of about
US$152 in 2005 puts the country at the bottom of the Least Developed Countries
of the world (the fourth world). As a result, poverty in ‘Ethiopia’ is rampant.
According to BBC World Service (Feb 2007), 81% of ‘Ethiopian’ population is
living below the poverty line of US $2 a day. With the ‘Ethiopian’ current
population being about 78 million, this means that over 63 million ‘Ethiopians’
live below poverty line.
At the beginning of the 21st century, we witness an increase in global poverty
and hunger along side unprecedented affluence among nations and individuals
implying an ever increasing disparity between nations and with in various
regions of a nation. The fact that the Microsoft tycoon Bill Gate’s net worth is
5 times as big as ‘Ethiopian’ 2005 annual Gross National Income (GNI) of $11.1
billion US dollars at current prices (World Bank, 2005) is a vivid depiction of
not only how the country has failed in terms of economic achievement during the
past century but also the alarming disparity between individuals and countries
in the developed world and individuals and countries in the LDCs.
The rest of the African countries blame colonialism for their underdevelopment.
However, ‘Ethiopia’ has been praised as the only African country that resisted
western colonialism. Then why is ‘Ethiopia’ at the bottom of the fourth world?
‘Ethiopia’ has no one to blame for its unprecedented development disaster except
for successive archaic feudal and totalitarian political leaderships.
Archaic monarchical rule and rapacious feudalism that lasted for over half a
century kept the country under perpetual darkness while the rest of the world
was moving forward with lightening speed. Neither the 1974 revolution nor the
1991 TPLF take over of the political power in the country brought any
fundamental changes on political organizations and economic management in the
country. The socialist regime wasted 17 years of opportunity for economic
revival of the country. Like its predecessors, the current regime managed to
cling to political power for over 16 years with out any improvement in economic
lives of the majority of the peoples in the country. In fact poverty, hunger and
famine are now embodied into the very structure of the ‘Ethiopian’ economy.
A decade and a half is not a short time to harness the resources of the country
towards the path of sustainable growth and development. On the contrary, the
current leadership is preoccupied with maintaining its political power at the
cost of economic nightmare. Time and resources are wasted on repressions of
democratic freedom and human rights.
Dictatorial and predatory regimes, lack of democratic freedom and human
rights, lack of recognition of the rights of various ethnic groups in the
country, inappropriate value systems of the societies’ of the ruling elites,
absence of the rule of law, absence of property rights and institutions that
support free enterprise under the current and previous ‘Ethiopian’ regimes are
solely responsible for continued underdevelopment and abject poverty of the
majority of the citizens of this country.
The Sidama province located in the southern part of the country is endowed with
abundant natural resources. However, under the current ‘Ethiopian’ political
organization, the Sidama region has deteriorated from self sustained traditional
economic system into an economic disaster where hunger and famine have become
the order of the day.
Part 3. Poverty in Sidama Region
The Sidama region with estimated total population of 5 million which makes
Sidama the 5th largest ethnic group in ‘Ethiopia’ after Oromo, Amhara, Ogaden
and Tigray, is one of the least developed regions in the country already at the
bottom of the fourth world.
Only about 8% of the inhabitants of Sidama have access to electricity. The
average rural household has only 0.3 hectare of land (compared to the national
average of 1.01 hectare of land) and the equivalent of 0.5 heads of livestock.
Most cattle in Sidama particularly in the low lands died due to tsetse fly
infestations in the early 1980s.
Only 15.4% of the population is in non-farm related jobs, compared to the
national average of 25% and a southern average of 32%. Primary school enrollment
has improved since recently to reach about 68% of all eligible children while
enrollment in secondary school is one of the lowest (18%).
These figures are inflated because of highly deflated population figure for
Sidama of 3 million. Continued changes in climatic conditions due to global
warming increased land areas in Sidama exposed to malaria to about 72% (World
Bank, Country Memorandum, 2004).
All indictors reflect the glaring poverty in Sidama region. Sidama is
predominantly rural society. 91 % of the total pupation in Sidama lives in rural
areas. Thus it is primarily the peasant farmers who languish in poverty in the
Sidama region. Fragmented land holdings, less than 0.3 hectares per household,
coupled with very high population density of over 430 persons per sq km, implies
a huge reservoirs of redundant labour force that needs to be employed out side
of the subsistence farming. And yet the proportion of the total population
engaged in non-farm related jobs in the Sidama region is only about 15%.
Sidama is endowed with various natural resources. Rivers such as Ganale that
form Wabeshebelle river in Somalia originates in Sidama high lands of Harbagona.
Lakes Awassa in the northwest, and Abaya in the south west, offer great tourism
potentials for the region.
On top of all these, Sidama is endowed with the resources that make the Sidama
name a global household name- that is, its black gold- coffee. Sidama produces
abundant high quality organic (speciality) Sidama (Sidamo is a bastardised name
given by the Amhara rulers) coffee that fetches the highest international retail
prices for food chain multinationals such as Starbucks.
Part 4. Sidama: Coffee and Poverty
Coffee, believed to have been discovered a 1000 years ago by a Kaffa goatherd,
in the Kaffa region of the country, is one of the most important cash crops in
the Sidama region. In the year 2005, Sidama and Gedeo alone produced over 63,562
tons of coffee (Central Statistical Agency, 2005). This is 1/3 of the total
coffee output for the country during the year.
Sidama is very well known for its production of garden coffee. Speciality Coffee
is grown in many villages. Sidama has ideal soil type and climatic
conditions-including altitude, rainfall and temperature for the production of
Arabica coffee. Coffee is predominantly produced in villages organized in 39
primary coffee cooperatives in Shabadino, Dalle, Aleta Wondo, Darra and Bansa
districts.
However, almost every household in rural Sidama outside of extremely hot
lowlands of Awassa, Shabadino and Dalle and very cold highlands of Hula and
Harbagona produces coffee. Over half of the total population in Sidama directly
or indirectly depend on coffee for livelihoods.
Over 60% coffee produced in Sidama region is washed coffee and ready for export
while half of the country’s coffee output of about 200,000 tones is consumed
domestically. There are over 89 coffee washing stations in Sidama alone. Thus,
over 40% of washed coffee destined to the export market comes directly from the
Sidama region.
Coffee is the single most important export commodity for ‘Ethiopia’ providing
about 65% of the country’s foreign exchange earnings. ‘Ethiopian’ coffee exports
currently account for about $400 million in export income. More than 20 million
people in the country (about 25% of the population) derive their livelihoods
from the coffee sector. Coffee contributes over 10% of the ‘Ethiopian’ GDP.
Coffee is the most important agricultural commodity in the world, and is worth
up to $14 billion annually. In fact coffee is the second most widely traded
commodity in the world next to petroleum. More than 80 countries, including
‘Ethiopia’, cultivate coffee, which is exported as the raw, roasted or soluble
product to more than 165 countries worldwide. More than 121 countries export and
/or re-export coffee. More than 50 developing countries, 25 of them in Africa,
depend on coffee as an export, with 17 countries earning 25 per cent of their
foreign exchange from coffee.
Coffee classification and grading systems in ‘Ethiopia’ were developed and
licensed for the first time in 1952 and then modified in 1955. ‘Ethiopian’
coffee certification began after the establishment of the National Coffee Board
of ‘Ethiopia’ in 1957. Licensed and graded coffee export from Ethiopia has the
history of over half a century.
However, half a century of progressive coffee export did not at all translate to
poverty reduction and increased access to livelihoods in Sidama. Instead, as
specialty coffee production, processing and exports increased from Sidama,
poverty, hunger and famine also increased. This is a symptom of fundamental
economic and political problems in the country.
Why did massive high quality coffee production fail to reduce poverty in the
Sidama region and in other coffee producing regions in ‘Ethiopia’? There are
various factors that explain why coffee failed to contribute to poverty
alleviation in these regions and in Sidama in particular.
Among others these include
a) inimical macroeconomic policies,
b) systematic exploitation of producers by parastatals,
c) unfair allocation of retail returns, and
d) international price volatility.
I will deal with each of these in the following sections.
a) Inimical macroeconomic policies
Successive dictatorial regimes in the country followed inimical macroeconomic
policies. One of such policies is the exchange rate policy. ‘Ethiopia’ followed
fixed exchange regime during both the feudal and socialist regimes. The national
currency, birr, was exchanged for highly overvalued rate of about 2 birr for 1
US dollar for over two decades. Both economic theory and practice shows that
currency overvaluation has serious negative effects on the export performance
and export earnings.
Since coffee is the country’s major export, currency over valuation has the most
undesired effects on the coffee export performance and earnings in the country.
Thus, prolonged currency overvaluation in the country during both the feudal and
socialist regimes meant that coffee producers were denied of most of their
coffee incomes.
Since the government was the primary exporter during these periods, it was able
to artificially set the farm gate prices at a very low level so that it retains
most of the returns generated from the coffee export.
Thus, the peasant farmers continued to earn negligent income from their coffee
produces. This perpetuated rural poverty and under development in major coffee
producing regions such as Sidama.
However, the macroeconomics alone does not explain why coffee failed to
alleviate poverty in Sidama. Systematic exploitation of coffee farmers through
parastatals was another reason why the benefit of coffee could not trickle down
to the legitimate producers. I will review this in the next section.
Note
Pucture: Around the shores of Lake Awassa
Soure:
American Chronicle
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