We were lucky to get a chance to bring Asnake Nigat of Kata Muduga Cooperative Union in Agaro, Ethiopia into the Foxhole for a conversation about current events in Ethiopia, the upcoming season, and Agaro history, in which Asnake has played an instrumental role. For more background on Agaro history and the role Kata Muduga has played, click here.
Aleco: Hello everyone, welcome to the Foxhole. I am here with a very special guest this week, Asnake Nigat from Kata Muduga. Asnake is out in the field in Agaro right now. Asnake, welcome, we are very happy to have you. How are you?
Asnake: I’m good Aleco, welcome. Thank you very much for introducing us to this audience of buyers.
Aleco: Ah, yes, very happy to do so. It’s been a long time since I personally started buying your coffee and Red Fox has been buying your coffee since the beginning of the business, almost 7 years ago. Can you tell us a little bit how you got started in coffee in Agaro? I know you were a very important person at Technoserve in the original days of the project.
Asnake: Yes, as you know, some of the cooperatives in Agaro started in 2000. In 2009 Technoserve started, so most of the cooperatives joined in 2010. At the beginning, the coffee in this area was not well known.
The majority of the coffee was prepared as a Jimma 5, very poor quality coffee, so the farmers were selling this coffee to local traders. Local traders help, but they don’t worry about the quality, they don’t worry about the preparation, they collect the coffee as usual whereas Technoserve started dividing the coffee based on quality. They also advised the farmers to organize the cooperatives and trained them how to do the business. They trained the farmers to do the business preparation, to use new wet mill technology to process the coffees. They facilitated loans to cooperatives and training. Quality training, processing training, how to process the coffees, how to wash the coffees, how to dry the coffees. So, because of this, most of the cooperatives started with very small numbers. For example, in Duromina when they started at the time, it was almost 75 individual members.
Aleco: Oh, wow!
Asnake: In Duromina, in 2010, they only had one machine with a capacity of 1500kg per hour. Nano Challa started with 123 members and a very small machine, only 500kg per hour. Along with frequent training, Technoserve assigned business advisors to each and every cooperative. Such business advisors trained farmers how to follow up, process on their own, record-keeping, and cash management. These were very important changes for Agaro’s coffee. Now Duromina is very well known, now has three big-weight machines, so everywhere the volume is increasing.
The dividend that Kata Muduga received from producers (they get 90% and pay the union 10%) at the beginning was almost 200,000 per dividend, but now Duromina, last year, for example, paid the dividend to five million birr. It’s a very huge amount. This year Nano Challa paid a dividend at six million birr. Nano Challa now has two big washing stations. Their members increased from 123 to 740 members. It is a big increment, and this coffee is now well known in the world. It is changing the farmers, how they produce the coffee, how they pick the harvest, so completely that even Jimma 5 (which used to be low-grade) is now very good, high-specialty coffee. The whole starting point to us doing exemplary in these areas was the Technoserve project
Aleco: Yeah, amazing how the value was changed almost overnight, in almost one season, right? For the Jimma 5 to now, the Grade 1 and Grade 2 coffees.
Aleco: Okay. So eventually, after a handful of years of Technoserve, you formed Kata Muduga Cooperative Union with Efrem and others to manage the cooperatives in the area, correct?
Asnake: Yes, exactly
Aleco: What led you to make that decision?
Asnake: You know, just previously the cooperatives were supplying their coffees to Duromina Coffee Farmers Union in Addis, but there were ups and downs. There were problems because the buyers were commenting differently, creating an obstacle to source Duromina coffees, to source Nano Challa and Yukro coffees. There were some problems and bureaucracy, so because of this, because of considering the different buyers’ comments and also that these areas are each special, Goma and Gera are unique coffees. The areas were good so we thought, why don’t we form one union to export this unique coffee to the buyers in order to be fast, reliable and on time to deliver these coffees?
This is one reason, the second one is the system. Kata Muduga works on commission, which means that 90% of the price goes directly to the cooperative, so this makes it different from the other unions. This other union is buying Nano Challa coffee, sold to the buyer but at the Ethiopia Coffee Exchange price, so this union doesn’t like the commission system we use at Kata Muduga. Because the majority of the sale, 90% of the sale doesn’t go to the cooperative, it goes to the union level. In the Kolla Bolcha case, the peak, 90% of the price goes to the cooperative, the cooperative distributes dividends to the members. That is the system because, in this case, the cooperative is made of coffee farmers and we want to maximize the benefit they get from their work.
Aleco: Yeah, and it is really tremendous what you’ve accomplished in terms of getting the best value back to the farmer. What year did you start Kata Muduga and how many cooperatives were members of the union at that point?
Asnake: We started the union in August 2016, almost 4 years ago. At that time we had 19 cooperative members. The volume was very limited. At the second year 2017, that 19 raised to 26, at the third year raised to 30, this year during the fourth year, double the original. Now we have 39 member cooperatives at Kata Muduga.
Aleco: 39, that is really great, yes, amazing. Amazing growth, so you are seeing producers from the greater Agaro area wanting to become members and you are building more washing stations. It seems almost every year, no?
Asnake: The washing stations are increasing.
Aleco: Will there be new stations for the coming harvest?
Asnake: This year, we have one new cooperative, Racha, which is very close to Yukro. In Racha there was some problem with the quality last year. This year they are at full capacity with good quality coffee. There’s another new one in Gomma, a very good cooperative called Gerba. Did you taste this coffee?
Aleco: I don’t think so.
Asnake: Yes, Gerba is a new cooperative that is very good quality coffee adjacent to Kolla Bolcha, very good. It’s a newly developed cooperative, a very unique coffee, very high land. We will try to supply these coffees in the next harvest.
Aleco: Oh great, I look forward to chatting about that more. I can’t wait to taste that one. I’m curious about the coming harvest, but it’s really impossible to talk with anyone about their
coffee harvest coming up without talking a little bit about the coronavirus. How has the virus affected Agaro and the coffee farmers and even yourself in the area out there?
Asnake: Coronavirus? Still, now in this area definitely. But, generally in Ethiopia, especially in our areas, there are not serious cases happening now. There are serious cases in Addis, our capital. The majority of coronavirus cases are recorded in Addis, but not serious issues in this area. I don’t know.
Aleco: Okay, so maybe people are isolated and stayed safe, I’m guessing, is it true?
Asnake: Yes, in Addis, people are isolated. This disease is most common in the Addis capital city, not around in Agaro or Gera and Jimma areas.
Aleco: Do you think that there will be an effect on the harvest that’s coming up or will people be able to work as normal?
Asnake: We will see on that, we will see during November. Currently it is not serious enough to affect the daily activities of the coffee harvest. Now, people are working and preparing drying beds, getting the loans they need for the season, everything’s now in preparation and it’s going well. But maybe we’ll see on that in November. Some Ethiopian health ministers expect in November to maybe see an increase of the number of the affected people.
Aleco: Okay, well you, Efrem, Eden, everyone at the cooperatives and the producers have been in our thoughts, so I’m glad things are okay so far, we hope that everyone can be safe. Going forward and into the harvest and beyond of course as well. How is the harvest looking for the coming season? Is it going to be smaller and larger?
Asnake: Not smaller, not larger, it is almost medium, almost the same as last years, because you know, coffee by nature is biennial. In some parts we expect high volumes this year and in some parts, lower. So it’s not such a big fluctuation in our areas. It’s consistent, sustainable production.
Aleco: It’s great to have a lot of reliable volumes for the producers to count on. When will the harvest begin this season and when will it end? Roughly.
Asnake: There are two starting times. In a little bit, in areas which are very low. Areas in the union, for example around Agaro, will start in the middle of October. Some cooperatives start after. The other cooperatives in Duromina, in Biftu, in Yukro starting at the end of October and beginning of November. The majority of the cooperative is the beginning of November and the end of November is peak time. So, the end of the harvest is the beginning of January.
Aleco: Okay, so normal season here. That’s good to know. Thank you. What, if any, adjustments do you have to make during the harvest season because of the virus?
Asnake: There is some change. We’ll have to take special care, like masks, sanitization, and also not gathering workers in one area. Distributing people in every bed so there aren’t too many people when sealing the coffees, and washing the coffees so we’re limiting the numbers in a single bed. And also collecting water, so those are some adjustments that will happen in the next harvest.
Aleco: That makes sense. Do you have any questions for me, Asnake?
Asnake: No questions, just that I see all your marketing and I say thank you very much Aleco, you are doing a great job to introduce and market these coffees. I know you from 10 years ago, you know these areas. Your buyers’ support, it promotes this area’s coffee. I always tell the leaders of Nano Challa and Duromina, Aleco is a genuine buyer. Almost 10 years and above; you are introducing this area of coffees to buyers so this is very great support for the cooperative. Also, you are supporting the coffee farmers in this area, so I say thank you in the name of the cooperative and the union. You are always reliable. We trust you to trust these coffees and to continue sourcing them and advertise more to buyers. I see you, your website, and Red Fox, always writing about this area’s coffee. I say, thank you very much, you did a good job on this site Aleco.
Aleco: Thank you very much Asnake, to be considered reliable is good.
Asnake: When do you plan to visit by next harvest?
Aleco: As always, I’m hoping there’s a way for me to come and work the same way that we always work, and to make decisions very quickly for you and to get coffee moving, yeah, so you’ll hear from me again I’m sure a few times before the end of the year and then we’ll plan for that. But yes, my plan is to come.
Asnake: In January?
Aleco: Yes, yes.
Asnake: January is a good time. Most of the coffees are moving at that time. The majorities we move a lot by loads. Most in December, starting from December, the middle of December, we move the coffees by loads. So January is a good time to cup that coffee. We will meet then.
Aleco: Perfect, my fingers are crossed to work business as usual again, Asnake and thank you for the kind words. You make it easy to work with you. To work with you and Efrem, and people who are so reliable and honorable. It is really honestly a pleasure for us and to continue to support the farmers in the way that we have and that I have for a decade now. It feels special to continue the relationship and thank you for the comment on reliability, that’s all we really hope we can be, so really, thank you.
Asnake: Thank you, thank you. I hope, I wish great success for you and your company, Red Fox. We will continue to work together, thank you very much Aleco.