The findings of this study reveal a number of critical insights about the political economy of coffee in the Jimma–Ilu Aba Bora–Buno Bedele coffee belt. The coffee economy is shaped by a small number of influential actors, including state institutions, licensed traders, exporters and intermediary networks, who largely determine access to markets, pricing and value capture.
Summary
Coffee is a cornerstone of the Ethiopian economy, with the Oromia Region supplying a substantial share of national production. Although official government narratives emphasize the empowerment of smallholder coffee producers through institutional reforms, evidence suggests that these farmers do not capture a proportional share of the benefits and remain marginal relative to other actors in the coffee value chain.
Oromia strongly supports the vertical integration model (a marketing model in which producers export directly, without intermediaries), mainly due to concerns that the Ethiopian Commodity Exchange has undermined smallholder benefits. Improving smallholder livelihoods requires stronger cooperative support, better access to credit and markets, and the establishment of cooperative-based financing mechanisms.
Coffee cooperatives are currently constrained by internal governance weaknesses and interference by local authorities. These issues have limited their ability to defend member interests. To counter this, cooperatives need to enhance member awareness and strengthen their internal governance.
The high levy imposed on coffee traders ultimately diminishes the benefits received by smallholder farmers, as the additional costs are often transferred along the value chain. Thus, the Oromia regional government should adopt a more balanced levy policy that supports both the competitiveness of coffee traders and the income-generating capacity of smallholder coffee producers.
Coffee smuggling is widespread both domestically and across borders. Large volumes move from Jimma to Welkite, Silte and Addis Ababa. The smuggling involves a range of actors, including licensed traders, transport operators and local administrative officials (security forces, police and customs officials). Addressing this issue requires stronger coordination and collective action among all relevant stakeholders.
The Jimma coffee sector shows signs of labour exploitation, including the use of school children by private companies in Limmu Kossa district. Education authorities, parent committees, human rights institutions and justice bodies should work to eliminate this practice.
Coordination among coffee sector actors in the belt remains weak. Strengthening collaboration is essential to improve the value chain and meet emerging requirements such as the European Union Deforestation Regulation.
The debate between Kaffa and Jimma over the origin of coffee is driven by economic interests, heritage recognition and branding benefits, including potential UNESCO recognition. The Ethiopian Tea and Coffee Authority and the Ethiopian Heritage Authority should work to resolve these competing claims.
The Ethiopia Peace Research Facility
This report was written for the Ethiopia Peace Research Facility (PRF) as part of its Knowledge for Peace (K4P) series on the political economy of coffee in Ethiopia; Dereje Feyissa served as research advisor for this series. The PRF is an independent facility combining timely analysis on peace and conflict from Ethiopian experts with support for conflict-sensitive programming in the country. It is managed by the Rift Valley Institute (RVI) and funded by the UK government.
