INVESTING IN TREES AND LANDSCAPE ... - PROFOR

BOX 3.6. FARM AFRICA AS AN INTERMEDIARY IN THE DEVELOPMENT OF WILD COFFEE
EXPORTS FROM ETHIOPIA
Coffee has its origins in the mountains of Ethiopia, but local rights-holders have not captured the full
value of this product, which helps maintain a substantial belt of rainforest in the Bale Mountain region.
As part of the Forest Connect alliance to support small forest enterprises, an intermediary (Farm Africa)
set out to improve coffee quality and thereby increase prices; establish a functional value chain among
community producers, emergent forest cooperatives, the newly privatized Oromia Forest and Wildlife
Enterprise (OFWE), and international markets; and develop a speciality brand, Balewild.
The intervention consisted of several overlapping activities. Farm Africa organized capacity building for
coffee farmers (training in quality improvements and providing coffee technology support). It brokered a
business partnership between the newly established forest cooperatives and OFWE and encouraged OFWE
to pay a premium price for coffee (conditional on quality improvements). Finally, it made the link between
OFWE and an Italian coffee importer, Sandalj Trading Spa.
The effect two years into the program has been increased revenue generation for both forest cooperatives
and OFWE, which has translated into real livelihood improvements for coffee farmers. In addition, coffee
farmers have become aware of the value of coffee quality improvement. Both business partners have
come to appreciate the mutual value in a strong business partnership with links to overseas markets.
Farm Africa is working (within a carefully planned exit strategy) to strengthen the capacity of OFWE to
identify overseas markets and the ability of local forest cooperatives to federate and strengthen their
supply base to OFWE.
(and the professionalism required to secure it) and the scale and capacity at which SMEs operate.
Hard investors look for investible value propositions and are unlikely to shoulder the transaction costs
of developing investment preparedness among actors in forested landscapes, so it is incumbent on
soft investors to step in.
Soft investors need to precede hard investors to ensure that the preparatory work is done that will
enhance the likelihood of a successful negotiation and implementation. Soft investors can provide
financial support for the following activities:
• Any necessary process of mapping, campaigning for, delimiting, or registering commercial forest
rights.
• The facilitated organization of business entities, as well as associations and federations among
entities.
• The creation of institutional hubs that facilitate market system development and small enterprise
support.
Soft investors should also be prepared to hold the golden share and arbitrate between investor and
rights-holders (and perhaps also government).
94 INVESTING IN TREES AND LANDSCAPE RESTORATION IN AFRICA