Coffee School - Kenyan Case Study

Today coffee remains one of the most important sources of income for the East African nations of Uganda, Ethiopia, Kenya, and Tanzania. Ethiopia, Africa's largest coffee exporter and the birthplace of coffee, has been hard hit by the recent price slump. In Kenya AGRODEV has revealed that coffee was the number one export for the country but now it is fourth earning only 5 billion KSH per year, the number one export receives 40billion KSH per year (Tea). Coffee production has dropped by 50% over the last ten years. Area under harvest has grown by 17% yet yields have dropped. Kenya produced a peak of 128,941.00 tons of coffee in the 1982/1983 growing season. The 2005/2006 season is projected to yield 55,000.00 tons.

So why is this occurring? All green coffee for export must be sold at the Kenyan Coffee Board's auction house; this coffee is sorted and bulked out. Because of this farmers must wait 9-12 months before they receive complete payment from their crop forcing them to borrow their own money and pay interest on it.