DEVELOPMENT BANK OF ETHIOPIA

RESEARCH AND PROJECT DATA MANAGEMENT DIRECTORATE

RAW DATA AND INFORMATION ON

COFFEE PLANTATION AND PROCESSING

Prepared By:

Moges Tesfa Sr. RPDM Officer

ShambuTolosa Sr. Agricultural Engineer

SimachewAtinaf Jr. PDM Officer

Revised By:

Mesfin W/mariam Team Manager

Henock Tsegaye A/Technical Team Manager

APPROVED BY: RPDM APPROVAL TEAM MEMBERS

APRIL, 2019

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 Table of Contents
1. INTRODUCTION ....................................................................................................................1
1.1. Back Ground .............................................................................................................................1
1.2. Objective ...................................................................................................................................1
1.3. Methodology .............................................................................................................................1
1.4. Scope and Limitation ................................................................................................................1
2. COMMODITY DESCRIPTION ...............................................................................................2
2.1. Definition ..................................................................................................................................2
2.2. Classification of the Commodity ..............................................................................................2
3. RAW MATERIALS AND INPUTS ..........................................................................................4
3.1. Variety of coffee seed................................................................................................................4
3.2. Availably of coffee seed ............................................................................................................6
3.2.1. Supply of coffee seed ................................................................................................................6
3.2.2. Demand for seeds ............................................................................................................................................. 7
3.3. Market and Market Arrangement ..............................................................................................7
3.4. Price and Price Trend ................................................................................................................8
3.4.1. Price of Coffee Seed & Seedling ..............................................................................................8
4. COFFEE PRODUCTION AND PROCESSING ...............................................................................9

4.1.Site Selection ........................................................................................................................9

4.2. Land Preparation for Cultivation .......................................................................................................9

4.3. Construction of Irrigation Systems (if any)***** ..............................................................................10

4.4. Coffee Nursery Management (preparation).....................................................................................11

4.5. Young Coffee Plant Management ...................................................................................................11

4.6. Matured Coffee Management ..........................................................................................................11

4.7. Planting the Seeds ......................................................................................................................12

4.8. Pest and Disease Control .................................................................................................................14

4.9. Fertilization and Manuring ..............................................................................................................18

4.10. Harvesting and Post-harvest Processing........................................................................................18

4.11. Machineries for Coffee Production and Processing ......................................................................22

5. MARKET RAW DATA ..........................................................................................................24
5.1. Market Segmentation ..............................................................................................................24

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5.2. World coffee Market ...............................................................................................................24
5.2.1.World Trade of coffee ....................................................................................................24
5.3. Ethiopian coffee Market..........................................................................................................25
5.3.1.Demand for Coffee.........................................................................................................25
5.3.2.Supply of Coffee ............................................................................................................26
5.4. Marketing Arrangement and Channel .....................................................................................26
5.5. Price Trend of Export Coffee ..................................................................................................28
4. RISK, SUCCESS FACTORS, CONSTRAINTS AND PROBLEMS ....................................29
6.1. Risk Factors ............................................................................................................................29
6.2. Success factors ........................................................................................................................29
6.3. Constraints ..............................................................................................................................29
6.4. Major problems .......................................................................................................................29
7. PARAMETER AND BASIC TECHNICAL COEFFICIENTS ..............................................30
7.1.REVENUE ........................................................................................................................30
7.2. INVESTMENT COSTS ..........................................................................................................31

7.2.1. Farm Establishment Cost..............................................................................................................31

7.3. FARM OPERATION COSTS -OPERATING COSTS 1 ........................................................33

7.4. Machinery Requirement (for one hectare) ...........................................................................................36

7.5. Seed and Chemical Fertilizer Requirement .........................................................................................36

7.5.1 Seed Requirement ......................................................................................................................36

7.5.2. Fertilizers and Chemical...............................................................................................................37

7.5.3.Other Operating Cost of Four Years Includes ...............................................................................38
7.6. Operational Cost 2 ..................................................................................................................39
7.7. Coefficients for Investment and Operational Costs ................................................................41
7.8. Working capital requirement ...................................................................................................46
REFERENCE ......................................................................................................................................47

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 1. INTRODUCTION
1.1. Back Ground
RPDMD (Research and Project Data Management Directorate) is expected to assist DBE in the
course of extending credit services to its potential clients through providing basic raw project
financing data. Basic Project Supporting Raw Data provision is the principal task anticipated from
the Directorate in light of the newly defined role. This is, therefore, to avail updated basic project
financing raw data on coffee plantation and processing.

The document is, hence, prepared by collecting current relevant data from the concerned
government offices, operational existing farms, stake holders and websites first by pinpointing
coverage areas of data collection.

1.2. Objective
The objective of the study is to produce a document that will serve as a source of up to date raw
data and information (reference) for appraisal of projects related to the sub-sector and for making
proper decision in the process of delivering credit to prospective borrowers.

1.3. Methodology
The case team has employed an inductive research method to prepare this document. In general, the
following procedures are employed in gathering and compilation of basic required data and as well
relevant information. Reviewing literatures and collecting of secondary data using all sources from
various stake holders, internet, and publications of other organizations and by collection of primary
data from renowned privately owned commercial coffee plantation firms through dispatching of
structured questionnaire and interviewing of appropriate experts. All norms and coefficients in the
parameter part were taken from previously conducted commodity studies, i.e., year 2012 and 2016.

1.4. Scope and Limitation

 Scope
The scope of the data collection encompasses raw data on coffee plantation inclusive of processing
i.e., production of clean coffee bean in Ethiopia.
 Limitations
The research team has not faced observable limitation while conducting this update of commodity
except lack of trend price set in relation with major raw materials.

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 2. COMMODITY DESCRIPTION
2.1. Definition

Coffee is a brewed beverage with a distinct aroma and flavor, prepared from the roasted seeds of
the Coffee plant. The seeds are found in coffee "berries", which grow on trees cultivated in over 70
countries. Its stimulating effect is due to caffeine content.

2.2. Classification of the Commodity

2.2.1. Botanical Classification (Bean Variety)

In the commercial coffee industry, there are two important coffee species Arabica and canephora
(more commonly called Robusta).
i. Coffee Arabica - C. Arabica
Coffea Arabica is descended from the original coffee trees discovered in Ethiopia. These trees
produce a fine, mild, aromatic coffee and highly flavorful bean that contain less caffeine than
Robusta beans while the different growing regions of the Arabic bean create different flavor in the
bean. The coffee Arabic growing in wet tropical areas that have an annual average temperature of
around 21° C (70 F) & is the bean that over 70% of all coffee beverages are made from Arabica
coffee.

ii. Coffeacanephora C. canephora var. Robusta

The Robusta bean itself tends to be slightly rounder and smaller than an Arabica bean. The Robusta
tree is heartier and more resistant to disease and parasites, which makes it easier and cheaper to
cultivate. It also has the advantage of being able to withstand warmer climates, preferring constant
temperatures between 75 and 85 degrees Fahrenheit, which enable it to grow at far lower altitudes
than Arabica. It can grow at lower altitudes than Arabica, and are less vulnerable to pests and
weather conditions. It produces fruit much more quickly than the Arabica, which need several years
to come to maturity, and they yield more crops per tree. It requires about 60 inches of rainfall a
year, and cannot withstand frost.

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 iii. Liberica Coffee

A coffee plant species (CoffeaLiberica) that is third in importance among commercially produced
coffees behind Arabica (Coffeaarabica) and Robusta (Coffeacanephora var. robusta). Liberica
coffee trees grow up to 18 meters tall and have large leaves with a leathery surface as well as large
seeds (coffee beans). LibericaCoffea: “Coffealiberica Bull. exHiern” species is native to the forests
of Liberia and the Ivory Coast.

2.2.2. Classification Based on Production and Farming System

 Forest Coffee: Forest coffee is self-sown and grown under the canopy of natural forest trees,
and has wide diversity for selection and breeding for disease resistance; it offers high yields
and top quality aroma and flavor.
 Semi-forest Coffee: This production system is also found in the Southern and South-Western
parts of the Country. Farmers select forest trees so as to let in adequate sunlight to the coffee
trees and still provide adequate shade. Farmers slash the weeds once a year to facilitate
harvesting of the coffee beans. This system is believed to be evolved from the natural forest
coffee.
 Garden Coffee (Cottage): Garden Coffee is found in the vicinity of farmers' residences.
Garden coffee is planted at low densities ranging from 1000 to 1800 trees per hectare; it is
mostly fertilized with organic material and inter-cropped with the other crops
 Plantation Coffee: Plantation coffee is grown on plantations owned by the state (currently put
up for sale/privatization) and on some well managed smallholders coffee farms.
 Organic coffee VS Inorganic Coffee

Organic coffee is growing coffee by using methods and materials that have low impact on the
environment and Inorganic Coffee. Inorganic coffee is produced by using additives like chemical
substances, fertilizer, some pesticides and herbicides.
2.2.3. Classification Based on Geographic Origin
Based on bean shape and quality assessment using raw roast and liquor characteristics Ethiopian
coffee can majorly be classified in to kefa, Jimma and Agaro, sidamo, Dilla, Yirgachefe and Harar
coffee.

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 3. RAW MATERIALS AND INPUTS

The major raw materials used in coffee plantation & processing are:

 Coffee seed and/ or Seedling,

 Fertilizers & Chemicals, and
 Packaging materials.
3.1. Variety of coffee seed
Coffee seed is the bean of the coffee plant, which is found inside the coffee berry or coffee cherries.
The vast majority of coffee beans in the world come from two species of coffee: Coffee Arabica,
and Coffee Robusta. Currently, there are so many varieties were produced and released from
research centers.

Table 3.1: Different Released Varieties

Sr. Yield (qt/ha) of pure coffee Altitude (m) Year of
No. Varieties Release
Research centre On Farmers land
1 Merdacheriko (8136) 17.1 15.4 1750-2100 2006
2 Buno-Washi 2-05 (7416) 23.5 16 1750-2100 2006
3 Yachi- 1-05 (7576) 19 15 1750-2100 2006
4 Wush-wush 2-05 (7414) 16.4 16 1750-2100 2006
5 Angafa 5-05 (1377) 16.2 15 1550-1750 2006
6 741 12.2 6 -7 1550-2100 1986
7 744 16.6 16 1550-2100 1988
8 740 16.2 6-7 1000-1550 1988
9 7454 18.3 8-9 1000-1550 1989
10 7487 23.8 8-9 1550-2100 -
11 74110 19.1 8-9 1550-2100 1987
12 74112 18.1 9-10 1550-2100 1987
13 74140 19.7 9-10 1550-2100 1987
14 74148 18 9-10 1550-2100 1988
15 74158 19.1 9-10 1550-2100 1987
16 74165 17.3 6-7 1550-2100 1987
17 754 14.8 9-10 1550-2100 1989
18 75227 17.9 8-9 15502100 1989

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Sr. Yield (qt/ha) of pure coffee Altitude (m) Year of
No. Varieties Release
Research centre On Farmers land
19 Desu 20 7-8 1540-1750 1997
20 Katimor J-19 16.6 8-9 1000-1750 1997
21 Katimor J-21 19.4 10-12 1000-1550 1997
22 Me’oftu (F-35) 21.4 14-20 1550-1750 2002
23 Geisha 23.4 10-12 1000-1550 2002
24 7440 16.2 8-9 1550-2100 2009
25 Ababuna 23.8 15-16 1000-1500 2009
26 Melko CH 2 24 13-15 1550-1750 2009
27 Gawe 26.1 21 1000-1750 2009
28 EIAR50/CH 20.9 - 1000-1750 2009
Source: Ethiopian Coffee & Tea Development & Marketing Authority

Table 3.2: Speciality coffee seed varieties released from JARC/EIARC

S.No Type Variety Avg. Yield Altitude (m) Year of Favorable areas
(qt/ha) at release listed as example
Research
center
1 Haru 1(W66/98) 15.6 1550-1950 2010 Gimbi, Haru
Challa (W76/98) 15.6 1200-1550 2010
Wellega

Sende (W92/98) 16 1200-1550 2010 Anfilo

Menesibu (W78/84) 16.4 1450-1700 2010
2 Harusa (H-674/98) 16 1550-1750 2010 Xiro and Mesela
Mocha (H-739/98 13.5 1550-1750 2010
Mechara -1(H-823/98 11.9 1650-1850 2010 Habro and Darolabu
Harer

Bultum (H-857/98) 17 1650-1850 2010

3 Fayate 19.5 1740-1950 2010 Sidama, Yirgachafe
yirgachafe

and Gelanaabay
Sidama/

Odicha 20.2 1500-1750 2010

Koti 21.2 1750-1950 2010
Source: Jimma Agricultural Research Center

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Table 3. 3:Hybrid coffee seed varieties released from JARC/EIARC

S. Variety Yield (qt/ha) of pure coffee Year of

No Research canter On Farmers land Altitude (m) release
1 Ababuna 23.8 15-16 1550-1800 1997
2 Melko CH-2 24 13-15 1500-1800 1997
3 Gawe (74110xF-59) 26.1 21 1500-1700 2002
Source: Jimma Agricultural Research Center

3.2. Availably of coffee seed

3.2.1. Supply of coffee seed

Table 3.4: Total Seed and Seedling Supplied by,Jimma Research Centre

Year in EC Total Seedling in pcs Total Seed Supplied (‘kg)

2006 57,140 17,320
2007 57,140 17,320
2008 57,140 17,320
2009 57,140 17,320
2010 57,140 17,320
Total 285,700 86,600
Source: Jimma Research Center

Table 3.5: Total Seed and Seedling Supplied By Limu Plantation

Year in EC Total Seedling Total Seed Supplied (‘kg)

2006 1,583,582 633
2007 3,123,824 1,250
2008 2,888,547 963
2009 1,733,878 741
2010 1,626,280 695
Source: LIMU coffee plantation
Remark: Limmu coffee plantation farm covers its seed and seedling requirements from its own source as
indicated on the above table.

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 3.2.2. Demand for seeds
According to the information obtained from Jimma research center, different varietiesof seed and
seedling are released to coffee plantation farms, farmers and stakeholders and the demand is highly
increasing from year to year as result, the research centre is working to meet the demand in parallels
manner.

3.3. Market and Market Arrangement

The market arrangement of improved coffee seeds can be seen from two perspectives, formal and
informal arrangement. In the formal marketing system, the farmers or any other firm who wants to
plant coffee presents its demand to the supplying unit (JARC, Government or Private Coffee
Plantation Enterprises) and make agreement on the quantity of seed they require. The supplying
units produce coffee seeds based on customers demand and the agreement reached between them.

In the case of informal system, every coffee plant producers multiplies coffee seed on their own
land for their own farm expansion and also to sell to the others farmers. These coffee seed
producing farmers get technical training on coffee seed production from Jimma Agricultural
Research Center. The price of improved coffee seed fluctuates from year to year following the
market price of coffee grain.

Based on the aggregate demand, Agricultural Input Supply Enterprise (AISE) imports the fertilizer
and distribute to cooperative unions. Cooperative unions then distribute to the primary cooperatives
where farmers have direct access to fertilizer for cash purchase, or in some cases, obtained on credit
bases by pre-determined price. In areas of the country where there are no cooperative unions, AISE
takes the role and responsibility of delivering directly to the primary cooperatives. AISE can also
supply fertilizers directly to the farmers without intermediaries.

As per information obtained from field survey, farmers can purchase herbicide chemical both from
government (cooperative union and primary cooperatives) and private importing companies.
Payments can be made on cash or credit base and the transportation cost will be covered by the
purchaser.

There are two marketing arrangement for Jute bag. The first is calling all interested and eligible
bidders for the supply based on certain specification and the other is directly purchasing the product
(Jute bag) at factory gate by covering the transportation cost.

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Based on the bid result, contractual agreement will be made between the buyer and the seller. The
winner of the bid will be expected to supply the required amount in accordance with specification
and delivery schedule of the buyer. The existing marketing arrangement shows that payment is
made by the buyer on cash basis rather than credit.

3.4. Price and Price Trend

3.4.1. Price of Coffee Seed & Seedling
Table 3.6: Price of coffee seed and seedling

Item Measurement Unit in birr Price Birr/ unit

Coffee seed Kg 175
Seedling Unit 2.50
Source: Jimma Research Center

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 4. COFFEE PRODUCTION AND PROCESSING

4.1. Site Selection

Appropriate site selection is the first requirement for coffee production. This may include፡

 Fertility of soil
 Agro-ecological conditions
 Availability of water sources
 Soils:
The ideal soil is one with a good surface and sub-surface drainage, and one that is easily workable.
** The presence of humus and other nitrogenous matter in the soil is an advantage.
 Climate:
Tropics and semi-tropics areas are preferable.
Arid areas with supplementary irrigation can also be practiced with selected varieties (like k1,…)
 Temperature:
An average temperature between 20°-27°C. Growth is most rapid during hot rainy season and
during cool dry season berries ripen and ready for picking.
** Bright sunshine and warm weather are necessary for the harvesting.
 Rainfall:
Abundant, uniform and continuous rainfall, i.e, 1000 to 2000 mm annually.
 Shade:
Direct sunlight is harmful for coffee plants; therefore, these are planted under shade of taller trees.
 Topography:
An altitude of 900 to 2200 meters might more preferable.
Water logging affects coffee plants; therefore, hill slopes of 7-11% are best suitable for it.
4.2. Land Preparation for Cultivation
Once, the site for coffee plantation is properly selected; the next step will be land preparation which starts
from land clearing.

 Land Cleaning
It is also important to clear the bush in gullies and immediately below coffee blocks so that cold air is not
dammed up but can be flowed away freely downhill.

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During land clearing for coffee, heavy vegetation and large rocks are removed. Where the land is not too
rocky, clearing involves the removal of rocks, debris, and vegetation.

 Levelling the Land

Land levelling may be necessary if there is small depression which is subjected to water logging and the land
used for intercropping until the coffee tree canopy joined together.

*** With recommended slope percentage

 Terracing
If the field is sloppy and irrigation is used, it needs to be terraced along the contour to avoid soil erosion by
constructing ridges along the counter.

 Construction of in farm roads

Construction of farm road is one part of land development. It helps for easy transportation of small farm
tools, fertilizers and chemicals, spraying of chemicals, controlling of weeds and easy operation of irrigation
systems.

* The land development manual can be used for further elaborations

4.3. Construction of Irrigation Systems (if any)*****

If irrigation is to be used, it should be installed prior to planting of coffee trees. If there is no
irrigation, both shade trees and coffee will need hand watering for a few weeks until established.

The following main factors relating to selection of an appropriate irrigation system and construction
of irrigation channel for coffee plantation are considered:-

 Field Considerations: such as soil type, drainage, erosion potential, location of power sources,
topography (including pumping lifts), and distance from water supplies.
 Water Considerations: such as availability, quantity, quality, costs to develop a water supply,
and annual crop water requirements.
 Crop Considerations: such as yield potential, frost protection requirements, and cultural
practices relating to planting, pest management, and harvesting
 System Considerations: such as the type of power supply, labor requirements and availability,
initial capital, and annual operating costs
** The irrigation method to be installed with its detail specifications should be submitted with the
Feasibility study!

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4.4. Coffee Nursery Management (preparation)
 Preparation of seed beds,
 Cleaning and mixing the soil,
 Germination of seed,
 Filling and arranging the filled bags,
 Planting the germinated seed
*** Nearly 250 such pieces must be made out of 1 kg of polythene tube

*** Each tube will be filled with good soil weighing about 1.5 kg

*** The soil should be mixed with compost at the rate of 1gm per polythene tube (or seed)

4.5. Young Coffee Plant Management

 Mulching
Ideally a 5-14 cm settled layer of mulch should be laid along the rows at 60 cm band on either side of the
coffee trees, but kept away from direct contact with the coffee stems.

 Crop Cover
Coffee yield significantly increase under the crop cover as compared with the slashing. To avoid the
buildup of plant specific pests, rotating of crop cover is recommended.
 Coffee Canopy Management
The common systems of canopy management in coffee are pruning and rejuvenation (up grading). However,
pruning and rejuvenation (up grading) is one and the same thing and only differs in degree. Pruning is an
annual operation whereas rejuvenation is only necessary when production starts declining.

 Application (time & method)

Phosphorus should be applied at establishment and in mature coffee (once a year) before rains or even during
rains. It should be incorporated in to the soil to a depth of 15cm.

4.6. Matured Coffee Management

4.6.1. Rejuvenation or Cycle Conversion
When coffee trees get old or their productivity level declines, they are usually rejuvenated (rehabilitated)
through pruning.

In general production cycles between 5 and 13 years should be maintained depending on the situations.

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 4.6.2. Managements of Coffee Shade Trees
In a favorable environment and with intensive cultivation, coffee grows satisfactory without shade.

The need of shade is controversial. Un-shaded coffee almost in-variably gives higher early yields than
shaded coffee, but it has a tendency to over bearing, dieback, biennial bearing, exhaustion, diseases and short
productive life span. Numerous experiments indicate that shade is favorable for the growth of coffee and
improves quality.

4.7. Planting the Seeds

Seeds can be started in a seed flat.

Coffee seeds take 50 or more days to germinate.

As the seedlings emerge, 70 - 90 days after planting, gently pull out the entire plant by its
matchstick-like stem before the cotyledons open.

Transplant the seedling to a plastic bag or pot (3 inches diameter by 8 inches tall) using cares not to
bend the taproot.

 Inter row and intra row

Traditionally, coffee trees were spaced at 8 x 8 ft or, in cloudy areas, 10 x 12 ft.

These wide spacings allowed the trees to be kept low to facilitate picking and to expose a large
surface of each tree to sunlight for increased bearing. Recently, planting coffee in hedgerows has
become popular, with the trees close together in rows separated by wide alleys. This system
increases the number of trees per acre.

 Transplanting
Coffee orchards are started from transplants. Coffee seeds are rarely planted directly into the
orchard, primarily; because they germinate slowly, and weeds become a problem.

For hand transplanting, these include growing plants in plastic bags or paper sleeves, growing plants
in bed nurseries, and digging up seedlings.

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  Planting
Planting often takes place during the wet season so that the soil remains moist while the roots
become firmly established.

 Common Nursery Diseases and Insects

*** Damping-Off (collar rot)

Symptom: two stages of the disease are observed which are:

Pre-emergence damping-off: Embryo and endosperm are invaded by the fungus, as a result, it
causes seeds rot and disintegrated.

Post-emergence damping-off: Seedlings show brownish discoloration on the stem near the ground
level leading to rotting of the tissues. Growing apex wilts and the seedlings collapse and die.

 Control measures
Cultural:-

Preparing of raised seed beds with well dried and sieved jungle soil, compost and sand (6:2:1)

Providing of proper drainage system around the seedbed and avoiding of excessive watering to the
seedbeds.

While sowing seeds, maintaining a minimum of 2.5 cm distance between seeds to avoid
overcrowding of seedlings and provide uniform filtered overhead shade.

Chemical Method: Removing and destroying of the affected seedlings followed by spraying of
bavistin 0.05% (carbendazim 50 WP) -1g/liter or folfaf (captafol 80 WP) o.3% to3.75g/liter if the
disease is noticed if the problem is getting worse. The seedlings can be sprayed with a 0.5% copper
solution (copper oxychloride) to prevent further spread of the disease to the healthy seedlings. Five
gm of the fungicide could be sufficient to cover 1000 seedlings. The application is repeated 3-4
times at weekly interval until the level of incidence slows down.

*** Leaf-Eating Pests (Grass Hopper, Crickets, Wire Worms Hoppers)

Such a group of insect pests commonly attack coffee seedling by eating leaves. Cricket is nocturnal
and attack seedling at night.

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This insect must be control by spraying either metacid 50 EC 1 ml/lt of water or ekalur 25 EC 2ml/lt
of water manual sprayer (hand sprayer).

Fertilizer Application

The type and rate of fertilizer to be applied should be based on soil analysis of the nursery site and
the requirement of the species. Nursery stocks need fertilization if the soil is infertile, seedlings
show yellow color, for stronger rooting and if it is stunted and not reach an optimum size during
transplanting time.

The recommended rate is:

AP = urea 2gm/polythene bags
Urea = 5gm/ litter of water for foliar application
4.8. Pest and Disease Control
Table 4.1: Pest and Disease Control
4.1 Pest and Disease Control
Pests and diseases occurrence in the plantation.
Diseases
There are different kinds of coffee diseases affecting
different plant parts with variable destructive
potentialities.
Coffee Leaf Rust Coffee Berry Disease Tracheomycosis wilt
(Fusariumxylarioides)
Two species of Hemileia fungus have been reported Fungus Glomerellacingulatacauses a Symptoms:
as causing rust on coffee, viz. H. vastatrix and H. dark-brown rot, which destroys the beans
coffeicola, and causes the berries to dry out.

H.vastatrix is regarded as the more potent pathogen The symptoms are yellowing and
of the two. collapsing.
Symptoms Control Measures The disease enters through a low
surface wound or a shallow root.

Symptoms are mainly confined to the leaves and o Non Chemical Control: Inoculation Control measures: The best
start as small, yellow spots on the under surface of of seedlings and subsequent analysis of control is to choose the correct
the leaves. As the lesions increase in size, they hypocotyls infection is the method for environments for cultivation of
darken to a typical orange color. selecting resistant varieties. Selecting of coffee, to use mulches and to
resistant cultivars from semi-wild and cultivate coffee with implements.
genetically diverse coffee populations
and using of their hybrids show high
levels of field resistance.
Control Measures Cultural: digging out the infected
coffee bush with as much of the
root system as possible and burn
them.
Cultural: Keeping weeds to a minimum and o Chemical Control: Although several - Minimizing any kind of
maintain trees in an open condition by handling, different and effective fungicides for wounding to the coffee stands.
centering and de-suckering. control of CBD are known, their use in
the field has been inconsistent.

14
Preventing over-cropping by reducing crop. o Numerous fungicides have been - Exercising of good
evaluated for CBD control. The most agronomic practices on time, such
effective are: 50% copper formulations, as weeding, fertilizing.
captafol, chlorothalonil, benomyl,
thiophanate-methyl, thiabendazole, and
dithianon.
Conserving soil moisture by mulching and weed Chemical: sterilizing of
control. implements, such as pruning
scissors & machetes.
Chemical: The use of available contact and Recommended insecticides include: - Painting of the tree based
systematic fungicides for the control of this disease every few months with broad
is recommended. spectrum fungicide e.g. copper
based fungicides. Dis-infection of
wounds caused by pruning,
slashing and lesions & caused by
insects, spraying or swabbing with
Bordeaux mixture.
A routine spray program during susceptible periods o Lindane:-800gm/hectare two or three
of the year with a copper based fungicide such as applications at 10 day interval.
cuprar it should be used.

o Dieldrin (18%ml) - 625ml/ha after the

main crop spray twice at 3-week
intervals.
***When the first symptoms are
observed spray cupravit at 0.25-0.5 %
(250 to 500gm product/100 liters water),
tuzet at 0.1-0.15 % (100-150gm),
product/100liters water) or urbacid at
0.03-0.04 % (30-40gm product/100 liters
water).
The treatment should be repeated several
times at intervals of 2 weeks.

Antestia stink bug

Coffee Leaf Miner (Leucoptera Whitestem borer (Xylotrechusquadripes) (Antestiopsis sp.)
caffeine)
Damage cause: damage is caused both - Symptoms: The larvae bore through the stem It is a dangerous pest
by larvae and adults. Blackening of the of young trees (one or two years old) and the trees for coffee and it can
flower buds. Fall of immature berries, usually die off. Three or four-year-old trees wilt destroy up to 50% of
rotting of the beans with in the berries and turn yellow and yield either a poor crop or the crop in a season.
are brings about harvest losses. nothing at all. Adult coffee trees do not die off
immediately, but continue to form roots as the
original roots are destroyed.
Control Measures Control Symptoms: The bug
transmitting spores of
the fungus
Namatospora to
developing beans
causes severe damage.
In the adult stages the
insect feeds on flower
buds, young shoots,
growth points and
coffee berries.

15
- Chemical: when the attack is - Chemical control: The chemical solution This could cause the
serious, chemical control is possible may be sprayed or painted onto the stems up to a drop of young,
using an insecticide with Translaminar height of 450 mm annually from December to immature berries or
systemic action to get in to the mines February. It is important to rub off the loose bark rotting of the coffee
and a narrow spectrum of activity so around the stems before applying the insecticide. beans. When the insect
that the natural parasites will not be The chemicals must not be applied on leaves or is feeding with berries it
destroyed. Avoid use of a contact and berries. Stem treatments must be with a chemical can transmit fungi to
persistent insecticides. Recommended with a long residual action. It will also help if the the seeds, which may
insecticides included: loose flaky bark is removed superficially. Full lead to rot.
cover sprays with most insecticides will kill adult
beetles.
Fenitrothion (50%m, l) 1lts/ha - Cultural control: Sanitation-removal of all - Control: Monitor
plants showing symptoms of stem borer attack. bushes every week by
shaking the branches
and by counting the
number of Antestia
stink bugs that are
collected. Visual
monitoring alone is not
reliable as these bugs
are very well
camouflaged.
Fenthion (50%m, l) 2.25lts/ha Cultural practice: by
keeping the plants open
through maintenance
pruning, Antestia bugs
will do less damage.
Natural enemies: all
stages of the pest are
attacked by parasites,
mostly egg parasites.
Parathion (40%m, l) 1120ml/ha

16
 Weed Controlling
Weeds in the coffee crop should be controlled to
avoid the production loss and make easier the crop
management. Good weed management and effective
weed control require better understanding of weed
response to change in cultural methods and the
application of herbicides.
- Cultural Control Methods
Slashing, mulching and use of hoe (dig over) are the
commonly used cultural methods of weed control in
coffee. Pulling or uprooting of the weeds out of the
soil by hand also the other way of cultural weed
control.
This practice is also laborious, time consuming with
little effect on the control of perennial weeds.
Nevertheless, slashing and digging with the proper
timing could be vitally useful with Integrated Weed
Management (IWM).
- Chemical Control
Herbicide application is an essential part of coffee production.
Chemical control method success is very much dependent on
application at the correct stage of weed growth. It requires
correct weed identification for appropriate choice of herbicides.
The non-selective herbicide must be used with very great
attention not to injure the coffee plant.

17
4.9. Fertilization and Manuring
The coffee plant ranks among the tropical crops with the highest nutrient demands.

The kind and quantity of fertilizer would vary depending on the type and initial fertility of soil, climate, plant
age, cost and availability of fertilizer on a few representative plants. It is recommended that leaf and soil
analyses be made every year once the trees start producing. This would make it possible to obtain an accurate
and complete fertilization programme.

Leaf collection for analysis should be done in spring when the plant is in full bloom. Soil samples should be
taken after the rains when the soil has dried out before planting.

*** It is important to apply the correct types and quantity of fertilizers according to the soil analyses
recommendation.

Manure and compost such as coffee pulp and husks have a low nutrient content. When utilized as a source of
nutrients, they must be used in large quantities to supply sufficient nutrients for coffee plants. Manure and
compost helps to improve soil structure and organic matter.

Chemical fertilizers are higher in nutrient content than organic fertilizers. It is and they are a more effective
method of applying nutrients. For optimal results, it is best to apply a combination of manure, compost and
chemical fertilizers.

4.10. Harvesting and Post-harvest Processing

 Pre Harvesting and Processing Activities
It has been realized that final coffee quality and production can be greatly affected if there is failure in
carrying out activities before inception of harvesting and processing.

These activities include the flowing:

 Yield estimation: the volume of expected yield should be assessed during flowering and
verified by hard green stage. This will give an insight for preparation.
 Selection of weighing and reception sites: Weighing sites should be positioned as near as
possible to picking sites so that pickers do not have to carry picked coffee for long distance.
The surrounding of weighing sites should be kept clean so that dropped fruits (if any) are easily collected.

A shelter must be constructing to protect the collected cherry from direct sun light.

18
  Harvest maturity
Coffee berries/fruit mature from May to October, depending on the climatic zone and the cultivars. The
berries are mature when they are red and soft. The coffee berries are ready 8 to 9 months after the plant
flowers.

 Harvesting the Cherries

Depending on the variety, it will take approximately 3 to 4 years for the newly planted coffee trees to bear
fruit. The fruit, called the coffee cherry, turns a bright, deep red when it is ripe and ready to be harvested.

There is typically one major harvest in a year, where there are two flowerings annually; there is a main and
secondary cropping, if the process is mechanized.

 Harvesting methods
There are different methods of harvesting coffee, the first of the four types being the stripping method. This
form of harvesting is done by hand, and it removes all of the berries, flowers, green berries and deeply over-
ripened berries.

The second method uses a comb to brush the trees. This method does remove all ripe berries, leaving the
unripe berries as well as the green leaves that are still connected to the branches of the tree. This is a time-
consuming process, but it is worth the time invested. However, this process of harvesting would be more
profitable because the unripe berries will eventually become ripe, increasing the future yield.

 Coffee Processing
- Processing is a major activity in coffee production and it is the most critical activities from a
quality point of view.
- Coffee processing involves three distinct operations:- pulping, washing, drying and packing.
- Clean coffee, prior to roasting is blended in desired proportions.
- Ripe coffee beans and green coffee cherries are dense and sink.
Therefore, the first step in coffee production consists of separating the "floaters" from the "sinkers".

- The coffee floaters are usually sent directly to the patio (drying pan) to be dried and are
often slated for internal consumption.
- The ripe and green cherries can be sent to the patios to be dried using the natural process of
preparing coffee or can be sent to the coffee pulping machines.

19
 Pulping Coffee
The green cherries are hard and cannot be pulped. Instead of passing through the screen, the green coffee
beans pass to the end of the barrel system and are separated from the ripe coffee beans. The pressure inside
the barrel controls how many cherries will be pulped. A very high pressure will cause all of the cherries
including the green beans to be pulped. It is necessary to continuously monitor the pressure so that about 3%
of ripe cherries are not pulped and are removed with the green cherries.

 Coffee Fermentation
The coffee beans covered in the slippery mucilage can be sent to the patios to dry as pulped natural coffees
or can be sent to coffee fermentation tanks. The coffee fermentation tanks are used to remove the mucilage
before drying. The pulped coffee beans are put into cement tanks with water and are allowed to ferment for
16-36 hours. On the way to the fermentation tanks, another density separation can occur. The highest
quality coffees are the densest and should be separated and fermented in a different tank.

*** The coffee fermentation time depends on a number of factors including the amount of coffee fermenting,
water temperature, and humidity.

 Coffee Drying
Drying can be done by either sun drying or mechanical hot air drying, and preferably on shade netting. By
drying, 13% to 15% moisture content is reduced. Sun drying is cheap and makes a slightly higher-quality
product but it requires much labor, space and time. The coffee must be laid 2 – 5 cm thick and turned every
hour.

From the coffee fermentation tanks, the beans are moved to drying patios and dried to 11-12%
moisture content for storage and/or the next processes; 18-25% MC for sowing.
 Grading
The dry, green, hulled coffee beans are graded according to size and shape by means of a rotating sieve. In
the first place, the beans are pushed along by a spiral plate, or moved along an inclined horizontal rotating
sieve where holes or bars vary in size or width to allow the required sizes of beans to fall through into
separate compartments as they pass from one end of a grader to the other. Otherwise, grading is three-
dimensional for the flat beans, i.e. width, thickness and length.

 Packing
Coffee must be packed into the coffee basket firmly; otherwise the pressurized water will break the coffee
apart during brewing and will not permeate the coffee evenly. The packer must be sized correctly to the
coffee basket chosen.

20
The aluminum-free packaging is also characterized by highest environmental compatibility.

In general,

Coffee processing (sorting, washing and drying)

21
4.11. Machineries for Coffee Production and Processing

1. LAND DEVELOPMENT
Land Development

Activity Machinery

Bush clearing Dozer and/or Loader

Tree felling Dozer and/or Loader

Trash removal Dozer and/or Loader

Uprooting Dozer and/or Loader

Levelling Leveller

Ridge forming Ridger

2. FARM TOOLS
Description Use for

Pruning Shear for coffee maintenance

Machet for nursery & coffee maintenance

Sickle for coffee maintenance

Axe for nursery & coffee maintenance

Bow Saw for nursery

Shovel for nursery & coffee maintenance

Flat file for coffee maintenance

Hose for nursery

Watering cane for nursery

Mattock for nursery & coffee maintenance

Weeding hoe for coffee maintenance

Rake for nursery

Wheel barrow Nursery

Hammer Nursery

22
 3. Plantation and processing
List of Machinery and activities Type of production process

Ploughs, Ploughing Plantation

Disks, Disking Plantation

Trailers, Tractor transport operation Plantation and Processing

Tractor spraying Plantation

Coffee hulling machine, Hulling Processing

Coffee pulping machine, Pulping Processing

Water pumps, Pumping Plantation and Processing

Valves, Deliveries, siphons, lines; Screening For irrigation systems

Generator Plantation and Processing

Artificial drier Processing

4. Wet and Dry processing machinery

Machine Purposes
Is a machine for stripping the skin, bark, or rind off plant stalks, grain, particularly coffee
Decorticator - bean, in preparation for further processing.
This machine is used to segregate unriped greens from fully matured ripe coffee berries.
Green been separator Manual and Automated sorting can be done using this machine.
Disc pulpers are used in wet processing plants to pulp ripe coffee fruit to parchment
Wet Pulping Plant caters to small growers who process upto 800 kgs of ripe cherry fruit
input in an hour.
Wet pulping plant The plant is capable of both pulping and washing.

Are designed to clean and screen coffee, prior to feeding on to the next processing stage.
The machine effectively removes iron particles, stones, sand, rubble, leaves, twigs and other
Coffee pre-cleaners unwanted matter.
Smout peeler polisher Peeler Polishers are specially designed for treatment of dry parchment coffee
Dry destoners are used for removing stones from green coffee, dry parchment or dry cherry

Designed to cater to small processors who process up to 2000kgs. of green coffee output per
Dry processing plant day. It is capable of cleaning, hulling and grading dry cherry, dry parchment

23
5. MARKET RAW DATA
5.1. Market Segmentation
 Both Domestic and International Market
5.2. World coffee Market
Table 5.1: World Production of Coffee (Top Ten)

Sr. Production (Thousands ‘000’ 60-Kilogram Bags)

No Country 2013/14 2014/15 2015/16 2016/17 2017/18 June 2018/19
1. Brazil 57,200 54,300 49,400 56,100 50,900 60,200
2. Vietnam 29,833 27,400 28,930 26,700 29,300 29,900
3. Colombia 12,075 13,300 14,000 14,600 14,400 14,500
4. Indonesia 11,900 10,470 12,100 10,600 10,600 11,100
5. Honduras 4,400 5,100 5,300 7,510 7,500 7,350
6. Ethiopia 6,345 6,75 6,510 6,943 7,055 7,100
7. India 5,075 5,440 5,800 5,200 5,420 5,500
8. Uganda 3,850 3,550 3,650 5,200 4,350 4,800
9. Mexico 3,950 3,180 2,300 3,300 4,000 4,500
10. Peru 4,250 2,900 3,500 4,225 4,75 4,400
Total Production 138,878 125,640 131,490 140,378 133,525 144,950
Source: USDA (United States Department of Agriculture)

5.2.1. World Trade of coffee

Table 5.2: World Import (Top Ten)

Sr. 2013 2014 2015 2016 2017

No. Importers Quantity Quantity Quantity Quantity Quantity
in Tone in Tone in Tone in Tone in Tone
World 6,506,885 6,556,359 6,701,990 7,064,675 6,892,264
1. USA 1,313,193 1,346,278 1,357,382 1,426,252 1,430,383
2. Germany 1,056,980 1,082,045 1,032,375 1,119,348 1,040,752
3. Italy 495,296 526,949 527,894 571,965 563,258
4. Japan 455,983 407,352 433,235 432,592 403,954
5. Belgium 294,441 255,083 275,608 284,997 271,955
6. Spain 253,865 260,237 258,807 262,965 250,340
7. France 247,524 227,189 212,724 207,664 201,785
8. Canada 149,604 166,031 166,547 180,877 199,575
9. Netherlands 74,673 148,845 153,918 159,497 186,340
10. Russian Federation 125,983 135,476 137,548 150,911 165,340
Source: ITC Trade map
HS Code: 090111

24
Table 5.3: World Export (Top Ten)

Sr. 2013 2014 2015 2016 2017

No. Exporters Quantity Quantity Quantity Quantity Quantity
in Tone in Tone in Tone in Tone in Tone
World 6,905,310 7,581,528 7,324,746 7,328,529 7,167,013
1. Brazil 1,699,145 1,986,500 2,005,028 1,823,881 1,647,706
2. Viet Nam 1,253,982 1,631,756 1,259,448 1,679,153 1,398,476
3. Colombia 542,820 617,959 711,110 732,967 710,440
4. Indonesia 532,140 382,750 499,613 412,370 464,161
5. Honduras 264,002 241,943 285,223 309,923 430,743
6. Uganda 230,247 211,515 219,043 210,584 286,998
7. India 227,668 196,013 209,417 250,388 262,612
8. Ethiopia 173,014 196,182 198,293 195,324 247,082
9. Peru 238,645 185,138 183,749 240,957 245,735
10. Belgium 120,069 159,512 188,834 186,727 211,125
Source: ITC Trade map
HS Code: 090111
5.3. Ethiopian coffee Market
5.3.1. Demand for Coffee
Table 5.4: Projected total population (2018-2022)
Year Total Population
2018 96,503,000
2019 98,665,000
2020 100,829,000
2021 102,998,000
2022 105,166,000
Source: CSA, Population projection
Table 5.5 : Ethiopia Export Trend of Coffee
Sr. 2013 2014 2015 2016 2017
No. Importers Quantity Quantity Quantity Quantity Quantity in
in Tone in Tone in Tone in Tone Tone
World 173,014 196,182 198,293 195,324 247,082
1. Germany 40,828 43,350 41,186 38,844 46,848
2. Saudi Arabia 27,900 30,645 40,461 35,309 38,432
3. Japan 20,470 23,738 17,223 18,634 27,751
4. USA 14,821 17,933 21,499 16,383 25,138
5. Belgium 12,826 13,841 11,233 14,611 21,580
6. Korea 4,422 6,168 6,442 10,383 12,450
7. Sudan 9,430 8,161 10,980 8,133 11,646
8. Italy 8,087 9,820 7,501 8,684 11,438
9. France 8,457 12,107 8,886 11,996 9,608
10. United Kingdom 4,053 5,055 4,831 5,237 5,999
Source: ITC trade map

25
 5.3.2. Supply of Coffee
Table 5.6: Domestic Production
Production In Kg Thousands ‘000
Year
2013/14 6,345
2014/15 6,75
2015/16 6,943
2016/17 6,510
2017/18 7,055
2018/19 7,100
Total Production 33,953
Source: USDA (United States Department of Agriculture)

5.4. Marketing Arrangement and Channel

Market of Green Coffee Bean can be classified into domestic and foreign. The marketing
arrangement of current domestic green coffee bean market can be in two ways one directly from the
producer to the consumer and the second way is after it passes through quality test, the coffee which
is not passing to foreign market it enters to domestic market.

For foreign market it pass through after fulfilling the standards and go to auction center at Addis
Ababa, Dire Dawa and Jimma auction centers which is conducted by Ethiopian Commodity
Exchange Authority. This authority secured both the producer and buyer based on world coffee
market. The transaction held by ECX is on cash basis. There are unions which export directly to
world market without passing through auction centers.

26
Figure 5.1: Ethiopian Coffee Value Chain

Direct
Consumption

Plantation
Coffee Farmers (95% of state farms
total production) and

Red Cherry Dry Cherry

Service Legal Illegal Red & dry

Suppliers Service Cherry
Cooperatives
Cooperatives

Suppliers

Washing/
Hulling
Washing Hulling

AuctionCenters

AddisAbaba,Jimma
Rejected Coffee
& (Low Quality)
Liquoring
Unions
Private Exporters/ Unit/Quality
Hulling Control/

Sold to Private
Distributors

Direct Export
Export Domestic Consumption
(around 40 %*)

Source: ICO (International Coffee Organization)

27
5.5. Price Trend of Export Coffee
Price Trend /Fersula
Sr.
2014 2015 2016 2017 2018
No. Coffee Origin
June
1. Sidama 1,193 1,235 1,270 1,562 1,647
2. Limmu 970 1,208 1210 1,053 1,150
3. Jimma 1,083 844 745 979 1,400
4. Guji 1350 1450 1630 1,316 1,700
5. Lekemti 1,001 1,212 830 947 1,315
6. Harer 1,342 1,156 1135 1,643 1,715
7. Yirgachefe 1,294 1,415 1500 1,004 1,761.2
8. Keffa 1,095 905 800 940 1,230.5
9. Sheka - - - 1,050 1,150
10. Benchemaji 960 1060 990 900 1,200
11. Illibabur - - - - 1,225
12. KelemWellega 740 1,100 1,270 1,200 1,120
13. Godere 1.150 1,215 1,410 900 920
14. Bale 1,091 856 800 1,270 1,250
15. Anderacha 710 1,250 1,135 1,000 1,110
16. Godere - 1,050 1,010 1,000 1,050
17. Forest 991 776 715 870 890
18. Kochere 1,870 2,000 2,050 1,580 2,250
19. Wenago 1,500 1,660 1,600 1,500 1,750
20. Dilla - - - - 1,450
21. Yeki 1,280 1,030 1,200 1,070 950
22. Bebeka 1,005 1,041 900 900 835.50
23. Tepi 957 1,023 1200 850 850
24. East wellega 1,150 1,110 1,020 1,035 970
(Gimbi)
Source: ECX (Ethiopian Commodity Exchange)

28
4. RISK, SUCCESS FACTORS, CONSTRAINTS AND PROBLEMS

6.1. Risk Factors

 Natural adverse effects such as bad weather condition, which have an influence on
quality, productivity, and level of production.

6.2. Success factors

 Availability of labour force

 Market Intelligence
 High professional management

6.3. Constraints

 Price inconsistence in the international market

6.4. Major problems

 Quality compliance problem

 Coffee disease prevalence & weak intensive management

29
7. PARAMETER AND BASIC TECHNICAL COEFFICIENTS

This part of the study is devoted on the assessment of the coefficients and parameters, which are
to be used on the determination of costs and revenue in the coffee plantation and processing. The
very important caution, which has to be taken by the users of this document, is that the parameters
and prices determined are just indicatives, assists to understand where the real parameter lays.

7.1. REVENUE

 Price of Coffee (Export)

 The price of export coffee is not stable (volatile) since it varies depend up on the origin, the
type of coffee (washed or unwashed), exportable or specialty coffee. On these variables, the
price fluctuates from time to time. The latest price can be obtained from ECX website
(www.ecx.com.et) for better reference. To look at the price trend, you could refer the data
exhibited at the end of the market part.
 For further reference, the detail of five years price time series based on its origin or other
criterion such as processing could be attached for your consumption.
 Yield varies depending on spacing, type of variety, type of shade tree used, altitude, weather
condition, etc.

Table 7.1: Yield Curve

Year (age) Clean Coffee Yield (quintal/hectare)
1 -
2 -
3 -
4 3.5
5 5
6 6
7 7.5
8 9
9 10.17
10-15 11.75
Source: Field Survey and Ethiopian Coffee and Tea Development & Marketing Authority

Remark: The above table is demonstrated only to show the pattern of productivity from renowned
three existing farms,i.e., from Haile & Alem Int PLC, Bebeka Coffee Plantation, and Horizon
Plantation (Limmu Coffee Plantation). Hence, please consider the above pattern with information
given in the part of “Material and Input”.

30
7.2. INVESTMENT COSTS
7.2.1. Farm Establishment Cost

A. Land development cost

Land Development (ha): Please refer the land development manual for the required operations and
associated coefficients.

B. Machineries and equipment

Required machineries and equipment are presented on the technical data part of the document.
C. Farm Tools
Table 7. 2: Farm tools requirement and purchase price

Description Use for Unit Quantity/ha Purchase Price

(‘Birr)

Pruning Shear Coffee Maintenance Pieces 0.16 129

Bow Saw Blade Nursery Pieces 1 142.35
Machet Nursery & Coffee Maintenance Pieces 3.2 146.40
Sickle Coffee Maintenance Pieces 0.15 83.50
Zapa Nursery Pieces 12 120
Axe Nursery & Coffee Maintenance Pieces 2.25 126
Bow Saw Nursery Pieces 1 294.60
Shovel Nursery & Coffee Maintenance Pieces 10.15 120
Flat file Coffee Maintenance Pieces 0.4 87
Plastic Hose Nursery Meter 1 50
Watering cane Nursery Pair 15 70
Mattock Nursery & Coffee Maintenance Pieces 10 80
Weeding hoe Coffee Maintenance Pieces 0.4 66.70
Rake Nursery Pieces 2 80
Wheel barrow Nursery Pieces 4 170
Mater Coffee Maintenance Pieces 0.01 100
Hammer Nursery Pieces 1 150
( small)
Hammer ( big) Nursery Pieces 1 200
Barbed wire Harvesting And Processing Kg 3.70
Nail Nursery Pack 8 513
Dry Cell Coffee Maintenance Pieces 1.44 37.50
Pale Nursery Pieces 8 40
Basket Harvesting And Processing Pieces 8 100
Gesso Nursery And Coffee Maintenance Kg 0.15 80

Source: Field Survey

31
 D. Vehicles

Table 7.3: Vehicle requirement

Sr. No. Type of Vehicles Purpose

1 Single cabin cars Farm Manager
2 Double Cabin Cars Administrative, Technical and Production department
3 Mid Bus For Employee Service
4 Heavy truck For input, output and daily laborer transport
5 Motor cycle For each Supervisors and Unit Farm Managers
Remark: Number required depends on farm size and other different factors. So no specific number is set.

E. Building and Minimum Construction Requirement

Table 7.4: Building and Construction

Sr. Minimum Requirement

Building Type Remarks
No. Foundation Floor Wall Roof
1 Store(Input, Spare
Mass Concrete Cement Screed Metal Sheet CIS on Wooden truss
part, Chemicals)
2 Machinery Shed Mass Concrete Select Material Metal Sheet CIS on Wooden truss Open at one side
3 Workers Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss
Residence Mass Concrete Compacted Soil Cheka CIS on Wooden truss
4 Clinic Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss
5 Canteen Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss
6 Guest house Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss
7 Office Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss
8 Work Shop Mass Concrete Cement Screed Pointed HCB CIS on Wooden truss Open at one side
9 Brown coffee store
10 Red coffee store
11 Coffee drying floor
12 Drying bed with mesh wire
13 Fermentation tanks
14 Washing channels
15 Soaking tanks
16 Main water reservoir
17 Recirculation water reservoir and tower

32
18 Pump house
19 Lagoon for pulp and mucilage
20 Generator house
21 Mill house
22 Guard house
23 Road construction: Access road constructed by gravel whereas farm roads can be compacted soil
Source: Previous commodity study

7.3. FARM OPERATION COSTS -OPERATING COSTS 1

A. Coffee Nursery Establishment (‘ha)
Table 7.5: Man day requirement for nursery establishment

Description Frequency MD/ha

Surveying seedlings site 1 30
Seed bed preparation 1 25
Peg preparation 1 8
Lining and pegging 1 5
Parcel and leveling 1 0.5
Soil heaping and mixing composite materials 1 27
Cutting polyethylene, Filling polyethylene bags 1 20
Arranging polyethylene bags 1 1
Sorting seeds 1 5
Pre-sowing watering 1 3
Sowing 1 2
Mulch material preparation 1 5
Mulching 1 25
Shed materials collecting & construction 1 330
Watering and Cleaning 60 7
Weeding 25 2
Fertilizing 2 4
Hoeing 8 2
Spraying chemicals 3 20
Thinning shade 3 1

33
Description Frequency MD/ha
Removal of mulch 1 4
Shade removal 1 6
Seedling Sorting 2 3
Seedling Counting 2 22

B. Trans Planting Coffee

Table 7.6: Required man day for Trans planting coffee
Frequency MD/ha
Description
Surveying 1 5
Peg preparation 1 10
Transporting pegs 1 3
Lining & pegging 1 10
Holing 1 100
Re-filling Holes 1 30
Loading & Unloading Seedlings 1 7
Pre-plating Weeding
-Chemical 1 3
- Manual 1 16
Ridging 1 15
Planting coffee seedlings 1 24
Planting shade tree seedling 1 3
Remark: Plantation shades currently are natural forest trees.
One person plants 105 seedlings on average per day.
C. Young coffee Maintenance
Table 7.7: Required man day for young coffee maintenance

Description Frequency MD/ha

Manual Weeding 8 10
Chemical Weeding 3 3
Hoeing 1 14
Fertilizing 2 10
Ridge Maintenance 4 10
Mulch material Preparation 1 30
Mulching 1 14
Handling 2 6
Thinning 1 5
Shade tree planting 1 25
Regulating Shade tree 1 6

34
During young coffee maintenance, the wage rate per piece of young coffee tree:
 Birr 30.00 for one jornata (minimum one),i.e.,100 piece of coffee tree

On average a labour could work 3 journata per day. i.e., Birr 90/day.
As the efficiency of labor increases, i.e., number of journata increases, the wage rate paid in a day
parallels increase.

Source: Haile & Alem Int. PLC and other private farms
D. Wage Rate
Table 7. 8: Wage rate

Description Cost in Birr Remark

Wage rate per day for planting (soil preparation, digging the
Birr 82.50 (average) Per MD
soil into the Polly, etc.)
Wage and piece rate (Birr)
For machine Related work 35 Per 8 hr (MD)
Non machine Related work per hour
Loading per quintals 3.50 Per quintal
Unloading per quintals 3.50 Per quintal
Source: Field Survey

Remark: If there are benefit schemes such as an accommodation, food subsidy, medication,
transportation, etc. provided from farms, wage rate per day stipulated as Birr 82.50 on
averages will decrease up to Birr 25-30 per day.

Regarding to harvesting, during initial red cherry picking, pick time and end period of harvesting,
the labour wage rates are different per kg.
 During initial period of picking the red cheery: on average Birr 3.75/kg
 During pick harvesting time: Birr 2.75/kg
 During final harvesting period, it is to be on average Birr 4.75/kg (due to its time taking
nature in search of red cherry).

35
7.4. Machinery Requirement (for one hectare)
Table 7. 9: Machinery requirement

Young coffee Fuel Consumption

Description Nursery Planting
maintenance Rate (Lt/hr)
Plowing 7 Th
Disking 5 Th
Trans. Mulch material 1.5 Th
Trans Uprooted wood 2 Th
Trans.fuel for dozer 1 Th
Trans inputs & farm tools 4 Th 0.5 Th
Labour transport 4 Th 2 Th
Supervisor 27Th As per the
Parcelling roads specification of the
Bush Clearing machinery.
Tree felling &Chopping
Trash removal
Levelling
Trans. Dozer Operator
Dozer rent
Trans. Pegs 1.5 Th 1.5 Th
Trans. Seedling 5 Th 5 Th

N.B: The above table shows man day requirement and labor cost (from nursery establishment till
young coffee maintenance), however, the same activities may be done by using different
machineries such as tractor and dozer as exhibited on Table 7.10 in an alternative manner.

One thing what should have to be considered is that, manpower and machinery requirement
are an alternative ones. Dozers are usually rented. The service charge per hour is determined
by the renters in the vicinity of the farm.

Th = Tractor hour
7.5. Seed and Chemical Fertilizer Requirement
7.5.1 Seed Requirement
Seed rate-----------------------------------------------0.88 kg/hectare
Seed price---------------------------------------------Birr 175/kg
Seedling loss rate ------------------------------------ 4%

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 7.5.2. Fertilizers and Chemical

The required type of fertilizers and chemicals, with application amount and respective costs found
from Bebeka and Limmu coffee plantation farms are listed below in table 7.11 & 7.12 respectively.

Table 7.10: List of Fertilizers & Chemicals required in different Coffee Plantation Stage
Type of Packing Material, Unit of Prices in Application Coffee
Sr. No.
chemicals and Fertilizer measure Birr/Unit rate stage
I Fertilizers
6 g/seedling/yr Nursery
Qt 1,470.00 0.5 qt/ha/yr Young
1.1 DAP 0.5 qt/ha/yr Mature

Nursery
Qt
1,051.01
1.2 UREA 6 gram /seedling
Qt 1,655.50 2.72 qt/ha Young

1.3 Compound (NPK) Qt 1,655.50 6 qt/ha/yr Mature

Qt 1,064.26 Mature
1.4 CAN (Calcium Ammonium Nitrate) 2.45 qt/ha/yr
Qt 1,283.70 0.53qt/ha/yr Young
1.5 MgSo4 Qt 1,283.70 0.53qt/ha/yr Mature
3,360.50 4.3 qt/ha/yr Young
Qt
1.6 KNo3 3,360.50 4.3 qt/ha/yr Mature
1,667.60 0.05 qt/ha/yr Young
Qt
1.7 Boric acid 1,667.60 0.05 qt/ha/yr Mature
2,906.20 0.03 qt/ha/yr Young
Qt
1.8 Zinc Sulphate 2,906.20 0.03 qt/ha/yr Mature
1,655.50 0.32 qt/ ha/yr Young
Qt
1.9 CaNo3 1,655.50 0.32 qt/ ha/yr Mature
Qt 3,971.00 0.59qt/ ha/yr Young
1.10 MAP (Mono Amoneyo Phosphate) Qt 3,971.00 0.59qt/ ha/yr Mature
II Chemicals
Pesticide -
2.1 Deltametrin Liter 586.15 0.5lit/ ha/yr Mature
2.2 Lamdex Liter 506.00 0.5lit/ ha/yr Mature
2.3 Nimctiside Liter 341.00 3.3 lit/ha/yr Mature
III Herbicide
3.1 Kalach Liter 77.00 1.5lit/ha/yr Young
Liter 77.00 1.2lit/ha/hr Mature
3.2 Agroset Liter 71.50 1.5lit/ha/yr Young
Liter 71.50 1.2lit/ha/hr Mature

37
 Type of Packing Material, Unit of Prices in Application Coffee
Sr. No.
chemicals and Fertilizer measure Birr/Unit rate stage
3.3 Konyo Liter 137.50 1.5lit/ha/yr Young
Liter 137.50 1.2lit/ha/yr Mature
Source: Bebeka and Limmu Coffee Farms

Remark: It is important to apply the appropriate types and quantity of fertilizers according to the
soil analysis recommendation.

7.5.3. Other Operating Cost of Four Years Includes

 Salary of Permanent Employee

 Uniform of employee

 Travel per-diem of Employee

 Transportation of Inputs

 Land lease cost

 Insurance

 Depreciation of fixed asset

 Insurance

 Repair and maintenance

 Fuel and oil for machinery

 Clinical Materials

 Packing materials for inputs and

 Utilities

All operating costs incurred at the stage of land development activities; nursery and young coffee
maintenance have to be considered as parts of investment cost.

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 7.6. Operational Cost 2
Table 7.11: Mature Coffee Maintenance

Description Frequency Md/ha

Manual Weeding 6 12
Chemical Weeding 3 2
Hoeing 1 14
Fertilizing 3 11
Handling 2 13
Pruning 1 30
Coffee stem regulation 1 6
Cover Crop Plating 1 10
Shade regulation 1 10
Lichen removal 1 10
During matured coffee maintenance, the wage rate per piece of matured coffee tree is
 Birr 30.00
 75-80 piece of coffee tree in one jornata
On average, labour could work 3 journata per day. i.e. ,Birr 90/day
Source: Haile & Alem Int. PLC and other private farms

Table 7. 12: Harvesting and Processing

Description Frequency Md/Qt

Red Cherry picking 1 4
Dry cherry Picking 1 10
Pulping & Drying 1 7
Drying & Hulling 1 2
Loading & unloading and Weighting and bagging 1 1

 Transportation cost if the transaction is held through ECX will be determined in consideration
of the distance between coffee plantation farm and ECX centers.
On the other hand, if investors directly export their coffee produce, the cost will depends on the
selling agreement commenced between the seller and buyer.
 The number of coffee seedling per hectare varies with soil type, types of varieties, spacing, and
altitude. It becomes 2500 and 3300 when the spacing becomes 2*2 and 1.5*2 m respectively.
 1kg of coffee seed = 4000 number of seeds
 Germination rate is assumed to be 65- 70%

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 Seed rate-----------------------------------------------0.88 kg/hectare
 Seedling loss rate ------------------------------------ 4%
 Average shade tree = 50 per hectare.
 1 role of polythene tube, i.e., 30 kg can cover --------------------------------400 seedlings by
cutting to 18cm-20cm height per seedling.
 Shade tree ------------------------------------------------------------50/ha
 Red cherry to wet processes parchments coffee------------------20%
 Parchment coffee in to washed clean coffee----------------------80%
 Red cherry to Brown coffee-----------------------------------------32%
 Brown coffee to clean coffee-for:
Sidama coffee-----------------45%
For Keffa coffee-------------42%
 The weight of a seedling-------------------------------------------1.5kg
Table 7.13: Machinery Requirement for Operation

Mature coffee Harvesting and Fuel Consumption

Description
maintenance processing Rate (Lt/hr)
Trans inputs & farm tools 0.5Th
Coffee Cherry Transport 3Th
Based on specification
Input & produce transport 25Th
of the machinery.
Pulping red cherry transport 10qt/hr
Hulling dry cherry transport 20 qt/hr

Table 7.14: Chemicals Fertilizers for Mature coffee Maintenance

Nutrient (Kg/ha/year) Fertilizer rate kg/ha/year

Coffee Yield N P K UREA DAP TSP KCL NPK

Q/ha. 46-0-0 18-46-0 0-46-0 0-0-60 20-10-10
4 84 36 60 170 78 78 100 420
6 112 48 80 225 104 104 134 560
8 140 60 100 280 130 130 167 700
10 168 72 120 366 157 157 840 840
12 196 84 140 390 183 183 234 980
14 224 96 160 450 209 209 267 1120
16 252 108 180 505 235 235 300 1260
18 290 120 200 560 261 261 234 1400
N.B: Coffee fertilizer requirement depends on the plants productivity, shade type, soil condition and
plant population.

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 Other Operational Cost after Four Years Includes

 Salary of Permanent Employee

 Uniform of employee
 Travel per-diem of Employee
 Transportation of Inputs
 Land lease cost
 Insurance
 Depreciation of fixed asset
 Insurance
 Repair and maintenance
 Fuel and oil for machinery
 Clinical Materials
 Packing materials for inputs and
 Utilities

7.7. Coefficients for Investment and Operational Costs

A. Fuel and Oil consumption

 Tractor’s fuel and oil consumption

It will rely on critical factors such as field operation, model and specification of tractor and its
accessories set by the manufacturers, etc.

 Generators’ fuel and oil consumption

Table 7. 15: Generators’ fuel and oil consumption

Description Fuel and Oil

Lit/hr
Generator (diesel) As per the manufacturer’s specification

Generator is employed in time when there is an electricity interruption and/or in areas where there
is no supply of electricity.

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 Fuel Cost of Vehicles

Fuel and lubricant oil for vehicle depends on the distance purpose of the vehicles intended for.
However the Fuel cost:

a) For Automobile: 13-15 Km per litre

b) For Service Vehicle : 0.013559 lit/seat/km
c) The cost of oil and grease: 2% of fuel cost
Table 7.16: Fuel Cost of Service Vehicle

Gross Pay Load Distance Fuel Fuel Consumption Average

Vehicle travelled in one Consumption per Km for each ton
lit/km/ton
Weight liter per Km of load

7.5 Ton 3.124 ton 5.840 km/lit 0.171 lit/km 0.055 lit/km/ton 0.035

12 Ton 6.311 ton 5.500 km/lit 0.182 lit/km 0.029 lit/km/ton

18 Ton 10.198 ton 4.540 km/lit 0.220 lit/km 0.022 lit/km/ton

 Fuel cost of Motor cycle

The distance covered by motor cycle per year depends on the distance between the farm site and
farm place and the nearest town. The fuel cost is then calculated based on the specification made by
the manufacturers.
B. Clinic Materials
Table 7.17: Clinic Materials

Description UOM Price/unit ( Birr)

Hand Glove pcs 38.95
Eye Goggles pcs 110.00
Respiratory Mask pcs 17.03
Dust mask pcs 63.00
Plastic glove pcs 58.89
White Gown pcs 256.00
Basket pcs 40.00
Source: Field Survey

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 C. Employee Uniform
Table 7. 18: Employee Uniform

Unit of Current Price in Birr

Sr. No. Description Measure From Limmu From Bebeka Average Price
Coffee Farm Coffee Farm in birr
1 Kaki Overall Pcs 187 224.40 205.70
2 Caport Pcs 330 396.00 363.00
3 Tetron Overall Pcs 217.26 260.71 238.99
4 Coat & Trousers Pcs 197 236.40 216.70
5 Shirt Pcs 216.7 260.04 238.37
6 Trousers & shirt Pcs 217.8 261.36 239.58
7 Kaki dress Pcs 346.5 415.80 381.15
8 Kaki Gawn Pcs 231 277.20 254.10
9 Kaki Trouser Pcs 424.78 509.74 467.26
10 Warm Jaket Pcs 350 420.00 385.00
11 White tetron Gawn Pcs 225.5 270.60 248.05
12 Kaki Cape Pcs 13.13 15.76 14.45
13 Kaki shirt Pcs 231 277.20 254.10
14 Head Band Shash Pcs 8.25 9.90 9.08
15 Kaki Approan Pcs 250 300.00 275.00
16 Leather Boot Shoes Pcs 366.3 439.56 402.93
17 Rubber Boots Pcs 95.7 114.84 105.27
18 Normal Leather Shoe Pcs 182.69 219.24 200.96
19 Plastic Glove Pcs 58.89 70.67 64.78
20 Leather Glove Pcs 64.76 77.72 71.24
21 Umbrella Pcs 143 171.60 157.30
22 Respiratory Mask Pcs 17.02 20.43 18.73
23 Rain Coat Pcs 220.76 264.91 242.84
24 Mouth Muff Pcs 28.05 33.66 30.86
25 Nose Muff Pcs 28.05 33.66 30.86
26 Soap Pcs 11 13.20 12.10
27 Eye Goggles Pcs 110 132.00 121.00
Source: Limmu and Bebeka Coffee Farm

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 D. Packing Materials
Table 7. 19: Packing Materials

Unit Price (Birr)

S.
Description Unit Limmu Coffee Bebeka Coffee Average Price
No
Farm Farm in birr
1 Kesha/Sacks(Jute Bag) Pieces - 60.00 60.00
2 Polythen tube m 59.13 80.00 69.57
3 Polytleen sheet Kg 86.80 80.00 83.40
5 Hessian Cloth m - 10.00 10.00
6 White plastic sheet m 64.67 - 64.67
7 Lining String m 69.56 - 69.56
8 Fiber String kg - 33.91 33.91
9 Galvanized wire kg 6.74 - 6.74
10 Mesh wire Roll 3,600.00 - 3,600.00
11 Shade net m - 4.00 4.00
12 Plastic Bucket Pieces 65.00 104.35 84.68
13 Basket Straw Pieces - 9.17 9.17
Source: Limmu and Bebeka Coffee Farm

Twisted yarn

4twisted yarn = 1kg

1kg = 96-120bag sewing

E. Daily labourer required

 For machine related work
 Damping of coffee cherry in hulling machine…………………25qt /md/12hr
 Filling and Weighting (Scaling ) the bag……………………..100qt/md/12hr
 Transport and arranging packed coffee in store……………..100qt/md/12hr
 For non-factory related work
 Sewing the bag………………………………………..…….75-100qt/md/12hr
 Tag writing daily labor……………………….……………..400 tag/md/8hr

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Table 7.20: Insurance

Description Types of Insurance

Coffee plantation Fire, wind, drought and snow rain
Buildings Earth quake and fire
Machinery & equipment and Furniture Fire
Vehicles Accidents( life and property damage)
Working hrs and work man composition for employee
Life insurance
and 24 hrs personal and work team for managers

Table 7.21: Repair and maintenance

Description Percentage per annum

Coffee laboratory apparatus 5%
Buildings 2%
Coffee machinery 5%
Vehicle 5%
Generator 5%
Water pump 5%
Office equipment and furniture 2%

Depreciation and amortization for pre-production cost, building, vehicle, machinery and equipment
and furniture and fixture

Table 7.22: Depreciation rate

Description Expected life year % age of depreciation per annum

Coffee Plantation 25 4%
Coffee laboratory apparatus 10 10%
Buildings 20 5%
Vehicle 5 20 %
Generator set 10 10 %
Coffee processing Machine 10 10 %
Office equipment & Furniture 10 10 %

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 7.8. Working capital requirement
Table 7.23: Working capital requirement for production

Description Period
Salary and wage Annually
Inputs Annually
Travel and Per dim Annually
Uniform of employees Annually
Allowance, bonus and other benefit of employees Annually
Utilities Annually
Packing materials Annually
Stationery and P.T.T Annually
Fuel and lubricant Annually
Insurance Annually

46
REFERENCE
 Haile & Alem Int PLC
 Coffee - Wikipedia, the free encyclopedia.htm
 Coffee and the environment - Wikipedia, the free encyclopedia.htm
 Ethiopian Coffee & Tea Development & Marketing Authority
 Ethiopian Coffee Production and Production Potential and Export Marketing, July 2002
 Ethiopian Agricultural Research Institute Addis Ababa
 FAO Stat
 Girma Adugna, Coffee Diversity and Knowledge, 2008
 International Coffee Organization
 International Trade Center
 Jimma Agricultural Research Institute
 Jan C. von Enden “Improvement of Coffee Quality and Sustainability of Coffee Production
in Vietnam”
 [email protected]
 Parameters and Coefficients Ethiopian coffee growers, producers and exporters association,
April, 2008 A.A
 Tepi Coffee Plantation, Coffee Plantation Development
 USDA Annual Coffee Reports

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