Yidnekachew Dabessa good food award winner, USA 2018

https://mudhouse.com/won-2018-good-food-award/

YIDNEKAHEW DHABESSA COFFEE PLANTATION

This study intends to establish a commercial coffee farm in Ethiopia, Jimma Zone of Oromia National Regional State, Limmu Kossa Woreda, located about 75km away from the town of Jimma.  The farm is planned to be developed on 106 ha of land, of which an average of 1,219 quintals of clean coffee will be annually produced at full maturity.

According to recent data from ICO, in international market, the world total   demand for coffee was estimated at 135 Million bags and actual supply was remained to be 121 million bags. The deficit was about 8%. And ICO’s forecast reveals that the world demand is expected to grow by about 3% in the year 2010/11.  

BACKGROUND INFORMATION

Ethiopia, a birth place of coffee Arabica, is the first and fifth largest coffee producer  in Africa and the world, respectively. Coffee is the major export commodity cultivated in Ethiopia. Coffee grown in Ethiopia is well known all over the world for its excellent quality and flavor, Mocca.

According to the information provided by the Ministry of Agriculture and Rural Development (MOARD), Ethiopia earned close to 528  million US dollars, by exporting 172,000 tons  of its  total production during the current budjet year ,2010. Annual production of the country is estimated at 400,000 tons of clean coffee.

At present, the contribution of  the coffee sub sector in driving foreign exchange earnings in the national foreign exchange earnings  is estimated  to be  40%. Moreover, coffee contributes 25% of GNP, 10% of GDP, and 25% for employment oportunity for the nation as a whole.

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The total  area is planned to be developed   in three consecutive years. Thus, owing to the nature of maturity period of coffee tree - which starts to give yields right from the 4th year - revenues will commence to accrue at the beginning of the 4th year from the 1st year plantation.

The total investment capital required to reach full capacity is Birr 7,718,602 and that is planned to be invested   fully in 3 years of implementation period. Of the total investment cost, it is envisaged that 40% (Birr 3,087,441) be financed through own source and the rest 60% (Birr 4,631,161) is planned to be financed through bank loan.

The project is financially viable with an internal rate of return (IRR) of 49 % and a net present value (NPV) of Birr 55.4 million, discounted at 8.5 %.

The implementation of the project becomes very necessary due to the fact that it will have a significant effect in driving foreign exchange earnings for the national economy by exporting about 95% of its product to the global market. Moreover, the project will create employment opportunity for about 201 citiznes of the country at full maturity.

The project, DHABESSA COFFEE PLANTATION, was found in 2008 by Yidnekachew Dhabessa, a dedicated Ethiopian coffee farmer and entrepreneur, born in the same locality and having an experience of over 15 years in coffee production. As a member of  Wolensu peasants association, Yidnekachew annually earns an average income of about  Birr 300,000 from 12 hectares of matured coffee farm.  As he is a life time hard worker, since attaining  his younger age, Yidnekachew, has grown and transformed himself from a simple coffee farmer to a large scale investor.

Despite the enormous potential in the production and marketing, the country has not benefited much from the coffee sub sector; the benefit is by far lower than what the country deserves. As about 95% of the production comes from the small holder peasant section, which is based on traditional methods of production and poor management, Ethiopian coffee is unable to actively compete in the international market. The contribution of commercial farms in coffee production does not exceed 5% of the total annual production.  The total area of commercial coffee farms is about 52,138 ha. Of which about 31,138 hectares of land belongs to 136 private investors and the remaining 21,000 ha by the state farms. Because  of this  and other related factors,  the share of Ethiopia in the world market has become too small when compared with  other coffee producing countries. Even though the country has exhibited an annual increase in production as well as export,  its  annual contribution to  the world coffee export is still not more than  4%  . The major factors, among many,  are low  productivity owing to the dominance of traditional technology and farming system, existence of disease prevalence (Coffy Berry Disease, the most common in Ethiopia), producing and supplying poor quality coffee, scattered nature of small holder farmers regarding economies of scale in production and quality maintenance

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25,600,60,1,3000,5000,25,800
90,150,1,50,12,30,50,1,70,12,1,50,1,1,1,5000
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