Where is my coffee?!! Has she gone to Rwanda to buy the beans?!
(Miranda Priestly played by Meryl Streep in The Devil Wears Prada)

Rwanda seems to be in the news today! First of all, a piece from Sala Kannan writing for "The Sleuth", one of Agora Financials stable of investment newsletters, showed up in my inbox. The article used the growing of premium coffee beans as an example of how economies can surge in the aftermath of war.

Then later in the evening came a "Wide Angle" piece on PBS featuring the role of women in the recovery of post-civil war Rwanda. And what should be covered in one of the segments but the story of widow Epiphanie Mukashyaka who started her own coffee growing business. (You can watch the Wide Angel piece of the Rwandan woman who established a coffee growing business in the aftermath of the Rwandan massacre online).

Going back to Sala Kannan, she writes:

Chances are, your gourmet coffee comes from Rwanda...Rwanda, a small East African nation...has emerged from a treacherous internal ethnic conflict that left nearly a million people dead. After a terrible genocide ended in 1994, Rwanda established a constitution and an elected government. We can safely say that a political institution is in place. Does Rwanda have an established corporate institution? As far as coffee production goes, it does. Not only has the U.S Agency for International Development pumped $10 million into Rwanda’s coffee market to improve quality of production, it has also set up farming cooperatives.

The cooperatives provide the link between the coffee farmers and gourmet roasters all over the world. And Rwandan farmers get a fair price for their coffee. The cooperatives have done wonders for the nation’s coffee quality and its exports.
According to a New York Times article: "Maraba [was established in] 2001...[was] Rwanda’s first coffee cooperative and the initial experiment of A.I.D.’s Partnership to Enhance Agriculture in Rwanda Through Linkages.

"The partnership, which is known by its acronym as the Pearl project and is directed by Timothy T. Schilling of Texas A&M University, has since made a 300 percent return on its investment, with 90 percent of its revenue being paid to farmers. Pearl has promoted the production of higher-grade coffee by organizing farmer co-ops and training their members in farming techniques, coffee processing, quality control, marketing and by building relationships directly with the roasters who buy coffee...

"Five years ago, all Rwandan coffee sold at the C-grade, or lowest-quality, price. Now, demand for fully washed Rwandan coffee (about 7 percent of the crop) far exceeds supply. ‘The emergence of Rwandan specialty coffee on the global market is stunning,’ said Michael D. Ferguson, a spokesman for the Specialty Coffee Association of America, a trade group in Long Beach, Calif. ‘Everyone inside the specialty coffee industry is excited about it.’"

USAID now has a special agreement with coffee giant Starbucks, whereby it sells premium coffee from Rwanda. The roast is appropriately called "Rwandan Blue Bourbon." Costco (COST: NASDAQ) will also start selling coffee from Rwanda later this year.

Before coffee cooperatives were established in Rwanda, farmers had little reason to cultivate coffee. In the mid/late 1990s, farmers returned their war-ravaged farms, but cultivated other crops that were cheaper and took less time to harvest. And whatever coffee was grown was of poor quality. Before the savage genocide, 60% of Rwanda’s total exports were coffee. This is a fertile land and is called the "land of a thousand hills" for a reason -- the hills, soil and climate are perfect for coffee growing. But after the genocide, Rwandan coffee exports declined to 30% of the national total. Today, coffee accounts for 30% Rwanda’s total exports and is a $35
million industry. Besides, Rwanda’s coffee is now marketed as premium quality.

So as far as coffee production goes, both political and corporate institutions in Rwanda are conducive. But is there a free market? President Paul Kagame recently liberalized his nation’s coffee trade and has made coffee exports one of his top priorities. Not only is there a free market for coffee trade in Rwanda, the global coffee market is also helping things. After years of depressed prices, coffee has now joined the global commodities boom. According to the International Coffee Organization, mild Arabica coffee sold for 80 cents a pound in 2004. Today it sells for $1.05 and coffee prices recently hit six-year highs.

Social, political, economic and global environments have all come together to lift Rwanda’s coffee industry. Its achievements are just another example of the robustness of a postwar economy. It is an example of the abundance of its land. And more importantly, it is an example of the promise of Africa...Sala
Kannan

Great to think that a country that was so ravaged by war is finding the growing of premium coffee beans as one of the ways to grow its post-war economy. I'll be looking out for the Rwandan coffee beans at Costco.

Read about the two varieties of coffee beans at EspressoCoffeeSnobs.com