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Topic: Ethiopia ECX open letter (8 msgs / 657 lines)
1) From: Tom & Maria - Sweet Maria's Coffee
This is probably far more information than you want, but it was =
written after SCAA by the CEO of the ECX to the importer and roaster =
community:
April 17, 2009
OPEN LETTER TO THE BUYERS OF ETHIOPIAN SPECIALTY COFFEES
As I head home from my first, though I am sure not last, annual SCAA =
Event, I am overwhelmed by a number of emotions, the first of which =
is a feeling of great humility at the honor and genuine love so many =
of you have for our very special Ethiopian coffees, the bounty of our =
earth, the fruit of the toil of millions of our country men and =
women, our gift to the world. As I have witnessed firsthand your =
incredible efforts, your tenacity, your art in doing what you do, I =
have learned that you are artisans of the highest order, and our true =
partners in promoting this treasured product of which we are joint =
stewards. In the world we inhabit today, as our global citizenship =
deepens, our partnership becomes increasingly one of equals striving =
for a common vision, and I feel that, in this first engagement =
between the Ethiopia Commodity Exchange and your Association, we have =
taken the important first step.
As your outgoing association President, Mark Inman, expressed in his =
remarks at the Opening Ceremonies, "Change can be upsetting. Change =
can be very scary. But change can be very good and often necessary." =
And he was merely referring to the reorganization of the annual 3-day =
Exhibition! So it is difficult to even fathom the extent to which the =
systemic transformation of the marketing of an entire country's =
coffee production, and an important origin country at that, can be =
profoundly discomforting for thousands if not millions of folks, =
including yourselves, who are or will be affected in some way or =
other in this process.
Like you, we at ECX are deeply passionate about what we do, as =
mavericks in our own way, questioning the fundamental order of =
things. Our passion is not inspired by an arrogance that we have all =
the answers, but rather that we are asking the right questions, =
questions that matter to all of us in this industry. These questions =
address "how can we build integrity into our market, into our =
product, and into each transaction? How can we add value that =
translates to the smallest actor in the market? How can we provide a =
neutral service that enlightens and enhances all market players? How =
can we transform the choices and hence the lives of our clients? How =
can we bring dignity and meaning to our marketplace, through building =
trust and respect?" Finding the answers to these questions is our =
labor of love, worked, reworked, and reworked again through hours of =
collective discussion, through creative churning, through daring to =
try and daring to fail.
An icon of your industry, whose lifetime of commitment speaks to his =
own personal integrity, Ted Lingle, taught us in his Keynote Address =
that "standards are the basis for achieving integrity". Indeed, an =
industry without standards and guiding rules simply cannot withstand =
the test of time nor weather the storms that inevitably come. In my =
own work on making markets work, I have been greatly inspired by =
Nobel Laureate American economist Douglass North whose classic =
analysis of world economic history identified the key to the =
societies which succeeded as their ability to devise =
"cost-effectively enforceable Rules of the Game". These rules of the =
game are the informal norms, unspoken ethics, religious and moral =
codes, formal rules, standards, and laws by which we live and =
interact in our various games. One of the greatest global games (and =
there are many, of course, war, science, environment, cultureŠ) is =
the market. And in our global coffee market, from the farmer at one =
end and the consumer at the other, goods, technology, and money flow =
along the chain, fuelled by information, power, and the norms that =
drive the allocation of power and the ensuing economic returns or =
value in the chain. So let us think of ECX as the embodiment of the =
"rules of the game" for our part of the global coffee market chain.
I would like to share with you our Vision and Mission, developed =
collectively by the 137 employees who make up our company. Our ECX =
senior management team is composed of seven Ethiopian-American and =
three non-Ethiopian seasoned industry professionals who have given up =
plum corporate careers in Accenture, Merrill Lynch, Fannie Mae, =
private securities law, DHL Express, London Financial Futures =
Exchange (LIFFE), MCX-India, in the US, Europe, and elsewhere, to =
join our exciting effort. So your coffee is in good hands. This in =
itself is change. The ECX Vision over the next five years is "to =
transform the Ethiopian economy by becoming a global commodity market =
of choice." The ECX Mission is to "connect all buyers and sellers in =
an efficient, reliable, and transparent market, by harnessing =
innovation and technology, and based on continuous learning, =
fairness, and commitment to excellence."
ECX for us represents the new Ethiopia, the Ethiopia of =
possibilities. This is not a command economy effort nor is it yet =
another dusty African bureaucracy. It is about a team of committed, =
passionate, top-notch, international caliber professionals working =
intelligently on finding cutting- edge real market solutions to real =
market problems, the problems you and others face throughout the =
market chain. As you engage with us, you will find we are a listening =
and learning organization, evidenced by no less than thousands of =
hours to date consulting with hundreds of our national stakeholders. =
We are a nimble and highly responsive organization, demonstrated by =
our willingness and ability to nearly entirely re-vamp certain parts =
of our service or system in response to the expressed needs of our =
market stakeholders even after our launch. Finally, we are a highly =
competent and bold organization, daring to go where others have not =
yet attempted in Ethiopia and even elsewhere.
To illustrate, we have designed and developed ourselves, in what =
would otherwise have been a multi-year and multi-million dollar =
effort, a functioning electronic warehouse receipt system, linked to =
8 coffee warehouses at present with 40,000 tons capacity, in just 4 =
months. We have created the only national payments system in our =
country and built electronic banking gateways to 7 commercial banks =
in less than 8 months, creating the capacity to clear and settle =
payments within less than a day of trade, a first in Ethiopia's =
financial history. We transmit market data live to farmers and =
traders within 4 seconds of trade, using electronic displays =
currently in 14 rural market sites, and to our website for global =
reach, set to expand to 40 display sites by October 2009 and 200 by =
end 2010. Along with our existing radio and print media, we will soon =
be launching SMS mobile texting of real time market data to =
registered clients. We have designed and built an automated trading =
back office system that manages trading orders and reconciles trading =
of 256 types of coffees on a daily basis. There is no exchange in the =
world that has this kind of flexibility in trading contracts. We have =
traded over 52,000 tons of coffee since December and handled deposits =
of over 170 million dollars without a single default or trading order =
error. We have recruited, trained, and certified 376 private sector =
Exchange members and their 1146 clients. We currently operate 2 fully =
equipped coffee laboratories with 8 cuppers and will expand to a =
total of 9 laboratories with 40 fully certified Q graders by October =
2009. And the list goes on. We operate on a commercial basis, relying =
on revenue generation and product development, like any business. Our =
achievements of this scope and speed in the past eighteen months are =
based on tireless effort, often 14 hour days, and we are very proud =
of our service delivery record. More importantly, we are very proud =
that these efforts are not dictated by narrow interest or =
bureaucratic dictate, but rather by our own volition, our pride and =
love of country, and our intellectual and professional ambition to =
transform our little corner of the earth.
As we discussed in Atlanta, ECX is now in a position to shift efforts =
to directly addressing the design and implementation of an ECX =
specialty coffee spot trading mechanism. As we embark on this =
process, our commitment to you and to working with you rests on three =
principles:
Our relationship must be based on mutual respect and a commitment to =
constructive dialogue, with the discipline to engage on a reasoned =
assessment of the facts, and not on uncontrolled and possibly =
destructive emotional reactions. Respect requires a commitment to a =
relationship of equals, recognizing our mutual complementarities and =
needs. Only by listening to each other and learning from each other =
will we be able to build the trust needed to become effective =
partners.
We will agree and deliver together on a set of time-bound =
deliverables. Our current agreed concrete joint plan and timetable =
focuses on:
o An assessment of outstanding contracts (contracting parties, =
volume, and delivery date) to be delivered by SCAA to ECX by April =
24, in order to table to relevant authorities for action/decision =
before or by mid-May;
o A joint forum of SCAA-ECX to discuss the ECX specialty coffee =
trading design by late June-early July (either in Addis Ababa or US); =
and
o The launching of Q specialty coffee certification and trading =
within ECX by October 2009.
In order to be efficient and effective, we will appoint a joint task =
force of committed individuals from among specialty buyers and =
exporters to participate with ECX in ongoing dialogue and technical =
interaction on design. We would request that you designate five buyer =
representatives by April 28 so that we can launch the Task Force on =
May 1 if this is acceptable. In conclusion, I am deeply excited by =
the possibilities. Thank you again for hosting my first SCAA =
experience. I am convinced that what we are building is far more =
important than our individual interests today but rather will be the =
start of something that will outlive any of us and evolve in ways we =
cannot yet imagine as the specialty coffee industry continues to =
transform and to change our relationship to the simple cup a' joe. It =
will undoubtedly have the potential to spill across our borders to =
others. Change is good. It can even be seen as necessary. Or, as we =
learned in the wonderful Symposium closing lunch session, innovation =
is love, and love can move the world.
With my warmest regards,
Eleni Z. Gabre-Madhin, PhD
Chief Executive Officer
Ethiopian Coffee Exchange
-- =
-Tom
"Great coffee comes from little roasters" - Sweet Maria's Home Coffee Roast=
ing
               Thompson & Maria -http://www.sweetmarias.com     Sweet Maria's Coffee - 1115 21st Street, Oakland, CA 94607 - USA
             phone/fax: 888 876 5917 - info_at_sweetmarias.com
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2) From: Floyd Lozano
It's a lot less info than I want.  Let me paraphrase:
blah blah new middleman yadda yadda quickly built organization hommina
hommina lucrative enough to lure top execs from plum positions the
thing the thing the thing great technology blah blah blah
I just want to know how I'm going to get my Koratie WP or my Menno's
Misty Valley and not have it mixed up with Farmer 1-9999's coffee and
sold in a big pile at market rate.  I didn't see that part in the
letter.
-F
On Sun, Apr 26, 2009 at 7:44 PM, Tom & Maria - Sweet Maria's Coffee
 wrote:
<Snip>
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3) From: Jeff Kilpatrick
Interesting read.  I'm glad to see at least an appearance of caring about
the specialty market and second his call to rational responses, rather than
emotional ones.  The fact that specific steps for moving forward have been
proposed seems positive.  That said, one line didn't fill me with
confidence:
<Snip>
ill
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I hope these three companies from which they draw their executives don't
constitute them putting their "best foot forward," given their respective
very public failures over the past years.
-Ethiopian addict
On Sun, Apr 26, 2009 at 6:44 PM, Tom & Maria - Sweet Maria's Coffee <
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4) From: Doug Hoople
Thanks for posting this, Tom.
A lot of fancy finery and lofty sentiments in the text.
But the facts speak for themselves. 52,000 tons transacted in just over a
quarter, and 8 cuppers.
It's multi-national corporate efficiency at high volumes. Does that eally
square with the mission of the highest possible quality through individual
attention at the farm level?
Somebody sold them a commodities exchange trading system suited for wheat
and soybeans, driven by a bunch of suits with pedigrees from high-profile
businesses that have nothing at all to do with coffee, and they've
re-jiggered their whole supply chain to fit that model. It should have been
the other way around, with a trading system built organically around a
supply chain that reflects the underlying diversity of what they're selling.
It's a big step forward for agribusiness in Ethiopia, and a sad day for the
small farmer. And for us.
Just my $0.02.
Doug
On Sun, Apr 26, 2009 at 4:44 PM, Tom & Maria - Sweet Maria's Coffee <
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5) From: Phil Palmintere
<Snip>
square with the mission of the highest possible quality through individual
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Your question, of course, is rhetorical... but the answer is as plane as
day:
"... importantly, we are very proud that these efforts are not dictated by
*narrow interest* or bureaucratic dictate, but rather by our own volition,
our pride and love of country, and our intellectual and professional
ambition to transform our little corner of the earth..."
I think he would put "...highest possible quality through individual
attention at the farm level" in the category he defines as "narrow
interest."  
So the answer is a clear "no."
His mission, it seems to me, is one of "pride of country... transform our
little corner of the earth..."  I won't call that "greatest good for the
greatest number" per se but more of "driving their overall brand image,
kiloton after kiloton" rather than individual attention to detail at the
farm level.
When you blaze a trail, as he seems to want to do, and stand as a middleman,
you can charge a hefty toll per kiloton.
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6) From: MikeG
Thank you Floyd.
I lost interest in the quoted text about two sentences in.  Your
summary was succinct enough for my needs.
Mike
On Sun, Apr 26, 2009 at 7:57 PM, Floyd Lozano  wrote:
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7) From: J.W.Bullfrog
 Maybe I'm wrong, but the last part of this seems to ackownledege the need
to handle 'special lot' coffees via a differnt process. Yeah there is a lot
of "blah blah" but he seems to have gotten the message about how we value
their specality coffee.
Just my $0.02
Ben
<Snip>
-- 
I've seen things you people wouldn't believe.
Attack ships on fire off the shoulder of Orion.
I watched C-beams glitter in the dark near the Tannhauser gate.
All those moments will be lost in time, like tears in rain.
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8) From: Andy Thomas
That was my impression, too. Just hope it is sincere and that they really a=
ct on it.
From: J.W.Bullfrog 
To: homeroast
Sent: Thursday, April 30, 2009 9:58:21 AM
Subject: Re: [Homeroast] Ethiopia ECX open letter
Maybe I'm wrong, but the last part of this seems to ackownledege the need
to handle 'special lot' coffees via a differnt process. Yeah there is a lot
of "blah blah" but he seems to have gotten the message about how we value
their specality coffee.
Just my $0.02
Ben
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-- =
I've seen things you people wouldn't believe.
Attack ships on fire off the shoulder of Orion..
I watched C-beams glitter in the dark near the Tannhauser gate.
All those moments will be lost in time, like tears in rain.
Homeroast mailing list
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Homeroast community pictures -upload yours!) :http://www.sweetmariascoffee=.com/gallery/main.php?g2_itemId=7820
      =
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