ADB Supports Development of Timor-Leste’s Coffee Sector | Asian Development Bank

ADB Supports Development of Timor-Leste’s Coffee Sector

News from Country Offices | 7 December 2016

DILI, TIMOR-LESTE – The Asian Development Bank (ADB) has approved a $225,000 grant to help reduce poverty in Timor-Leste by funding long-term improvements in the volume and quality of coffee produced by smallholder farmers.

The ADB assistance - from the Bank’s Technical Assistance Special Fund - will support the government’s efforts to supplement ongoing development partner-funded coffee rehabilitation programs by preparing a coffee sector development plan, the implementation of pilot activities to support the plan, and the establishment and initial activities of the Timor-Leste Coffee Association.

“Coffee is grown by almost one-third of all Timorese households and has been the country’s largest non-oil export for the past 150 years,” said David Freedman, Country Economist from ADB’s Timor-Leste Resident Mission. “Coffee has the potential to play an important role in the future development of Timor-Leste, providing certain weaknesses in coffee production are addressed.”

Political conflict in Timor-Leste and under investment in the coffee sector in 1975-1999 contributed to a loss of farming skills and left a legacy of aged trees. Since 2000, numerous reports by the government and its development partners have also identified a lack of industry coordination as a constraint to the development of the coffee sector. Progress has been made in training farmers and rolling out replanting programs but much more work needs to be done.

Key activities to be funded by ADB’s grant include preparation of a comprehensive coffee sector development plan to be implemented in partnership with the private sector. This plan will finance coffee farm rehabilitation and training and development in the sector. Preliminary activities under the plan such as analysis of planting materials and trials to grow new varieties of coffee will be explored. The funds will also support the first board meeting of the newly established Timor-Leste Coffee Association which will provide training and mentoring to the association’s president, treasurer, directors, and other senior representatives.

The Timor-Leste Coffee Association – which gathers everyone along the coffee production and distribution chain – is expected to significantly improve coordination between private sector players in the coffee industry, with the government and donor agencies in Timor-Leste, and boost links to international markets, The association will hold its first board meeting in early 2017.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.