Mark Dodd, Ermera – The coffee trees in this prime highland growing area are laden with berries, promising aficianados of arguably the world's finest arabica renewed supplies from East Timor and a welcome flow of cash to its destitute population.

Coffee is at least one industry that looks like recovering quickly from the militia violence which devastated East Timor's towns and villages last year and displaced almost half its population. Seasonal rains have come on time to spur growth.

A grant from the Norwegian Government has put contractors to work repairing roads which will enable farmers and buyers to take the crop down to the capital, Dili.

Production of its highly prized and almost unique organic-grown coffee should reach about 8,000 tonnes this year, earning an estimated $A30 million. The territory's coffee is produced almost entirely by small-holder farmers, employing several thousand people. This makes it the largest industry in a country where 80 percent of the population is out of work.

This year's harvest was looking good, said Mr Sam Filiaci, head of the Dili-based National Co-operative Business Association, the largest coffee buyer and processor in East Timor.

The non-profit organisation was set up with United States aid in 1994 to wrest control of coffee-purchasing and exports from firms linked to the Indonesian military. It promoted the fine arabica quality of 90 percent of East Timor's crop, and the non-use of artificial fertilisers and pesticides, to make it a speciality coffee for clients such as the Starbucks coffee-house chain in the US.

In the militia violence following last year's United Nations-run vote on self-determination, the association suffered losses worth $A3 million. Its head office in Dili was looted and seven houses burnt. Weighing scales, tarpaulins, coffee bags and other equipment worth about $A900,000 was wrecked or stolen. About 600 tonnes of coffee worth $A1.8 million was also looted from warehouses in Dili. "We took a big loss," Mr Filiaci said.

The association now hopes to expand production and add value to the coffee crop before export to increase returns to the farmers. It puts the freshly picked coffee cherry through a "mild-wash" process that adds 30-40 percent to the value of the crop exported as green beans. But many farmers sell their crop to traders who take it to Indonesia for processing, and fail to capture full market potential.

With proper farmer education, tree pruning and a large-scale replanting scheme to replace old trees, Mr Filiaci said he believed East Timor's coffee production could be tripled within five to seven years.