Update by Max Nicholas-Fulmer: In the nearly four years since this article was originally published, the C market enjoyed a modest recovery followed by what is now one of the longest protracted periods of depressed prices in decades. Indeed, on April 11th the market made a 15-year low. We are now in, what was at the start of the millennium referred to as “Coffee Crisis,” where the risk of farmers opting to simply not harvest their coffee at all becomes very real. While the scale of this challenge is enormous, even the smallest intentional actions can, if taken collectively, add up to real progress. Here, Jennifer Huber relates her personal experience conceptualizing the issue, and offers some simple wisdom that all in the industry ought take to heart.
A number of recent events have me thinking back to my last Development Studies class before graduation. As we recapped the themes and history of the many failed development projects in the Global South; the depth of those failures, and the massive inequalities that persist, left me with a sense of doom. What is one to do? To that question, my teacher had an answer that was so simple: just do something. Though the issues are complex and difficult, if you are informed and working towards positive change, you will make an impact. It’s easy to feel overwhelmed while looking for the solution to global poverty, but the reality is that there are many solutions and many routes to take.
About a month ago, I was drinking coffee with Scott Brant, founder of the Coffeelands Foundation (formerly of Montana Coffee Traders). In the course of the conversation, we talked about real estate and the coffee market price, which Scott recounted was around $1 per pound in the early 1980s; it got tough for roasters when it hit $2.50 in 1986. You may notice the market has been in a similar range over the last year. The juxtaposition of the massive inflation of home values in the United States, with the complete lack of inflation for global coffee prices via the market over the last 25 or more years left me flummoxed. Inputs for coffee production have increased, prices consumers pay have increased, but the prices that the vast majority of coffee producers receive has not. This isn’t news to any of us, but something about this conversation and the disparity hit me over the head.
Fast forward a few weeks, I am in Peru, and the market tanks to $1.20 per pound with fears of it declining further. There are a lot of unhappy people. Heads hung low. Stress.
Of course, low prices for small farmers lead to a number of issues: inability to make ends meet, or even eat in the off-season, difficulty finding the resources to improve their farming business and thus improve their prices, little access to health services, next-generation farmers choosing to move to the cities rather than farm, and so on. What is one to do? Again, the answer is to do something; be informed and act. There are many bright and impassioned people in the coffee industry working towards getting producers the prices that they deserve, and there are a lot of non-governmental organizations working to offset the low prices that most farmers receive by providing additional services to help them through the year—to keep them fed in the off season, to get them access to health care and education, to empower women, etc.
You, the roaster, can easily help with this side of things. We’ve mentioned it before, and at the risk of sounding like a broken record, I’m going to mention it again: Royal Coffee has set up an accounting system whereby you can elect to donate per pound 1¢, 2¢, 10¢, 20¢, or whatever you choose, to either the Coffeelands Foundation (which funds various organizations helping farmers at origin) or Grounds For Health (which provides access to cervical cancer screenings and treatments at origin). With coffee prices as low as they are now, maybe you can find some room in your budget for this tax deductible donation.
There is a growing segment of roasters (and importers) who are opting to bypass the ICE market for purchases, instead choosing to pay prices that correlate with the quality in the cup. Royal Coffee has an alliance with Catracha Coffee, which gives monthly educational seminars to its farmers along with profit sharing at the end of the harvest. Additionally, Royal pays well for these coffees, and with all of the extra attention the farmers put into their farms, roasters end up with a coffee that is ridiculously sweet and syrupy. We talk a lot about Catracha around here because we want you to feel the love that we feel for the project and share the respect we feel for the producers of Santa Elena. Of course, Royal buys many other microlots, and pays a premium for their stellar qualities, including, but certainly not limited to: Sulawesi Toarco Jaya Peaberry, Colombia Huila San Agustin, Colombia Huila Finca Buenos Aires, Ethiopia Yirgacheffe 1 Bedhatu, Ethiopia Gedeb 1, Mexico Mayan Harvest, Rwanda Kivubelt, Timor-Leste Organic Ermera. This list is constantly growing.
Along with microlots, Royal also helps roasters with the importing logistics for their Direct Trade purchases. I have a lot of admiration for the effort in sourcing, production, and education these roasters have taken on, with an outcome that has improved prices for their farmer partners and improved the quality of coffee for their customers. Clearly, the increased prices are a good thing, but possibly my favorite aspect of these “relationship coffees” is that there is a close link between consumer and farmer. The green buyers, roasters, and baristas have a story to share with the person drinking the coffee. The more that the consumer thinks about how their coffee got to them, the better.
As much as I love this method of increasing the price of coffee in an effort to support producers, and hope it continues to gain traction, the reality of global coffee production is that the volumes are huge and most coffee is grown, harvested, and milled by farmers on very small lots. Most often, there isn’t an infrastructure set up for separating varietals or microlots, and all of the logistics that entails. With that in mind, I’d like to discuss another option for improving the price of coffee that benefits the small producer. It’s a system of paying an alliance of small producers a guaranteed minimum price that is well over the going rate of the C market (and similar coffees at origin). Most of that money goes directly to the farmer, but some of it gets pooled, and the cooperative management, who are democratically elected, decide on projects to fund using the money. Often the money is used for quality improvement (solar dryers, depulpers at the farm level, farm renovations, better storage or transport to reduce the occurrence of defects) or for social projects (education, health care, etc). This method is called Fair Trade. Maybe you’ve heard of it.
Fair Trade has lost some popularity over the years and it seems a new critique comes out semi-annually, but I, and more importantly the farmer cooperative members, still see value in the program. Visiting with cooperative members and with unassociated small farmers, you see that their lives are better with Fair Trade than without. While in Peru, I met with well-organized cooperatives (Sol & Cafe, Palto Amazonas, and Norandino) that are producing and exporting quality coffees, working on further improvements to quality, cupping extensively, meticulously keeping track of each cooperative member’s production volume, humidity levels, defect counts, certifications and such; providing producers with access to agronomists and technicians to help them better their farms. I met with producers who are carrying out these and other efforts at the farm level. They are planting new trees, cutting back old trees to get new and more productive growth, building solar dryers to improve drying time, building new fermentation tanks, and investing in new depulpers, all of which help decrease risk of defects.
In the face of hardships that persist for many certified small coffee producers, it is easy to conclude that Fair Trade and other certifications aren’t really helping farmers, and projects such as Catracha Coffee are the best route to take. The clash that has been created by various media, studies, and marketing strategies is counterproductive. Catracha Coffee and similar buying approaches stand on their own merits and do not need to be pitted against Fair Trade to prove their worth. Likewise Fair Trade has helped provide good opportunities to small farmers, and although it could arguably be doing more, I can name some producers that would be disappointed, to say the least, if not for Fair Trade.
In an industry as diverse as ours, and with issues at origin as complicated as they are, there are many paths towards a better future. Since we would be nowhere without the coffee that is so painstakingly produced for us, I hope you’ll choose at least one.