Everyday People Coffee & Tea - April  27  2020

Coffee is in a Crisis

Photo by Susan Yin on Unsplash

Why is it so important to choose a sustainably-sourced, high-quality coffee? Why drink coffee that we know where it comes from and how it has been grown? Why buy coffee that is labeled with certifications like Fair Trade or organic? 
Climate change has started to transform the environment where coffee is grown. As the temperature of the planet rises, farmers have been forced to grow coffee in unpredictable and unreliable conditions that often disrupt the seasonal life cycle of the coffee plant. As a crop that is particular about the environment grows in, unless the farmer is paid enough to invest in sustainable infrastructure to grow their coffee, coffee is in danger of being wiped out without the deliberate conservation of the plant and its environment. Coffee diversity is also set to decrease as underpaid farmers leave their farms to migrate towards better opportunities1. Farmers are dealing with cultivating coffee in a climate crisis and a price crisis, and coffee consumers have a part in mitigating the worst effects of these crises through choosing to drink coffee that has been sourced responsibly and sustainably. 

But What is the Coffee Crisis?
When learning about the coffee crisis, people can learn about both the coffee climate crisis and the coffee price crisis. The combination of lower yields from disrupted growing seasons and lower buying prices for coffee are hurting the livelihoods of many coffee farmers and are forcing many to abandon their coffee farms.

Coffee Climate Crisis
Since 2010, about 24 million people around the world each year have been displaced by extreme weather events. Coffee is not immune to the effects of climate change like rising temperatures and more unpredictable extreme weather events. These external factors disrupt coffee’s growing season and make formerly predictable weather patterns unreliable to depend on. Without proper financial support and infrastructure, farmers are finding it difficult to cultivate coffee during these quickly changing weather events that suddenly swing from drought to heavy rains at unknown times. With the rising temperatures and extreme weather patterns, coffee plants become stressed and more susceptible to diseases like coffee rust and pests like the coffee berry borer. In Central America, disease and pests caused over $500 million in annual damages during the 2012 - 2013 growing season. 

Photo of a coffee leaf with rust,
SCA News, Jesse Bladyka
Coffee Leaf Rust: A New Reality for Specialty Coffee

One of the most destructive and feared coffee plant diseases is coffee rust, called La Roya in Central and South America, caused by the fungus Hemileia vasatrix. It appears on the leaves, attacking mainly Typica and Bourbon coffee varieties, and it eventually causes major production losses. With rising temperatures, humidity, and heavy unpredictable rains, this disease has been increasing in severity, causing $250 million in production losses alone in 2014 in Central America. During the 2012 - 2013 growing season, Honduras, Costa Rica, and Guatemala declared a state of emergency as more than 350,000 people lost their jobs due to the loss of huge amounts of coffee crop.

Deforestation, climate change, and the increasing severity of diseases and pests are putting 60% of all wild coffee species at risk for extinction, which is much higher than the average risk figure of 22% for all plants. Wild coffee species provide the genetic diversity needed to create more disease-resistant coffee plants, which is especially important research to aid coffee farmers looking to avoid the costs of the destructive coffee rust.

These higher temperatures have been found to also reduce the quantity of arabica in a harvest. Another coffee species, robusta, typically used in coffee blends and the commodity market, was found to suffer in variable seasonal temperatures. In planting all coffee, it was found that climate change will reduce the planting area for coffee globally by about 50%.

An average of 50% land available to cultivate coffee by 2050
Here’s How Climate Change Hurts Coffee

The climate crisis is not only affecting coffee. Rising temperatures, carbon emissions, and other shifting environmentals are decreasing the nutritional value and yields of other crops like rice, wheat, and corn.

Coffee Price Crisis
Though coffee is valuable economically, the cyclical nature of the market creates struggles at the farm in producing countries. In 2019, coffee prices were at their lowest on the International Commodities Exchange (ICE) futures market at $0.86 a pound. This is not feasible to even cover the cost of producing coffee. Even so, about 61% of producers globally sell their coffee for under the cost of production. Coffee trading prices are usually determined by the Coffee “C” Futures Market. The Futures market is based on contracts at 17,000 kg (37,500 lbs) of green coffee, which doesn’t reflect on the production of the 25 million smallholder farmers, which make up 70% of all coffee farmers. Only larger companies find price stability in this market, but this “C” price affects most contracts that coffee is traded.

The C Futures Market
Coffee Producers Demand Immediate Action Amidst Price Crisis
Nick Brown

The most recent decline of the “C” price was caused mostly by oversupply of coffee from Brazil and the lack of supply management through export quotas and price constraints in the Futures Market. Global production has been increasingly concentrated in Brazil and Vietnam, where technological innovations have mechanized the process for cultivating coffee, therefore increasing yields for the commodity market. These yields created an oversupply of exported coffee thus a sharp decline in the C price.

Before 1989, the International Coffee Agreement (ICA) would have placed price constraints on the “C” price and would have compelled national coffee organizations in producing countries to take actions to control the amount of exported coffee. However, the ICA, with its protections for coffee producers, broke down in 1989, and there has been a lack of political will to reinstate the agreement with controls on supply, price, and other structural supports for farmers in producing countries.

Farmers in the pre-ICA era enjoyed macro-structural aides through research and development programs, rural development initiatives, state subsidy programs, production quotas, and export control programs1. In post-ICA, most of the financial value added to the coffee occurs after roasting in the consuming country. Even if many farmers are not even paid enough to cover the costs of coffee production, they are the ones that currently absorb much of the financial risk in the coffee supply chain. If they are not paid enough for their work, they are not able to invest in organizational, farm, and financial infrastructure to raise the quality of the coffee crop to gain access into the premium specialty coffee market.

As written by Petchers and Harris in The Roots of the Coffee Crisis:
“Today coffee farmers receive 2 percent or less of the price of a cup of coffee sold in a coffee bar. They receive roughly 6 percent of the value of a standard pack of ground coffee sold at a grocery store…

In 1984, green bean costs constituted 64% of the US retail price. When price crashed in 2001, the raw material price as a proportion of the final retail value had fallen to 18 percent. In 2004, growers received on average 17 percent of the final retail value coffee--and as low as 9 percent for South American producers of robustas2.”

Many farmers grow coffee as a cash crop, subsisting on their own garden crops and earning money through selling coffee. There are ways to earn more money at the farm, such as investing in sustainable or improved farm infrastructure to increase coffee quality, thus increasing coffee’s buying price through accessing premium prices in the specialty coffee market. Farmers could diversify their crops they grow to sell. However, it takes knowledge and financial investment to grow alternative crops and connections to tap into those markets2. In Guatemala, 7 out of 10 farming were living in poverty in 2019. As buying prices decreased for coffee and production costs increased with the need for more labor for an unpredictable growing season and chemicals to protect against coffee rust, coffee was no longer giving an outlet out of poverty. Entire villages have become gutted out as families migrate to look for opportunities in urban centers or El Norte, the North, especially to the United States.

What is the Coffee Industry Doing to Help?

There is an increase in sustainability initiatives, the ethical consumer movement, and the rise of the specialty coffee sector, allowing for a portion of coffee to be produced outside of traditional, commodity markets. A 2016 report commissioned by the Specialty Coffee Association (SCA), the Global Coffee Platform (GCP), and the Sustainable Coffee Challenge (SCC) stated that the coffee industry globally spent about $350 million on sustainability initiatives in regions that produce coffee in 2015.

There are also research organizations trying to create rust-resistant varieties for farmers to grow. Cenicafe, a center for coffee research in Colombia, developed its first hybrid in 1980: a Colombian varietal, combining Caturra and a variety of Timor. Coffee rust has mutated, so Cenicafe has had to develop new varieties since then, like the Castillo variety and the Cenicafe 1 variety.

Photo of Tanzanian coffee farmer from Johannes Thoma,
Executive Management Assistant at implementing partner Hanns R. Neumann Stiftung,
coffee&climate

Organizations like coffee&climate by the Hanns R. Neumann Stiftung Foundation, share knowledge with farmers to help them become more resilient in climate change. They suggest such methods like cover crops and coffee plants spacing in order to lower soil temperature in less shaded areas, prevent erosion, quick growing shade trees, and diversification. They also suggest interventions like using trichoderma, to promote plant growth and increasing resistance to diseases, or using gypsum to aid root growth. They also help with monitoring soil temperature and shade cover through sharing technologies. Starbucks, through their Farmer Support Centers, is sharing research with other coffee farmers.

There are also programs that are helping organize farmers to access knowledge and research. Ruiz, the regional coordinator for coffee&climate, emphasizes the need for helping farmers get organized with their community. Farmers need information on the coffee market and global production trends to plan their crops, and they also need the support to create infrastructure for marketing, organizational, and financial management.

Coffee is in the midst of a major crisis, so we, as responsible consumers, need to pay attention to where our coffee comes from! Understanding the process and mechanism of how coffee has been carefully tended by people all across the world, we at Everyday People Coffee and Tea source sustainable, single origin coffees from farmers, ensuring that those farmers are also provided equitable wages to sustain a livelihood that depends on the coffee trade. We are deeply committed to sourcing quality beans to produce our premium coffees. Our coffee is roasted in a registered and approved FDA facility adhering to sustainable practices.

Let us know how your coffee journey is going at our Instagram @everydaypeople_coffee or our contact form!



Text References:
Goodman, David, The International Coffee Crisis: A Review of the Issues, MIT Press, 2008

Petchers, Seth and Harris, Shayna, The Roots of the Coffee Crisis, MIT Press, 2008

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