Coffee News: from Seed to Cup

The Complicated Role of Money in Specialty Coffee

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Not all producers have the same access to the specialty market – and it’s time we talk about this issue.

The specialty coffee industry is built on a great vision: high-quality coffee produced by fairly paid farmers. And there’s no doubt that roasters and consumers set out to have a positive impact on all elements of the supply chain. However, even while roasters pay premium rates for quality coffee, and producers experiment with fermentation and improve infrastructure to access better-paying markets, some farmers are left behind.

And unless we acknowledge this, and the complicated relationship between specialty coffee and producer income levels, we risk increasing those very wealth gaps we want to close.

Spanish Version: El Papel Complejo del Dinero en la Industria del Café de Especialidad

coffee farmCoffee in drying beds at farm in Costa Rica. Credit: Collaborative Coffee Source

Farming Coffee Requires Financing

Coffee production is an expensive, risky, and labor-intensive task. The costs, both financial and in terms of resources, often go unnoticed and underappreciated.

There are many expensive elements to running a farm: new trees, soil management, crop management, quality control, and more. And producers need to not only pay the costs of standard farm management but also those of catering to market demands – whether that’s for experimental processing or raised beds.

The problem is, the prices paid for coffee rarely, after expenses have been covered, leave much for investing in equipment, resources, marketing, or trips to coffee exhibitions.

This means that access to both resources and specialty buyers is often dependent on money – not on the quality of the coffee in question.

SEE ALSO: Study Confirms Many Fairtrade Coffee Farmers Don’t Earn Enough to Live On

coffee farmCoffee farm in Acevedo, Huila, Colombia. Credit: Collaborative Coffee Source

The Wealth Gap Among Coffee Producers

Melanie Leeson, Director of Marketing and Development at Collaborative Coffee Source, tells me that, generally speaking, there are two types of coffee producers. On the one hand, you have established producers who often have larger farms and tend to come from wealthier backgrounds. On the other hand, you have farmers who grow coffee simply because they have no other choice. They generally make enough money to get food on the table and operate on a subsistence level.

The large wealth gap between these two kinds of producers affects how they operate their farms and who they’re able to establish relationships with in the coffee industry. Phyllis Johnson, President of BD Imports, tells me, “While specialty coffee didn’t create the wealth gap that exists among coffee farmers, I believe that it often contributes to advancing opportunities for those who are wealthier than others.”

This is an important concept to grasp. Access to opportunities is crucial in the development of specialty coffee farms.

“Farmers who have greater wealth,” continues Phyllis, “can more easily build connections, produce and market their coffee, and take a seat at the table where their quality beans are traded at a higher premium. Even with our best intentions, we as coffee buyers can find ourselves engaged in systems that continue to oppress others.”

coffee farmCoffee farmers at farm in Santa Bárbara, Honduras. Credit: Collaborative Coffee Source

A Cycle of Debt

Take the case of small-scale Kenyan coffee farmers. Vava Angwenyi of Vava Coffee, a specialty Kenyan roastery with a US subsidiary, tells me that the majority of Kenyan producers live in poverty and “a perpetual state of debt.”

She explains, “The prevailing market system forces these farmers to take on debt to access the resources required to plant, fertilize and grow each new crop.”

These debts can be hard to repay since the farmers receive low – and often late – prices for their crops. “In order to sell their crops, farmers must then rely on the auction system in Kenya with few direct sales,” she tells me, “which results in bottom-dollar wholesale prices and delays in the payments to farmers, from six months up to a year after sale.”

Debt isn’t just an issue in Kenya. From Vietnam to Brazil, it closes opportunities and increases vulnerability for producers and coffee farm laborers. As Vava says, “With little access to cash, families have a limited ability to invest in their farming businesses by purchasing equipment, expanding their land, or diversifying their crops, further entrenching the cycle of poverty and insecurity.”

coffee farmDrying beds at Kenyan coffee farm. Credit: Collaborative Coffee Source

Balancing The Scales of Financial Inequality

However, it’s not all bad news when it comes to small-scale specialty coffee producers. Successful programs have already been established throughout different segments in the coffee supply chain.

Blanca Castro is a Chapter Manager of the International Women’s Coffee Alliance (IWCA). She believes that helping producers to become aware of the quality of their coffee is key to rebalancing the scales of financial inequality. In order to demand better prices, farmers first need to know their worth – and it is the lower-income producers who are often less aware of their coffee quality.

Another step is connecting producers with buyers. Since access to buyers is one of the biggest negative impacts of the wealth gap, this is an area that can see great results. Blanca shares the details of potential coffee buyers with members of the IWCA. It may be an unglamorous portion of the coffee chain, but it is through these contact exchanges that important business connections are developed. In fact, this is how she met Melanie.

As for buyers, they have to consider how much they pay – and how that money is distributed at origin. The founders of Collaborative Coffee Source, Robert Thoresen and Bjørnar Hafslund, have been working with the farmers of Santa Barbara, Honduras for over 12 years. The relationship began at Kaffa Oslo, a roasting company they owned, and then continued at Collaborative Coffee Source when it was founded in 2011. This year, the company decided to increase the prices paid by 50¢ per lb. In return, they asked that farmers pay their agricultural workers more.

Robert Thoresen writes, “It is not a condition, but this increase of 50 cts/lb from last season is meant to give the farmer/land owner/owner of the facilities/business person/employer an opportunity to distribute some of the gains they are making in relationship with us, to their workers.”

coffee farmNeptaly Bautista stands next to his coffee drying beds in Santa Barbara, Honduras. Credit: Collaborative Coffee Source

Community-Led Growth

Melanie, Phyllis, Vava, and Blanca all agree on one thing: in order to create meaningful change in the industry, coffee producers need to lead the way.

Melanie emphasizes that no one else knows what’s going on at the producer’s end of the supply chain better than the producers themselves. Because of this, it is important for them to take the reigns in enacting change on their farms and in their communities. It is not the place of other players to tell producers how to do this. Melanie argues that this producer-led demand for change will then spill over into the rest of the coffee chain.

For Blanca, the concept of community action is key. Solidarity among IWCA members has benefitted the organization, she tells me. With the majority of members being small producers, their ability to enact change is greater when they work together. “They understand that if as neighbors they’re producing coffee of the same quality, they grow together,” she says.

An example of this can be seen in Kayanza, Burundi, where Gaudance Nijimbere and Matilda Niyimbon are primary leaders at a washing station. Phyllis tells me that they train producers on  “how to select and process the best quality coffee beans to be sold under the IWCA Burundi name.” By sharing this knowledge, they progress together.

coffee farmCupping session in Burundi. Credit: Collaborative Coffee Source

As nice as it’s been to mention all of these success stories, it’s important to remember that money still matters. As Blanca Castro puts it, “the topic of empowerment is a romantic one; however, without money, we’re not there yet.”

By diminishing these wealth gaps and working towards a fairer playing field among producers, we all win, no matter which end of the coffee industry we belong to. When coffee producers have better incomes, they can create a better life for themselves and their communities. They can also invest more money into their farms, improving both yield and quality.

So next time you sip on your favorite cup of coffee, take a minute to let this all sink in. Ask yourself: how you can contribute?

Written by Karla Boza.

Please note: This article has been sponsored by Collaborative Coffee Source.  

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