Some people working in the coffee sector have a funny habit. We talk and think about coffee farmers as a monolithic group: How do changing prices affect “farmers?” Will “farmers” be able to change growing practices in response to climate change? Which beans are “farmers” growing and will customers like them?
But, of course, there is no stereotypical farmer. Coffee is grown in 70 different countries by 17 million families, and every single one of them is different. How much does a 5,000-hectare farmer in Brazil really have in common with a 200-tree farmer in Uganda?
I’ve been posting recently about the need to consider different groups of farmers, and specifically about the need to better integrate smallholder farmers into our sustainability strategies. As long as 70 percent of coffee farmers worldwide yield less than four bags, our sustainability strategies must prioritize work with the growers with the most room for improvement.
Is small-scale agriculture even truly viable?
Our sustainability work in coffee starts from the assumption that small-scale can be sustainable, if we could only just change it a bit here and there. If we facilitate market connections, support income diversification, or improve yields, then it will work. If we just make one more change, then we can all sleep well knowing that the future of coffee is secure.
What if, after all the labels, all the trainings, and all the new growing techniques, we realize that there’s just no way for smallholding to provide a decent livelihood for farmers? People in our sector are asking: What if one to two hectares will never yield enough income to make coffee growing profitable for a farmer? It’s a scary question to ask, because it prompts so many more:
- If smallholding cannot be viable in the long-term, don’t we as an industry have an obligation to help farmers consolidate?
- Counterintuitively, might we need to support farmers in transitioning out of coffee in order to protect the future of coffee? Would this be seen as a self-serving attempt to simplify our supply chains and reduce costs at the expense of farmers’ independence?
- Will consolidation leave only highly efficient and profitable producers in Brazil and Vietnam, and lead to the death of a variety of cup profiles we all love so much?
- Considering the research showing that most successful coffee farmers are growing multiple crops, should we be pushing crop diversification? Would we face pressure from within the industry if we did?
- By working with smallholders to help them make their current operations financially viable, are we simply prolonging a model that will never work? Are we romanticizing small-scale operations and trapping farmers in a cycle of poverty?
What does German wine have to do with it?
I don’t have the answers to these questions, but I have a sneaking suspicion that German viticulturalists (“wine farmers”) have a few clues for us. Because I want to believe we can make small-scale farming work, I was searching for examples and found some reason for hope. Believe it or not, in 1999, there were close to 70,000 wine smallholders with an average of 1.5 hectares producing a high-quality product in Southern Germany and selling it to highly efficient cooperatives, and that number is growing. Sounds a bit like coffee today, no?
The secret to their success seems to be a meaningful understanding of their own region and how best to utilize its unique features, a relentless focus on quality, and an understanding that wine has cultural and historical importance that motivates a deep love among customers. These farmers do not depend on wine for a living; they have diverse sources of income, but wine is their passion. I’m still trying to figure out what specifically we in coffee can learn from German wine growers and the rise of the community supported agriculture (CSA) movement, but the very existence of a thriving group of small farmers gives me hope. Maybe there is future in specialized coffee farming that could allow not only a source of income, but also a source for empowerment and independence.
Still, I’m cautious. We need to separate ideas that we want to be true from the cold, hard facts on the ground. Today, the majority of smallholder coffee farmers do not make enough to survive without the involvement of external sustainability programs. Until they do, our job will not be done. This is exactly why we need to stop scaling up before we understand the efficacy of a project, and why we need to be more honest about projects that don’t work. Ultimately, it doesn’t matter what we think, or what we want to believe. What matters is what the research and projections tell us, and what the farmers think.
Let me know: What else do we need to question?
Jan von Enden
Jan von Enden is General Manager of the Hanns R. Neumann Stiftung North America Inc., a 501(c)3 public charity foundation, based in New York. Jan holds an MSc in Agriculture, Environment and Development from University of East Anglia, UK. He has been spending most of his career in coffee producing countries, such as Peru, Vietnam, Costa Rica, Papua New Guinea and others.
I give Jon von Enden my sustainability awareness of the decade award!
This is perhaps the sharpest article I’ve ever read challenging our micro-farmer economic sustainability concepts.
How small is too small? This question IS the elephant in the room. ALL other “sustainable” efforts hinge on answering the “minimum sustainable farm size” in each country.
A 2 hectare certified FTO coffee farm in Peru earns half of the Peruvian minimum wage. Only farms of 3+ hectares can reach minimum Peruvian wage . . . and at 5 hectares we can expect to see farmer profitability “sustainability”. The average farm in Peru is 2 hectares.
Yes I know productivity and profitability are components as well, but at some point we just need to be pragmatic and say a 2 hectare farm in Peru is not recommended if you want to make more than Peruvian minimum wage. Every farmer knows it, time for us to just confess it.
Thank you K.C.! Where can I pick up my award?? But seriously… please get in touch and help us bringing more brainpower to find solutions and over all, awareness across the sector to this issue without leaving the farmers behind! Get I touch through http://www.coffeekids.org or http://www.hrnstiftung.org
I’m interested in the use of agricultural cooperatives to support small scale farmers – seem to see a lot of them in Spain. but can they work elsewhere (including to support crofters in Scotland and coffee producers)?
Thank you for bringing this up. This seems like the crucial question we need to be asking ourselves, and asking it at various scales.
I’ve been asking for a while now: where are the agro- and environmental economists who can more accurately speculate on these issues with us in a public forum?
Months ago I asked Matt Perger on the BH vlog about whether there were parallel industries like wine and beer which had already undergone smallholder consolidation and buyout- and what lessons and predictions we could learn and prepare for in advance. That question remains, and your article brings it up once again!
I am so gratefull that you put this under the attention. The industry needs to start asking themselves difficult questions. There are so many paradoxes, especially in sustainability projects. Example: coffee is not profitable (price/yield/farm size) so young people don’t want to work in coffee. Solution set up external programmes to involve youth. This makes no sense. Projects like these can be great but they do not adress the root causes. Maling a profit growing coffee is hard. Is what we need 2 hectare farms being divided amongst 4 children? There are too many questions people are afraid to ask/discuss.
Well first, there are farm subsidies in Europe, which help and don’t exist in many coffee producing countries.
Second, the value the farmer gets out of one hectare of grapes for wine is much higher than one of coffee, especially because the coffee farmer is paid almost nothing and almost all the value is kept by the traders, the roaster and the cafe.
With wine, the farmer can bottle his own or sell it directly to a company which bottles it. There are many more middlemen in coffee and value is kept at the consuming country, not the producing one.
Just look at EU import duties: if you import green coffee from Central America, it’s duty free, if you import roasted coffee, it has duties. This system is structured to keep the third world producing raw materials and manufacturing/value in the developed world.
Add to this the commodity market, with speculators betting on coffee without ever seeing one bean themselves. Prices have been kept artificially down thru this system, which should be abolished. How traders are allowed to play with our income is insane.
Only companies which intent to take reception of the actual coffee should be allowed to buy in the commodity market, not speculating traders who manipulate the market at the expense of farmers.
And taxes, look at the German coffee tax, the German government gets more money per kg of coffee than the actual producer. How the hell are consuming countries’ governments getting more out of one kg of coffee thru taxes than the farmers who produce it?
I think it’s a messed up system, designed to keep us producers down and rich countries rich and I don’t see anything changing. Even specialty coffee is still based on the commodity market, used as a reference, “see, I’m paying you two times the commodity price!”
But adjust for inflation and we were getting better prices for commodity coffee back in the 50s than for specialty coffee now. We do more work and still get scammed.
The only way to change this is for producers to get a larger share of the pie. Worldwide, coffee is profitable, for the middlemen traders, for the roasters, the cafes…so if some of this value were to be shared with the producers, it would be sustainable.
If producing countries would set up warehouses in consuming countries, just this would allow a larger share of the pie to be kept by producing countries. That would put middlemen traders out of business, and they are the ones pushing prices down so they can get their cut. Setting up a warehouse can easily be done. If Ethiopia decided tomorrow to sell all their coffee out of warehouses in Hamburg, New Jersey and Singapour, roasters who buy it from there.
Thanks for these thought-provoking and spot-on questions. I agree with KC o’Keefe, too, time for us to just confess that e.g. a 2-hectare FTO farm in Peru doesn’t get a household out of poverty. Yes, the way the global coffee sector is currently organised, we have to admit this.
So I guess a next step would be to understand what decisions different farmer household members make in securing and enhancing their livelihoods; e.g., increasing size of farms if possible, leaving coffee, or like Jan mentioned with the German wine farmers to not be dependent on the crop for a living by having diverse sources of income (but keeping coffee as a passion that creates some additional income…)
And what other scary and awkward questions can we ask about other actors’ decisions in the value chain? Are there ways to reorganise the sector in such way that a 2-hectare farm in Peru dóes become a viable source of income for a coffee producer family? Is there a win-win scenario? Or do we need to give up some of our dearest habits….?