A new white paper published by the nonprofit World Coffee Research (WCR) suggests research and development (R&D) funding in the coffee sector continues to be woefully short if roasters and consumers want to continue to enjoy coffee as they know it today.
The study estimates that the world would need to invest approximately $452 million new dollars per year in agricultural research and development (R&D) over the next decade in order to maintain green coffee diversity and quality.
With lesser investments or the status quo, the coffee industry is likely to experience mass consolidation in coffee production, as well as a dramatic reduction in diversity in terms of quality arabica coffee varieties and their origins, the authors suggest. These phenomena will be precipitated primarily by climate change and stress on producers amidst increasing global demand.
The paper characterizes the $452 million financial benchmark as an “investment gap” and says that the global green coffee sector is facing an “innovation crisis.”
The research behind the paper was led by Dr. Mywish Maredia, a professor of development economics in the Department of Agricultural, Food, and Resource Economics at Michigan State University, and MSU Ph.D. student Jose María Martínez.
“This scale of underinvestment cannot continue if the world wants to continue drinking its favorite beverage,” Maredia said in an announcement shared by WCR. “Increasing global investments in coffee R&D to accelerate innovations across multiple countries can help reverse this trend and support the coffee sector to keep up with growing consumer demand and respond to the challenges of climate change and poverty, while avoiding further consolidation of production.”
WCR is a globally focused nonprofit based in Portland, Oregon, that relies on numerous funding sources for programming and operations, including contributions from the private sector. The organization is hosting a webinar with CEO Jennifer “Vern” Long and lead author Maredia on the research on Wednesday, June 12.
The new paper encourages investment throughout the coffee world, which the authors say has been woefully underfunded compared to other agricultural sectors and industries of comparable consumer value. The authors specifically identified the coffee sectors in parts of Latin America and Africa as most in need of R&D funding due to historic deficiencies.
The paper is rife with heretofore unpublished financial statistics regarding R&D investments in the sector.
It says the current global investment in coffee R&D is estimated to be $115 million per year, with 90% coming from the public sector and 10% coming from the private sector. That equates to just under half a cent per every dollar of green coffee produced globally, according to the researchers.
The authors also say that the total value of green coffee makes up about 4.8% of the total value of agricultural output in the 45 coffee-producing countries included in the analysis.
“Coffee should therefore make up a similar percentage of agriculture sector investments in these countries — yet today, the investment amount is a mere 1.8%,” the paper states.
The paper concludes that a nearly four-fold increase in R&D investments is needed in the coffee sector to further prevent consolidation and loss of commercial green coffee diversity.
Wrote the authors, “For an industry with a retail value of more than US$200 billion, this would mean setting aside less than 0.3 cents for every $1 of coffee retailed to consumers.”
Does your coffee business have news to share? Let DCN’s editors know here.