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350. Reflections on the c-word

2013 April 17

CRS began working in coffee just over 10 years ago in response to a crisis.  Today the coffee sector finds itself coping with another crisis.  As I prepare for four days of meetings here in Guatemala to plan a coordinated response to the coffee rust epidemic in Central America, I try to remember that challenges and opportunities are two sides of the same coin.

THEN: THE COFFEE CRISIS.

Coffee has always been through periods of boom and bust, but what happened beginning in 2000 was something different. 

The prices farmers earned for their coffee fell to their lowest levels in a generation – less than $0.50 per pound.  Sometimes much less.  Farmers we began supporting in Nicaragua in the wake of the crisis reported farm-gate prices as low as $0.18 per pound.  But those were the nominal prices.  Economists suggested that the real prices – what that coffee income could buy farmers after adjusting for inflation – were the lowest they had been in a century.  It was bad. 

Coffee-growing families saw their incomes halved overnight (or worse) due to market forces beyond their control.  Farmers struggled to feed their families.  Some gave up on coffee.  Others gave up on farming altogether and migrated in search of work.  The impacts of the price collapse were so severe that the episode became known simply as “the coffee crisis.”

NOW: THE COFFEE RUST CRISIS.

Today, the coffee sector is in crisis again.  This time the crisis is driven not by what is happening in the marketplace, but by what is happening in the coffeelands.  Coffee leaf rust has reached epidemic proportions in Central America.  As much as 70 percent of Central America’s coffee fields are affected.  Production losses for this harvest exceed 100 million pounds.  Farmers have lost hundreds of millions of dollars in revenues due to low production.  And hundreds of thousands of jobs have been lost as there is less coffee to pick, process and export.  Estimates of missed revenues are north of $1 billion. 

The humanitarian impacts of the coffee rust epidemic on vulnerable farm families are have still not come into full view.  Farmers still have money they earned during the recent harvest, but we know from our experience in the field – and the pioneering research conducted by Green Mountain and CIAT – that money doesn’t last long.  Coffee-growing families quickly settle into the long lean season between the coffee and staple crop harvests, when cash flows slow to a trickle and families routinely cope with food scarcity.  The early indications are that we will not see famine or acute suffering this year, but with official data suggesting that coffee rust could have twice the impact next harvest, I worry that we may be watching a humanitarian crisis unfold in slow motion.  One cooperative leader we interviewed in El Salvador told us with certainty that “The crisis will be in 2014.”

Today I am in Guatemala City to participate in four days of meetings with a broad range of actors – national governments, research institutes, coffee roasters, non-profit agencies, banks, coffee certifiers and others – trying to develop a strategy for coordinated action to mitigate the negative impacts of the current crisis and help vulnerable family farmers prepare for the next one.

REFLECTIONS ON “CRISIS”

In preparation for the meetings, I have been reflecting on the idea of crisis, trying to remember that challenges and opportunities are two sides of the same coin.  The last crisis caused a lot of suffering in the coffeelands, but it also created opportunities.  It awakened many actors to the social and economic realities of life in the coffeelands – not just coffee consumers, but even importers and roasters who were engaged in the trade but perhaps didn’t fully understand the challenges a small-scale farming family faces.  It catalyzed innovation, unleashing a wave of creative initiatives to make the coffee trade more sustainable.  It drove the phenomenal growth of the U.S. Fair Trade market, as roasters and consumers sought opportunities to be part of the solution through purchases that generated more benefits for farmers and their communities.

Last month I wrote at length about possible silver linings in the coffee rust crisis: the recognition of the urgent need for more investment in renovation, research and extension. But I find myself thinking more broadly, more optimistically today than I did then, partly because of the energy and commitment to support farmers I felt among industry leaders at last week’s SCAA Symposium and Expo.

Before the coffee rust crisis, we had already begun to recognize the shortcomings of the leading approaches to sustainable coffee and started working to refresh the concept of sustainability.  My hope is that the coffee rust crisis will force everyone in the industry to look again, long and hard, at the underlying economics of the 1-2 hectare coffee farm.  That the way we talk about and measure sustainability may be losing relevance when smallholder coffee farmers selling “sustainable” coffees are coping with hunger 3-8 months a year.  That we will see in response to the current crisis the same kind of creativity and commitment that we did in response to the last one.  That a new generation of coffee leaders will use the coffee rust crisis to push the trade beyond its current frame of reference toward a vision of sustainability 2.0.

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