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45. What are coffee companies investing in at origin?

2010-05-13 Comments Off on 45. What are coffee companies investing in at origin?

Over the past week and a half, I have been posting on the issue of how coffee companies are investing at origin.  Today: what they are investing in, and how that may be changing.

Beyond a shadow of a doubt, the dominant motivation for industry reinvestment at origin remains quality.  CQI — the Coffee Quality Institute — is going great guns (and as rumor has it, eyeing engagement at the next frontier of quality: Haiti).  In its post-expo “state-of-the-Symposium” the SCAA blog pronounced that “the industry remains unabashedly focused on quality.”  And the Global Coffee Quality Research Initiative that was presented during the Symposium — a mega-grant to invest massively in research on coffee quality — generated lots of buzz.  Few details were available for those who were not able to attend the Symposium presentation, but the description of the session called the initiative a “groundbreaking opportunity…that may redefine the way we do business.”  To the extent that these investments help smallholder farmers meet the industry’s stringent quality standards — and earn premiums for their high quality — they are welcome.

So at origin, quality may still be king.  But reinvestment seems to be diversifying into new areas, including these:

  • Hunger.
    Over the past year, the issue of hunger in the coffeelands has found its way onto the agenda of the National Coffee Association annual meeting, the SCAA Symposium and Expo, and the 2009 edition of Sustainable Harvest‘s annual Let’s Talk Coffee event.  The level of interest in the issue at this last event so exceeded the expectations of the organizers, that they have decided to convene the Food Security Solutions event in Nicaragua next month for producers in the Mesoamerica region.  The list of companies investing in food security seems to be growing.  (It didn’t hurt that the SCAA gave its 2009 sustainability award to the Zeri Foundation for its collaboration at origin with companies like Roaster of the Year Equator Estate Coffees and Teas to promote the production of high-protein mushrooms using coffee pulp.)  Among other notable developments in 2009, Green Mountain scaled up its support for food security projects and Allegro Coffee has announced it will support the replication of the mushroom project in Rwanda, while progressive companies like Dean’s Beans and Just Coffee continued their long-term support for community-driven efforts to achieve food security.
  • Health.
    Grounds for Health is a favorite channel for industry investment in community-based health services, and with good reason — it delivers effective programming that saves lives.  But cervical cancer is only one of many threats to the wellness of coffee communities — there is lots of room for additional investment here.  Partners in Health may be most associated with Haiti, but PIH is also working in Chiapas to strengthen community-based health structures in the coffeelands.
  • Water and sanitation.
    I am surprised, frankly, that there hasn’t been more investment in this issue, as access to sufficient volumes of quality water has emerged in many parts of the coffeelands as the generational developmental challenge.  Furthermore, lack of access to clean water and poor sanitation practices are a leading contributing factor to some of the issues above — poor health in coffee communities and food insecurity.  Adoption of water-efficient wet milling technology has certainly expanded, but investment water systems and community-based watershed protection has lagged in comparison.  The Starbucks-Ethos connection famously pledged $10 million for investment in water systems around the world, but there have been few industry followers at that scale.  Meanwhile, very exciting community-driven work has been going on with relatively little fanfare, like Higher Grounds‘ support for the Chiapas Water Project and Dean’s Beans’ investment in the Miriam’s Well project in Ethiopia.
  • Reforestation.
    There has been lots of reinvestment in this area, and it is very exciting.  Coffee agroforestry systems generate so many “positive externalities” (polite econometric language to describe the good stuff coffee farmers do for the rest of us without getting paid for it), including: storing carbon, protecting water sources, improving recharge of water tables, reducing soil erosion and vulnerability to natural disaster, improving soil structure and fertility, creating opportunities for rural tourism, etc.  Reforestation projects — too many to begin to name — help expand these environemntal services and mitigate the impacts of climate change.
  • Household savings.
    We are privileged to be working in Ethiopia, Guatemala, Kenya and Rwanda with funding from Green Mountain to promote community-based savings and lending groups to build financial assets in coffee-farming households and social assets in coffee-farming communities.  I don’t know what other industry investments have been made in this area, but would love to know more.  Expanding household savings has proven in our experience around the world to be an effective way to help families save what the literature calls “useful lump sums” for big expenses that they anticipate, as well as the ones they don’t.  Building savings habits seems to hold real promise for helping improve the resilience of smallholder families before such shocks.  In Mesoamerica, where the ebbs and flows of coffee revenues create a fairly predictable annual season of need, savings could be a helpful coping strategy.