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112. Quality, innovation and risk

It is fair to say that most roasters want to source higher quality coffee, and most farmers want to grow higher quality coffee.  So if everyone wants quality, what is keeping everyone from going in on it together?  One big obstacle is that despite extraordinary progress in this area over the past 20-30 years, a very real knowledge gap around coffee quality persists.  Another (related) obstacle is that the innovations that have potential to boost quality usually require up-front investment and involve some kind of risk.  Unfortunately, most of that risk tends to fall squarely on the shoulders of the people least able to bear it — smallholder farmers.  We are supporting a pilot in Nicaragua that is heavy on quality-driven innovation and light on risk to farmers.

This particular initiative is testing on a small scale a semi-washed process that omits the fermentation and washing processes, and moves the coffee directly into a specialized drying facility after depulping.  The coffee dries in contact with the pulp and mucilage, producing a pulp natural coffee that has mellower acidity and fuller body than washed coffees.

We recognize that the wet process is the one that most reliably produces the cleanest, highest quality coffee, and therefore represents the least risk for farmers.  We also know that there are opportunities out there for farmers who are able to effectively manage riskier, more complicated post-harvest processes.  While we have not promoted the notoriously unreliable natural process, we are going halfway this year and supporting a semi-washed process.

Under the pilot, 15 farmers from an organization participating in our CAFE Livelihoods project have each agreed to commit five 100-weight sacks of coffee to the semi-washed process.  In return, we have pledged support for the construction of specialized drying shelters (“hardware”) and technical support from folks who have lots of experience with pulp naturals (“software”).  These hardware and software investments are no-brainers — few smallholders can commit to innovations on this scale without external financing.  But that is where most processes stop, meaning a farmer who does not effectively assimilate new technologies on the first try will take a financial hit. In this case, we have also helped the cooperative create a financing mechanism that guarantees the the farmers who volunteered for the pilot a minimum payment of $2.00/pound for their semi-washed coffee.

Guaranteeing cash increased people’s willingness to put their coffee “at risk.”  Even if the semi-washed process leads to significant losses of quality and value, farmers will not suffer.  At the same time, the process creates incentives for quality, since farmers in the pilot will also take home anything above the $2.0o level that the coop can get for their coffee.  If farmers can get the process right on the first try and earn $2.00 or more, the funds the cooperative is using to guarantee a sale will be recycled into an innovation fund for the 2011-2012 harvest for another group of farmers.  Next year’s innovators will not only enjoy the benefit of a guaranteed minimum payment, but also the support of this year’s pulp natural pioneers.

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