One overcast Sunday last September, Nick Cho published this searching reflection on the relationship between coffee quality and social impact. Somehow it managed to escape my notice until this past weekend. Nick’s post is beautiful in its candor, frankly acknowledging the limitations of specialty coffee and honestly exploring “the true human condition of the coffee world.” And it is blasphemous, courageously challenging some sacred beliefs: “The specialty coffee industry has, at least within our boutique segment, done a shi**y job of actually helping coffee producers.” When James Hoffmann published this thoughtful reply nearly two months later, one of the most important conversations in specialty coffee was on.
Between Nick’s post and James’ riposte, there is so much to respond to that I am not sure where to begin, or whether I can respond in a single post. Here is what strikes me as most important.
Nick frames the relationship between quality and social impact in stark terms: “Do you care more about coffee quality, or about people?” Organizations like ours, whose missions are focused on people, have bet long on the idea coffee quality and social impact are not mutually exclusive, but mutually reinforcing. Our experience — and the data we have gathered in connection with our programming in the coffeelands — suggests that for most of specialty segment of the coffee market, they are. But for the coffees Nick calls “boutique” and James calls “the real stuff,” the relationship between coffee quality and social impact may be less clear.
Coffee quality evangelists have been preaching the gospel of coffee quality for many years without rigorous evidence to support what amounts to the central article of their faith: that quality of coffee equals quality of life.
Again, this relationship may be clear for the bulk of what passes for specialty coffee, but perhaps not as much for boutique coffees.
When we began working in the coffeelands 10 years ago to help smallholder farmers expand access to specialty markets, this was our hypothesis: that the specialty segment of the coffee market delivers more benefits to farmers than the commodity trade in coffee; that farmers selling coffee scoring 80 points or more into supply chains with some degree of traceability are better paid for their coffee and more profitable than farmers selling lower-quality coffee into anonymous commodity trade channels. What we have learned over the past decade confirms that hypothesis, and we continue to gather data to monitor the impact of our market-access programming on smallholder profitability that reaffirms our commitment to the specialty segment as a whole.
But what about “the real stuff?” What about coffees hitting 85 points or more on the SCAA scale and earning quality-based premiums? What about microlots that require special post-harvest technology, meticulous selection and separation efforts, and may never amount to more than 10 or 20 percent of a farmer’s total production? Certainly the price points are higher, but are they more profitable? Do they make sense for resource-constrained smallholder farmers, or would their scarce cash and labor be better invested elsewhere? Is the market for boutique coffees primarily for estates, or is it inclusive enough of smallholders to contribute broadly to community development and poverty reduction in the coffeelands? Are farmers translating improvements in coffee quality to corresponding improvements in their quality of life? Are quality standards in the marketplace rising faster than living standards at origin? Is there a point of diminishing returns beyond which additional investment to improve coffee quality fail to generate commensurate returns? If so, where does it lie?
Nick seems to have made up his mind on these questions on the basis of direct observation. He may be right. I prefer to rely on data analysis, but there is precious little data-based evidence on the basis of which to answer these questions.
One notable exception was this extraordinary initiative undertaken by Counter Culture in 2011 to study the social impacts of its own approach to sourcing microlots. This detailed research review identifies some of the shortcomings of the study, including its lack of quantitative data, but it represents a worthy and courageous effort by a Direct Trade pioneer to examine some of the assumptions that underpin the “boutique” coffee model. The economic return to smallholder farmers on investment in coffee quality is a leading research question for us in our Borderlands Coffee Project, but significantly more work is needed in this area.
In the meantime, are there steps that quality-focused businesses can take now to generate more social impact in the coffeelands?
RELATIONSHIPS AND AWARENESS.
James suggests, almost apologetically, that the interest in origin among quality-oriented roasters has perhaps less to do with a commitment to social responsibility than sustainable supply chain management. But even this motivation, which James characterizes as “cold, corporate and dispassionate,” creates the possibility for social impact because it fosters the long-term relationships necessary to achieve and sustain coffee quality — relationships that “give the investor a better chance of a return down the line.” Here it is important to remember that farmers, not just roasters, invest in those relationships.
During last year’s SCAA Expo, Peter Guiliano presented the microlot research mentioned above along with some relationship advice that may also be relevant here. He said, memorably, that: “Only buying microlots and not buying the regular coffee growers produce is like wanting to have a relationship with another person only on good hair days.” He continued: “If you are going to do microlots you have a moral imperative to buy coffee you are not microlotting.”
For roasters with clients in different segments of the market with different quality standards — high-end cafés, restaurants, supermarkets, etc. — that may be a fairly straightforward proposition. For roasters only interested in pushing the outer bounds of quality, it may prove more difficult.
Nick’s final plea is one for awareness.
He refers to his own time in Bangladesh as a vivid touchstone to another human reality, but one that has faded with the passage of time. Importers and roasters that source their coffee directly spend plenty of time at origin, but their forays are mostly commercial in their focus and always temporary. Over the past two decades, hundreds of U.S. roasters and importers have logged countless thousands of muddy-road miles through the coffeelands and innovated continuously to make the coffee trade more just and more sustainable. For all this effort, Nick is right — there is a stubborn awareness gap in terms of how the industry understands the way the majority of smallholder farmers live. In fact, I started this blog three years ago because of it in the hope of “pulling back the curtain on the secret lives of coffee farmers” and contributing, however modestly, to greater awareness and appreciation for the lived realities of smallholder farmers. Or as Nick might say, “the true human condition of the coffee world.”
The SCAE/SCAA have been around now for some years. I left the SCAE because their idea of education was totally focussed on Barista competitions, rather than on educating the public.
That is, I believe at the core of the problem. If the Speciality coffee industry fails to educate the public in considerable numbers, then nothing much will change until it is too late.
It is not just that the current farmers are not getting a fair deal, but look towards the future, will their sons and daughters want to follow them into the fields? If they are not properly rewarded, no they won´t! To be convinced that it is worthwhile they need to be assured of a reasonable income and standard of living. In order for that to happen, the consumers have to be educated, have to understand why their coffee costs twice as much.
Supplying Fairtrade coffee will not do it, consumers will assuage their guilt by occassionally buying it as an act of charity.
Supplying Microlots will not do it, rich consumers will tout their wealth by occassionally buying it because they can.
Only by increasing the average quality across the board can you make a sustainable difference. Only by increasing the quality, can you justify to the consumers that the price has to rise. And only with higher prices across the board can you begin to make a sustainable change to the way coffee is grown and traded.
Thanks for your comment. Your reference to the problems of what we call in Latin America “relevo generacional” — the willingness of the next generation of coffee farming families to inherit the family business — resonates deeply with me. The powerful cultural beacon of the cities, centers of technology and innovation, is a perennial lure. Unless the underlying issue of smallholder profitability is addressed, there will be little chance that coffee-growing communities can create a counter-offer or hold out the prospect of a profitable future for young people. The rock-star growers from Central America whose are justly celebrated for their relentless focus on quality and effective farm management — I am thinking of Aide Batlle in El Salvador and Arturo Aguirre in Guatemala — are shining examples of next-generation leadership in coffee. But few young people in coffee families have the resources at their disposal that they do. I have seen that many young people in the coffeelands have been attracted to roles in the coffee chain that require specialized skills or leadership — cupping, roasting, mill/coop management, etc. — but there is a steady migration of young people away from the fields.
As for your prescription for across-the-board quality increases, I think it is logical and perhaps the best bet we have collectively. I am afraid, however, that it will not necessarily translate into across-the-board price increases you call for. Prices are ruthlessly tied to the NY C market, where volatile prices are driven by lots of factors that have nothing to do with cup quality. I make reference in the post to quality standards in the marketplace that rise faster than living standards in the coffeelands. I feel like we have seen a kind of “grade inflation” in the industry in which a whole class of roasters talks casually about coffees scoring 84-86 points as middling coffees — that is a truly exceptional level of quality for a smallholder to achieve and maintain, but increasingly these coffees don’t earn premiums. It seems that the bar for entry into high-value markets keeps rising, but the price discovery process is stubbornly tied to the C market. I wish I could have more faith in your prescription!
Michael, that is the point. 84-86 points is a truly exceptional level of quality for a smallholder to achieve. But within Speciality coffee only the very best are rewarded.
I have never been awarded any barista certificate, not because I am not good enough, but because as a small independent retailer I simply dont have the time to train for such competitions. I am sure that many coffee smallholders view COE competitions in a similar way.
And the average consumer knows little about any of this. They need to be educated, but no one dares to do it.
Coffee prices have to be divorced from the NY C market in order for change to happen.
Great article. This issue is giant, important, & stares us in the face every day. I work for Higher Grounds Trading Co., a coffee roaster in northern Michigan committed to pulling back the veil & introducing our coffee-drinking consumers to the producers that make our daily fix possible. Currently our co-founder is traveling in Central America with a team of fair trade crusaders, photographers, & videographers on a mission to investigate exactly what kind of impact “fair trade” has had on the growers of our coffee. Check out fairtradechronicles.com to track the trip & the whole project as it happens. Many of the posts at highergroundstrading.com/blog also address this issue & others intertwined with it (full disclosure: I write the blog). Thanks for this astute & thoughtful post.
Thanks so much for your kind words and the plug for the Fair Trade Chronicles. Here are some kind words in return: I am a big fan of Higher Grounds and Just Coffee in general, and Chris and Matt in particular. I think they are doing extraordinary work and only regret that they haven’t gotten more credit for it.
I think this kind of exposure tour is important, and Chris and Matt spend more time in the coffeelands than most. But inevitably, they have to return to Traverse City and Madison to their day jobs. I wonder if there would be a way to create a permanent stream of content from coffee communities to the marketplace to continue to whittle away at the industry’s persistent blind spots. I have been kicking around for 4 or 5 years the idea of the “Cafe Diaries” — a kind of documentary blog from the coffeelands where all the household dramas that usually play out in anonymity in thousands of places might be broadcast to the large and growing community of coffee professionals concerned about the future of coffee families.
Thinking out loud in Quito,
Thanks for the reply. We’ve had similar thoughts about how to continue the Fair Trade Chronicles blog after the team returns–continuing to share important content through that interface, especially since we’ve gained some attention through the web series & would like to keep those people engaged & in the loop long-term. Our plan is to continue using fairtradechronicles.com as a hub for that content. I’d be interested in any ideas you might have for keeping the lines of communication wide open between homebase here in the States & our farming friends everywhere, ways to keep the conversation going, ways to keep the FTChronicles site current day-to-day. The documentary will surely help, as we can keep energy up as we approach the summer release & promote the film after that, but I’m most interested in the direct pipeline from producer to consumer: how can we best clear the obstacles that currently exist within that pipeline & maintain the flow of communication in both directions? Ideas? Perhaps a combination of Fair Trade Chronicles & the Cafe Diaries you mention? Feel free to email me if you’d rather not continue this conversation here: firstname.lastname@example.org.
I’ve been working with coffee farmers for over 8 years now (at origin as you say), please help me include the word efficiency in the general discussion. You will not be able to subsidize inefficient farmers all over the world. Improvement of coffee quality, which often goes hand in hand with improvement of efficiency, is an important tool to improve quality of life. Lets think about ways farmers can become more economically efficient, without loosing sight of social and environmental issues. 5 bags of coffee from 1 hectare of land will never be sustainable, even if you pay $ 1000 per bag!
Let’s eliminate the cause of this problem, not subsidize it out of sight! This way farmers that don’t want or can’t export high quality coffee also can get a better income!
Efficiency, is very important, as the farmers have to earn enough to make it worthwhile to continue. The problem with effiency, is not to take the short term easy route of boosting production with chemical fertilisers etc.
Whatever is done has to be sustainable for the following generations.
Thanks for your comment. Thanks, too, for calling me out for the use of “origin” and “source” to describe the communities where our coffee is grown. A friend who doesn’t work in coffee tells me that “origin” sounds like some kind of mystical lost world, like Narnia.
In our work we also think explicitly about “economic efficiency” among smallholder farmers, focusing on each of the three factors in the equation that determine a farmer’s net coffee income: income = (price per pound x # of pounds) – cost of production. In our view, there are three ways to improve efficiency and profitability: (1.) increasing productivity (so there are more pounds), (2.) increasing average unit price (so there is more $ per pound) and (3.) reducing production costs.
In the context of smallholder upland farming systems, the amount of land available to farmers is often fixed, meaning most efforts to boost production involve intensification of farming efforts on existing land rather than extensification, or planting new land with coffee using existing practices. In our experience, there is plenty of room for improvement in terms of productivity through intensification.
Back in 2008, when we started our CAFE Livelihoods project with 7.100 smallholder farmers in Mexico and Central America, average productivity was about 750 pounds per hectare — less than half of what farmers can achieve in those landscapes with well-planned and well-managed coffee plantations. In Mexico, we worked in regions where our surveys showed average productivity of 250 pounds per hectare — a far cry from efficient. While these may be extreme examples, the point is that there is plenty of opportunity there for farmers who can replace aging plants with new ones and increase the densities of their coffee fields. For farmers with chronically low productivity, these activities may represent the shortest path to improved profitability, or efficiency as you say.
Another standard approach to increasing smallholder incomes is increasing the unit price they earn for their coffee through improvements in cup quality. If farmers can double or triple their yields, investment in productivity will almost always generate greater returns for smallholders than quality improvements. But consistently achieving specialty-grade quality can help farmers increase their average unit price and upgrade the quality of their trading relationships in ways that generate “softer” benefits like increased transparency, expanded access to services and risk-sharing.
I agree with you that roasters and consumers can’t bear the burden of the inefficiencies of smallholder farmers by continuing to raise the prices they pay for coffee. And it is not the roaster or consumer’s fault that farm sizes continue to decrease through primogeniture, putting more pressure on land and therefore price. And I understand the general resistance to the idea of subsidies. But I do think it is important to provide some context to your embrace of efficiency and rejection of subsidies.
The kind of agricultural efficiency we have achieved in the United States was subsidized for more than a century through massive state investment in agricultural research and extension through the land-grant universities, which continue to make contributions to agricultural science that drive efficiencies. Few smallholder coffee farmers enjoy this kind of state support. Colombia’s excellent National Coffee Growers Federation is an outlier — most coffee research institutes that receive public funds are chronically underfunded. Some coffee growing countries don’t even have coffee research institutes. Access to the kinds of basic services that we have taken for granted — agronomic extension, credit, enterprise development — is limited. Farmers we work with know they need to make farm-level investments to compete, but don’t have the cash on hand or access to credit.
I think it is probably also worth mentioning that many smallholder farmers are not driven exclusively by considerations of efficiency. Or rather, their concept of efficiency includes powerful ecological considerations that are not marginal to their livelihoods. Clear-cutting forests and planting coffee without shade can certainly boost productivity, but the investments required in agrochemicals and the threats to soil and water quality posed by this production model are acute. Furthermore, the forests in which smallholders grow their coffee are important sources of food for consumption and market, timber and other non-timber forest products. Reducing shade cover in the name of efficiency could boost coffee productivity, but would eliminate an important hedge on smallholder risk and upset the fragile balance they seek through an agroforestry approach that balances coffee income with biodiversity conservation and non-coffee production. Even if farmers could afford such investments, many would be reluctant to make them.
I am curious to know if this reading squares with your experience “at origin.”