There have been discussions here recently of the market for the $3 cup of single-serve coffee, the challenges of sourcing distinctive coffees and the current high market. I realized during a conversation last week with a veteran coffee importer that although these three discussions here were separate, they are related.
The New York “C” market price for coffee has been soaring in recent months. While high prices generally do mean good news for smallholder farmers, they can create complications for cooperatives.
I have posted references here to some of the great coffee-drinking experiences I have had in the coffeelands over the past year. Beyond their travelogue value, those posts point to an underlying market trend that may make tight markets for quality coffee even tighter — the growing number of quality-focused coffeeshops in producing countries paying premiums for exceptional coffees.
The price paid to smallholder farmer organizations is often the primary point of comparison different trading models. Unfortunately, a lack of precision can make these comparisons miselading.
The Fair Trade v. Direct Trade debate — to the extent that people are still having it — is fueled by caricatures of each approach that may reflect some grain of truth but ultimately misrepresent the realities of both.
For smallholder farmers, getting to the outer bounds of the quality spectrum — and staying there — is hard work. The marginal return on that effort — especially in a high market — may be negligible. So while we continue to promote a holistic approach to quality from the seedling to the mill, we are also continually asking ourselves how far to ride the wave of upward pressure on quality coming from the market end of the chain.
Getting great coffee to market might seem like a simple proposal. Farmers grow the coffee, we drink the coffee, and diverse actors in between perform specialized tasks that add value to the product – tasks for which they are rewarded with a share of what we pay for the coffee. In the case of coffees of extraordinary quality, the rewards to farmers and roasters – and prices for us as consumers – should be a bit higher, creating incentives all along the line for increased investment in improved quality. At least, that is the way it should be. But in Guatemala, that logic seems to be breaking down.
There are crises everyday in the coffeelands. Not macroeconomic crises, but household dramas with high stakes — the education, nutrition and health of family members often hang in the balance as these crises play themselves out in relative obscurity.
