Ensuring Economic Viability and Sustainability of Coffee Production
Coffee is the world’s favorite beverage, with an estimated 400 billion cups consumed per year. Coffee provides livelihoods for at least 60 million people, across dozens of countries. Coffee is healthful and protective against many chronic diseases. For these and other reasons, promoting the long-term health, wellbeing, and environmental sustainability of the much beloved coffee sector should be a clear priority.
Yet coffee is experiencing a sustainability crisis, stemming from unsustainable economic, social, and environmental aspects of coffee production. The recent decline in world coffee prices has further squeezed coffee producers, and thrown a tremendous number of producers below the global extreme poverty line of US$1.90 per day. While many consumers willingly pay high prices for coffee, coffee farmers receive a tiny fraction of that retail price. At these low farmgate prices, coffee production is not economically viable for a significant number, perhaps a majority, of coffee farmers.
The sustained low prices hurt even more as coffee producers begin to bear the brunt of climate change and variability. Climate change is expected to undermine the suitability of coffee across large regions, to decrease coffee bean quality, and to increase the risk of coffee diseases. The coffee industry as a whole has an interest in ensuring that coffee production can adapt to climate change, yet it currently lacks effective industry-wide responses. For now, producers lose the most when climate-induced weather events and diseases wipe out crops or reduce their quality.
Although coffee producers shoulder the biggest risks of low prices and climate-induced events, farmworkers in the coffee industry can be even more vulnerable. In the worst cases, workers have been found in “conditions analogous to slavery”—even on certified farms. More generally, farmworkers on both non-certified and certified farms can be vulnerable to exploitation, and many are not paid the required minimum wage.
There are, of course, bright spots within the coffee sector. Highly efficient producers, especially in Brazil and Vietnam, for example, are able to make a profit even at today’s low prices. Producers who grow high-quality coffee and who are able to access ethically-minded specialty roasters can command prices significantly above the quoted international price. Some producers have found ways to capture more of the final retail price, including through producer-owned businesses that sell directly to consumers. Yet these remain bright spots juxtaposed against the grim reality faced by producers around the world.
Four years after the adoption of the Sustainable Development Goals (SDGs), and in the face of the ongoing price and climate crises, the coffee sector now stands at a crossroads. Will the coffee sector continue following a business-as-usual trajectory of limited and piecemeal sustainability endeavors, which would ultimately result in further concentration of coffee producers and heightened supply risks? Or will the coffee sector undertake strong concerted efforts to support a more sustainable and resilient future for producers and the sector overall?
Based on our research, we believe there is a clear opportunity for coffee sector actors to work together to achieve greater sustainability within coffee production and in coffee-growing regions. Below, we provide a brief summary of our findings and recommendations.
http://ccsi.columbia.edu/files/2018/04/Ensuring-Economic-Viability-and-Sustainability-of-Coffee-Production-CCSI-2019.pdf