Blog It Café

MONDAY, AUGUST 15, 2016

Main challenges in the coffee supply chain

So what are the main challenges to be faced in order to create a more sustainable supply chain? After months of research and interviews with people working in the field I decided to write about the main issues throughout the chain.

 

 

Coffee is an important agricultural product that has been present in the daily lives of a huge amount of people, being cultivated in more than 80 countries in Central and South America, Africa and Asia. Its cultivation provides livelihoods for around 25 million farming families and involves over 100 million people in its production and processing.

 

The Coffee Sector, although increasing in importance also faces several challenges making coffee farmers, especially smallholders, vulnerable to volatile market conditions, unpredictable weather patterns and rising farm management costs. Additionally, the effects of poverty and urbanization in certain coffee growing regions make it hard for farmers to plan for the future and create a lack of interest on the new generations for the business.

 

We hear a lot about projects to increase sustainability in the coffee supply chain, from certifiers, such as Fairtrade and Rainforest Alliance to Specialty Roasters that get directly involved with producers and have cooperative relationships with them.

 

But what are the main challenges to be overcome in order to have a sustainable coffee production internationally? Why is coffee-growing not always an attractive source of income for farmers?

 

Interviewing people from institutes and certifiers, such as the Technoserve, Neumann Foundation, UTZ Certified, Rainforest Alliance and many other people from the coffee scene, I was able to gather information to point out these main challenges:

 

1- Price Volatility: Historically, coffee prices have always fluctuated a lot and it is not unusual that it goes down to below the cost of production in many countries. These price trends and economic losses have severe consequences especially for small coffee farmers affecting children’s education and healthcare.

 

2- Lack of access to finance: In most of the producing countries, access to finance is very challenging for small producers and since producing quality coffee requires a lot of investment, most of these producers do not have the money to invest on it so they are stuck to producing low quality coffee and are exposed to market volatile prices.

 

3- Deterioration of local environment: This is actually one of the most complex facts that involve many other issues. Demand for coffee is always increasing and to keep up with this trend, producers that are unable to sustainably increase Yields end up deforesting new areas to plant coffee. This results in aggravating issues such as climate change and biodiversity conservation since coffee tends to be grown in high biodiversity areas and areas of natural forest.

 

The decline in coffee prices has also led to further concerns about the impact on the more environmentally friendly smallholder producers. In some cases, decreasing prices has led to crop replacement, which is when farmers change from shade coffee to other crops such as pasture, palm oil and sugar cane, considered more environmentally damaging.

 

Processing also has an environmental impact. Wet processing of coffee uses substantial amounts of water and as the process involves fermentation of the residual pulp surrounding the cherry; it generates wastewater with high concentration of biochemical oxygen demand. Well-established treatment techniques exist but add to costs of production for producers already feeling the squeeze of lower prices.

 

4- Poor Working Conditions and lack of assistance: The pressure to compete and to reduce costs can lead to poor conditions for farm workers and limited compliance with the law. Concerns are often raised about the wages and working conditions of coffee farmers and plantation workers, especially regarding the use of child labor and the safety implications of handling pesticides. Also, small producers lack access to trainings where they could learn how to better manage their crop and have no access to processing facilities, resulting in the production of low quality coffee and therefore low payments.

 

5- Gender Inequality: In many producing countries, especially in Africa, woman are responsible for taking care of most activities in coffee production but do not participate in price negotiations or have access to the payments; the husband is the one taking the decisions and determining what should be done with the money received from sales. The consequences can be quite serious for improving coffee production since women have no incentive to improve cultivation and processing.

 

6- Lack of interest from youth: It is challenging to modernize and increase the use of best agriculture practices when the young population, usually the children from producers, have no interest to remain in the field and learn how to produce quality coffee, especially since younger people are the ones that usually have a bigger willingness to apply new methods.   

 

 

There are many organizations investing to minimize these problems but certainly something very important for the entire market is that people, especially roasters and coffee lovers, are aware of these issues in order to learn more about projects being implemented. It may seem obvious but a lot of people are not aware about the main challenges faced by coffee producers, especially gender inequality and lack of interest from youth, problems which I only got to better understand after talking to people from the Neumann Foundation and TechnoServe, since they have specific projects to overcome it.

 



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