Sustainable, Organic and speciality coffee production, processing and marketing

By K.R. Chapman, Plant Production Officer (Industrial Crops)

February 1, 2000
FAO Regional Office for Asia and the Pacific, Bangkok. Thailand

Introduction to the First Regional Round Table on Sustainable Organic and Specialty Coffee, Production Processing and Marketing

Why This Meeting?

Coffee in dollar terms is the second most traded product in the world after petroleum.

Coffee throughout the world including the Asia/Pacific region produces an income for millions of small farmers and their families, who are often totally dependent on the crop for their livelihood.

World coffee prices are at their lowest levels for many years and the very existence of many small farmers is at stake. Such prices represent a real threat to the industry and especially to those producing high quality coffees, which cost more to produce, Lingle, 2000.

In various countries high input coffee production is causing soil degradation, water table pollution, water table lowering and environmental contamination in some parts of Asia/Pacific.

Coffee can be produced in many different ways ranging from very low input "shade" or `forest" coffee to high input sun grown coffee. Some ways in which coffee is produced can be sustained for very long periods of time, while some cannot. The reasons are complex, but involve all aspects of the production, processing, post harvest management and marketing of the product in any given farming system.

To gain some idea of the importance of sustainable coffee production throughout the world, when I entered the words "Sustainable Coffee" into an Internet search engine the search of the Worldwide Web came up with nearly 32, 600 references on the topic! The result speaks for itself.

In fact we know there are ways and practices, which will make a difference to the quality of life of small coffee producers, while ensuring that their farming systems and incomes are both improved and sustained. We need to make countries of our region aware of these interventions and explore and derive approaches to extending these practices to small farmers in the Asia/Pacific region. In short "Make it Happen."

Some Definitions

Sustainable Agriculture and Sustainable Coffee

Again there are almost as many definitions of sustainable agriculture, sustainable coffee production and sustainable agricultural development as there are references on the Worldwide Web. However, being reared on a small farm myself I favour the following philosophical definition:

" A farmer should live as though he were going to die tomorrow, but he should farm as though he was going to live forever." (Evans 1966).

Appropriate Technology Transfer for Rural Areas (ATTRA) in 1997 defined as follows: "Sustainable Farming is a management-intensive method of growing crops at a profit while concurrently minimising negative impact on the environment, improving soil health, increasing biological diversity, and controlling pests. Sustainable Agriculture is dependent on a whole-system approach having as its focus the long-term health of the land."

ATTRA 1997, goes on to state that "It is widely agreed that a truly Sustainable Farm System must be sustainable economically, ecologically and socially," to which I would add "and technical feasible within a given system."

"To be Economically Sustainable, farms should generate sufficient equitable returns to support farm families and to provide an economic base for the surrounding community. To be Ecologically Sustainable, farming methods must be modeled on nature to foster energy flow, effective water and mineral cycles and viable community dynamics and to be Socially Sustainable, agriculture should promote the physical, spiritual, cultural and economic health of farm families and communities." (ATTRA 1997).

Finally, we should understand that Sustainable Agriculture is neither high nor low technology, but Appropriate Technology that varies considerably from farm to farm unlike conventional approaches, which tend to be prescription orientated.

Specialty Coffee Association of America (SCAA) in referring to Sustainable Coffee defines as follows: "Sustainability is growth which satisfies the needs of the present without compromising the ability of future generations to satisfy their own needs," Sosa, 2000.

More particularly The Smithsonian Group in 1998 suggested that "Sustainable Coffee is produced on a farm with high biological diversity and low chemical inputs. It conserves resources, protects the environment, produces efficiently, competes commercially and enhances the quality of life for farmers and society as a whole." The group suggested guiding principles for the development of Sustainable Coffee and specific environmental and social issues, criteria for shade management, agrochemical use, pollution control and energy conservation in processing, social and economic relationships, Greenberg, 1998.

In the US sustainable coffee niches are still small e.g., certified shade grown coffee sales are only US$ 3-6 million per year, while organic coffee sales are between US$ 75-125 million per year, Griswold, 2000.

N.B. Sustainable Agriculture is not exclusively Organic Farming, Wilson and Tychniewicz 1995. However, others consider that sustainable coffee should be as organic as possible, Rhoads, 1997.

Organic Coffee

Organic Coffee is coffee grown completely free of synthetic chemicals. The land must have been free of synthetic pesticides or fertilisers for the past three years as a pre-requisite for registration, Rice and Ward, 1996.

Burnett, 1998, states that Organic Coffee is the fastest growing segment of the US$2.5 billion Specialty Coffee Market, although it accounts for only about 5 percent of the market in the US. He points out that certified organic coffee farmers earn 15-20 percent more for their beans than non-organic coffee farmers. Also, he points out that organic coffee is not necessarily any purer than coffee grown with pesticides as the pesticides are destroyed in the roasting process, with perhaps the exception of DDT residues, although DDT is rarely used on coffee today. However, buying organic coffee supports a system that is improving the lives and health of poor farmers and the environment and helping to provide more equity for such people. Organic coffee promotes the use of many sustainable agricultural practices, that conserve and protect and often improve the environment.

Organic coffee has been growing at a rate of 25 percent per year since 1993, Griswold , 2000 and in the US sales are far bigger than for sustainable or "fair trade" coffee.

Organic coffee is not automatically of high cupping quality as many of us, including Burnett, 1998, have noted.

Organic coffee certification is an expensive process and annual inspections may cost tens of thousands of dollars for coffee cooperatives, Rice and Ward 1996. Organic coffee may also be more labour intensive, depending on the farming system used for its production, Lane. 1994. This is an issue we hope to explore more in the Round Table meeting, along with procedures required.

There is considerable debate between various players on what is Sustainable Coffee and what is Organic Coffee. Adam Tietelbaum from Adam's Coffee and members of The Organic Coffee Association (ORCA) established in 1998/99 in the US, maintain that with regard to coffee " If it is not organic it is not sustainable." This view is not necessarily shared by others such as the Sustainable Coffee Coalition, which describe Sustainable Coffees as those coffees grown with low or preferably no synthetic chemical inputs into the system. Tietelbaum 1997 indicated that the above mission statement did not indicate which petro-chemicals qualify as "low toxicity" and can be used on coffee, and that a whole new certification bureaucracy, with all its associated costs, is needed to certify Sustainable Coffee.

We expect these issues will be debated at length for the Round Table Meeting, along with implications for introduction and certification.

Specialty Coffee

"Specialty Coffee is Quality Coffee....Where effort and consciousness is given at every step to bring the potential for quality into the cup. " SCAA 2000.

It begins with the variety of tree that is grown, to the manner of its harvesting, to how the bean is roasted and the skill with which it is brewed. The specialty coffee industry is composed of those people and businesses that have dedicated their lives to quality coffee. In the US their trade association is the Specialty Coffee Association of America (SCAA). The Mission of the SCAA is to serve the specialty coffee industry through the development and dissemination of information that fosters coffee excellence within the trade.

SCAA membership totals over 2,500 companies and individuals dedicated to specialty coffee.

The SCAA has become the focal point for the development of standards for coffee quality.

Ted Lingle, of SCAA has produced The Coffee Cupper's Handbook, and The Coffee Brewing Handbook, both books considered to be mandatory references for the trade. The SCAA has also published the Green Coffee Classification System, as well as developed such products as the Roast Color Classification System - the industry's first definitive method for objectively identifying roast development; and, the Brew Master's Analysis Kit.

Many companies, retailers, producers, exporters, associations etc., throughout the world are involved in the Specialty Coffee industry which is estimated to have a market value of US$ 2.5 Billion per year, Burnett, 1998.

Specialty Coffee does not imply that it is organic or sustainable coffee, but it may be either or both.

Specialty Coffee may or may not be Gourmet Coffee, depending on how we define the two terms. Sometimes the latter may be used loosely to cover all expresso beverages and their derivatives in general as well as true premium whole bean varieties, Nelson, 2000.

Ted Lingle, 2000, Executive Director of the Specialty Coffee Association of American considers that the underlying issues of Specialty Coffee have to do with value versus specialty or uniqueness. He considers that many coffees have good values, but not all are special. The specialty coffees that are truly unique are getting harder to find. The specialty coffee industry was created on the basis of uniqueness and he considers the industry has to go back to this uniqueness, and re-focus on the bean as the wine industry does on the specific grape.

Fine Gourmet Coffees, as defined by the International Coffee Organisation, are being sought out in a major project "Development of Gourmet Coffee Potential" in Brazil, Burundi, Ethiopia, Papua New Guinea and Uganda in a US$ 1.4 million project funded largely by CFC (Common Fund for Commodities). E.G., in Brazil fine gourmet coffees were selected by competition in October 1999 and sold by innovative Internet Auction in December 1999. Premiums realised for these gourmet coffees were 60 percent over normal good quality Brazilian Arabicas. These Gourmet Coffees are unique and thus are true Specialty Coffees.

Some Key Issues and Where Do We Want To Go?

Fair Trade Coffee

Some wholesalers, grinders, merchants etc., are involved in Fair Trade coffee. Fair Trade means that the bottom price per pound is set to insure farmers an income from growing coffee. If the coffee market in New York goes below that price, the farmers growing Fair Trade coffee will still get that floor price. If coffee goes above the set price, the farmer will get the higher price. So farmers are protected on the lower end of the market. Coffees may then be retailed as Fair Trade Coffee and certified with Transfair USA, Griswold 2000.

In the US Cooperative Coffees Inc. has been formed to purchase green coffee from and in partnership with small-scale cooperatives. They use the Fair Trade price described above. Also, coffee importers provide a certain amount of credit to farmers against future sales, helping farmers stay out of debt to local coffee "coyotes" or "loan sharks' who charge unreasonable interest rates. Importers and roasters agree to develop direct long-term trade relationships with producer groups, thereby cutting out the middlemen and bringing greater commercial stability to the extremely unstable coffee commodities market. These cooperatives must be farmer owned, democratically managed and must demonstrate their ability to produce and deliver exceptional specialty coffee. E.G. Heine Brothers Coffee (2000) buys coffee from 3 cooperatives in Guatemala, 2 in Mexico, one in Nicaragua, 2 in Costa Rica, one in Sumatra and one in Cameroon.

Quality Improvement and Specialty/Gourmet Organic Coffee

As we have seen above Specialty/Gourmet coffee is a growing market for true high quality coffee. In April 2000 the Sustainable Coffee Association of America signed a special agreement with the United States Agency for Development (USAID) to ensure that future development in coffee-growing regions focus on producing higher-quality specialty coffees. Because creating better tasting specialty coffee is the best means of increasing farmer incomes, Griswold, 2000. Thus future plantings should be of very high quality coffees planted in the best environments to produce quality coffees.

The Challenge really is turn coffee from being a commodity into a higher priced quality product such as the wine grape is to wine. The paradox is that coffee is a product for which the price paid to the farmer is at the level of a lowly commodity, while the end product often sells as a luxury item.

The choice to move to the next step of organic coffee production has to weigh costs against receipts and ensure that quality goes hand in hand with organic production. As mentioned previously the organic coffee industry is expanding at a very rapid rate but specialty/gourmet organic coffees are not at all prevalent in the market at the present time.

Sustainability

To my mind sustainability of the production system is the key issue and is paramount to the long-term survival of the coffee industry. The Coffee Farming System must be sustainable economically, ecologically and socially, and technically and practically feasible. If farmers cannot achieve such goals then coffee production will not survive.

There are many different options and models of how to get there. Organic farming may or may not be involved, permaculture, bio-dynamic techniques may be employed, composting and associated fruits and vegetables may be used, livestock may be involved, shade may be provided by a commercial fruit tree or a Neem tree and so on. However, in each instance high quality coffee must be the central theme in sustainability if farmers are to improve their incomes and living standards.

How Do We Get There?

The how of it all is what we are about in this Round-Table meeting!

What we trust will emerge from this gathering are examples of how to produce better quality coffee, sustainable coffee and organic coffee, using the experience of current practitioners and the combined knowledge of the group and the coffee world.

The Complete System Package and Making it Happen!

Like any high quality product and its delivery to the consumer there are many operations involved in the complete coffee system package. The operations involve production, processing, waste management, post-harvest handling and management, quality control, fair price trading, shipping, sale, storage, roasting, blending and sale of the product. For success and sustainability all system components must function efficiently and serve to produce the finest and most consistent quality of product to the consumer on a regular basis over time.

Again we hope to explore many of these aspects in the meeting and emerge with a practical means of delivery of such systems in Asia/Pacific. Already there are some good examples of success and these experiences will be shared at the meeting and workshop and ways devised to replicate such successes.

As with all work with small farmers, the clear objective is to produce a range of input, output and management options that are technically and practically feasible and in the long term ensure economic, social and ecological sustainable livelihoods derived from a coffee based farming system. I.e., a Complete Coffee System Package.

The challenge is then to combine this knowledge and wisdom into a Regional Project to help "Make it Happen" for our smallholders and the coffee economy of the Asia/Pacific region. One major task here at this Round Table meeting is to formulate the basis of such a project, based on knowledge provided and deliberations over issues, findings and recommendations in Day 2 of this gathering. Finally, in short we need your help to "Make it Happen!"

References

ATTRA, 1997. Making the Transition to Sustainable Farming. Appropriate Technology Transfer for Rural areas. (ATTRA). www.attra.org/attra-pub/trans.html

Burnett, 1998. Mexican Coffee cooperative Seeks Better Prices, Working Conditions. Sustainable Development Reporting Project-Mexican Coffee Cooperatives. www.lanic.utexas.edu/project/sdrp/coffee.html

Evans, G.E. 1966. East Anglia. In " Regenerating Agriculture", by J.Pretty. 1995. Joseph Henry Press, Washington. D.C.

Greenberg, R. 1998, Criteria Working Group thought Paper on Sustainable Coffee. Smithsonian Migratory Bird Centre, Washington D.C.

Griswold, D. 2000. The Future of Sustainable Coffee. In "Fall Coffee and Tea Handbook." Nov. 2000. The Gourmet Retailer. www.gourmetretailer.com

Heine Brothers Coffee, 2000. The Coffee Cooperative. About Cooperative Coffees Inc. Press Release. www.heinebroscoffee.com/coopcoff.htm

Lingle, 2000. The State of the Specialty Coffee Industry. In, "Fall Coffee and Tea Handbook." Nov. 2000. The Gourmet Retailer. www.gourmetretailer.com

Lane, H. 1994. Coffees with Conscience. Magazine: E/ The Environmental Magazine.

Nelson, R. 2000. The Consumer. In "Fall Coffee and Tea Handbook." Nov. 2000. The Gourmet Retailer. www.gourmetretailer.com

Rhoads, D.1997. From First Sustainable Coffee Conference to Coffee Cooperative. www.heinebroscoffee.com/organic.htm

Rice, R.A., and Ward, J.R.1996. Coffee, Conservation and Commerce in the Western Hemisphere. In, "How Individuals and Institutions Can Promote Ecologically Sound Farming and Forest Management in Northern Latin America." Natural Resources Council and Smithsonian Migratory Bird Centre, White Paper. Washington D.C.

SCAA, 2000. About Us. Specialty Coffee Association of America. www.scaa.org

Sosa, E. 2000. Sustainable Coffee: The Road Back for Nicaragua. www.sallys-place.com/beverages/coffee/nicaragua.htm

Tietelbaum, A. 1997. Sustainable Coffee. Adam's Organic Oracle No.2 Spring 1997.

Wilson, A., and Tychniewichz, A. 1995. "Agriculture and Sustainable development: Policy Analysis on the Great Plains. Winnipeg: International Institute for Sustainable Development. pp. 108. ¹