Moving Beyond Coffee’s Perfect Storm by Rick Peyser, Sr. Relationship Manager, Coffee & Cocoa, Lutheran World Relief
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his year coffee prices have once again punished coffee farmers, large and small. In Central America, this punishment has been particularly harsh. In the dry corridor and beyond, smallscale coffee farmers have had to contend with lower quality and yields due to drought that has intensified the impact of the “thin months” of chronic seasonal food insecurity, which usually arrive every year with the rainy season. This year, in many areas, the rains did not arrive. The combination of low coffee prices, low yields, drought, and hunger have created a “perfect storm” that has left many families with few options other than to leave their farms. Many have headed north to the Mexican-U.S. border — not only for better economic opportunities but also for food — putting additional pressure on the already overwhelmed capacity of U.S. Customs and Border Protection. This migration has been exacerbated by the U.S. Government’s policies, including the curtailing of aid to Northern Triangle countries just when this aid was most needed.* For well over two decades, many of us in the specialty coffee industry have been proud of our industry’s progress toward sustainability. We often read that coffee may be the first “sustainable” supply chain. While many of us have worked hard for years to make this a reality, we still have miles to go before we can rest. Over these decades, there are a few things we have learned, including: • Coffee prices have failed to provide farmers with an income necessary to meet the basic needs of their families and their coffee. Farmers have been left behind as our industry has grown and prospered. Adjusted for inflation, farmers are getting poorer as our industry continues to flourish. • Many small-scale coffee farmers are overly dependent upon income from coffee, with few if any other sources of income, leaving them highly vulnerable to the impact of low prices and more frequent climate-induced events (i.e., la Roya). • Various well-intended programs funded 20 by public and private sector organizations
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continue to promote improved coffee quality and yields. These programs often feed farmers’ overdependence on coffee without considering on-farm income diversification as a strategy to improve earnings, resilience, and the farmers’ capacity to invest in their own coffee. Many small-scale farming families continue to lack access to clean water, to medical services, to educational opportunities for their children, and lack financial resources to deal with an emergency. Families continue to face food scarcity during the “thin months.” Coffee farmers are aging, with the average age approaching 60 years-old, while many young people are leaving the farm for urban centers or are migrating to seek better opportunities. Global warming will leave an increasing number of coffee farmers behind, as highquality coffee production gradually moves to higher altitudes. This will impact their livelihoods as well as the quantity and quality of coffee grown and delivered to their cooperatives. Change is coming, and the pace is accelerating.
Perhaps the most significant hurdle we have faced in our learning has been the lack of data for the actual net income of coffee farming families, the resources they need for a dignified quality of life, and the gap that may exist between these two. Fortunately, several organizations are now taking a hard look at a concept known as Living Income. GIZ (German Society for International Cooperation), the ISEAL Alliance and The Sustainable Food Lab have established a Living Income Community of Practice (living-income.com) defining Living Income as “The net annual income required for a household in a particular place to afford a decent standard of living for all members of that household.” A “decent standard of living” is defined by the Community of Practice as including: “food, water, housing, education, healthcare, transport, clothing and other essential needs including provision for unexpected events.” This concept uses methodologies that put to work in cocoa, tea, and coffee. In coffee, Living Income benchmarks are being developed in several countries. These benchmarks identify what an average-sized household needs to earn to reach a decent standard of living in a specific
December 2019
geographic area. With the benchmark identified, researchers then work with farmers within this area to determine their actual incomes and the gap between their actual incomes and the Living Income benchmark for their area. Knowing the gap and the contributions of the various sources to farmers’ incomes, farmers, their organizations, and funders can identify opportunities to close the gap. This may be accomplished through further investment in coffee production or higher prices for their coffee. Or by investing in other crops that can be grown on the farm reducing the family’s dependence on one crop while improving its income, diet, and overall resilience to economic and climatic volatility. At Lutheran World Relief, we are joining this effort to obtain more precise data to understand better what constitutes a fair price for coffee so that we can help farmers determine how best to close the gap. In my conversations over the past three decades relating to sustainability, everyone has wanted coffee farmers in our supply chains to have a dignified quality of life. The key elements of Living Income, as described above, have been our aspirational North Star. We could continue to view Living Income simply as an aspiration, but now it needs to be more than that. For farmers — and their daughters and sons — to remain engaged in coffee, there needs to be a business case that provides, at a minimum, a dignified quality of life. As we continue to push for the sustainability of our industry, enabling coffee farmers and their families to earn a Living Income is essential if we are genuinely interested in the long-term sustainability of specialty coffee. *Please take two minutes to watch this documentary that aired on the NBC Nightly News on September 21, 2019: https://www. nbcnews.com/nightly-news/video/migrantsfled-guatemala-for-u-s-after-droughtand-food-shortages-government-reportfinds-69583941618
Rick Peyser, Sr. Relationship Manager, Coffee & Cocoa Lutheran World Relief