You may remember a crusty old curmudgeon named Andy Rooney from back in the day when network television ruled the media. He was the original Ron Swanson. His big, white, caterpillar eyebrows stayed parked in a near permanent furrow as he closed out every episode of 60 Minutes with his eponymous “A Few Minutes with…” segment in which he’d sit behind a big walnut desk and complain about small annoyances of modern life. If he were still with us today, he’d no doubt have the phenomenon of “social media holidays” in his cross-hairs. I can already hear that gruff voice, that terrified me as a child, droning on about the ridiculousness of International Podcast Day, Reptile Awareness Day or World Emoji Day. And, let’s be honest, for the most part, he’d be right. In a lot of ways, it’s gotten totally out of hand. However, while we’ve all got a little cynical Andy Rooney within each of us, if we’re honesty, there’s also a little child stuck inside of us that loves the idea of EVERY SINGLE DAY being a holiday, no matter how arbitrary the cause for celebration is. This is doubly true when it comes to the little things that really are worthy of their own day, like puppies and tacos and Star Wars and, of course, coffee. Which brings us to this string of days throughout the end of September and early October when the world celebrates International Coffee Day (the exact date varies from country to country).
Some may disagree that coffee deserves of its own holiday, but no one likes those people, because they’re obviously and emphatically wrong. Coffee is a small miracle that transcends cultures, boosts productivity, brings people together, and has a host of incredible health benefits. Anthropologists and social scientists have even theorized that the widespread adoption of coffee and tea into Western Culture may have actually sparked the Enlightenment. But here’s the deal; International Coffee Day is not about celebrating coffee solely on its own merits. The International Coffee Organization created the holiday in 2015 to raise awareness for the plight of coffee producers.
Coffee is a $100+ billion industry predicated almost entirely on growers living between the 20th parallels in some of the most economically disadvantaged places on Earth. Given its massive global reach, coffee can be used as a tool to empower those who produce it, or as a weapon to oppress them. Sadly, much of coffee history is littered with stories of the latter: slave labor, price fixing, greedy speculation, environmental abuse, even extortion and outright theft. However, decades ago, a small movement began within the coffee industry to right those wrongs and create more equitable and sustainable supply chains to benefit those who put in the hard work to cultivate this miraculous crop. Over time more and more roasters, importers and retailers have joined in. Great strides have been made over the years as we’ve seen the prices of specialty grade green coffee rise, implementation of sustainable agriculture, and an increase in transparency and shared knowledge between producers and roasters. Unfortunately, while progress has been made, it has also become apparent that the coffee industry is a very large ship with a tiny rudder. This has become painfully apparent over the past year as the industry has been experiencing what has been dubbed a “coffee price crisis”.
So What is Going On?
To understand exactly what the “coffee price crisis” is, we first have to understand the ways that green (raw/unroasted) coffee is traded on the global market. In the most simple terms possible, coffee is basically traded one of two ways; directly between the buyer and seller (i.e., roaster and producer, or importer and producer) or on the global commodities market where coffee futures are traded on an international exchange, much like corn or soy or even pork bellies. The latter is what we refer to as the “C-Market”. Secondly, we have to understand how coffee is grown. Again, I will simplify this down into essentially two categories; smallholder/family owned coffee farms and big agribusiness. Arabica coffee is a very delicate and temperamental crop, it has to grow at high elevation, is susceptible to a particular fungus called “coffee leaf rust”, and thrives when shade grown in a bio-dynamic environment. This is why most coffee in the world is still grown the old fashioned way, utilizing smaller farms and lots of labor and attention. However, global demand for coffee has caused an increase in more “modern” farming practices that involve clearcutting forests and planting coffee like row crops. Since the coffee plant does not thrive naturally under these conditions, farming this way relies heavily on the use of man-made fertilizers and pesticides. This method of coffee growing produces an inferior product at great environmental cost, but does so with much less labor, which pushes its cost of production much lower than that of traditionally grown coffee.
Now here’s how that plays out in the global green coffee buying market. The efficiency of this automated, large scale, low quality farming has a tendency to create supply increases as it floods the market with this lower quality coffee. This drives the “C-market” price down. Currently, the C-market price of arabica coffee is below the cost of production for most smallholder farms, meaning some coffee farmers are faced with selling their crop at a loss just to have the cash to survive and hope that the next year will be better.
What’s the Solution?
That’s the (several) billion dollar question. There are many complexities at work in the coffee market that are difficult to explain in a single blog post. These complexities make it difficult for lasting change to happen quickly. However, there are two simple and honest ways to begin answering the question. The first is that coffee roasters and importers must pay more for green coffee. Of course, as coffee roasters and importers pay more for green coffee, much of that cost does get passed on to the consumer. To many, this seems untenable. However, there is a tried and true path over that hurdle: quality. As quality increases, demand increases and, of course, the price increases. It’s a win/win scenario. The coffee drinker gets a better product, the producer gets a better price. Historically, however, high quality coffee has been tough for the average consumer to come by. The “gourmet coffee” industry is littered with scams and hoaxes; from grifters peddling Kopi Luwak and “bulletproof” coffee to “luxury” mail order coffee brands found in the pages of in-flight magazines. But over the past decade the craft coffee sector has grown tremendously and consumers are gaining more and more access to high quality coffee. This has pushed the craft coffee industry into a trajectory similar to the explosions seen in the fine wine and craft beer industries over recent decades. This is good news for farmers, as it creates incentives for growing high quality varieties and utilizing processing techniques that deliver an end product which demands a higher price. This is only half of the solution, though.
The second answer to the question involves increased efficiency and transparency within the coffee trade. This is where direct trade relationships come in. There are certain “middle-men” in the coffee industry which are truly necessary and helpful; logistics firms, warehousers, farmer-owned/aligned importers, etc. Day traders and speculative commodities brokers are not among these. The more efficiently and transparently roasters can build relationships and do business directly with farmers, the less waste there is in the supply chain and more trust is built in the link that runs from the seed to the cup. These relationships also insulate farmers from the volatility of C-market pricing and allow them know what they are getting for their crop year after year so they can plan and grow their own small businesses, creating people jobs at origin and positively impacting their local communities.
So You Mean Fair Trade Coffee, Right?
Sadly, no. And this is why… The aspirations of “Fair Trade” are quite admirable, and in many industries, Fair Trade Certifications are trustworthy and indispensable. Unfortunately, coffee is not one of those industries. For reasons that are beyond my comprehension, all major “Fair Trade Coffee” price certification models are based on the flawed C-Market price. Essentially, all “Fair Trade” means in the coffee industry is that the producer is getting around a $0.25/lb premium (depending on the certifying organization) on top the current C-market price which, as we have discussed, is set not by famers, roasters, importers or even coffee consumers, but by Wall Street speculators who never actually touch the coffee in question. This means that if the C-market price drops below the cost of production (which is sadly common over the past few months) even a “Fair Trade” coffee is in danger of being sold at close to, or even below, the cost of production. Furthermore, most Fair Trade labeling organizations take an additional ten to fifteen cent/pound royalty on the sale of the coffee. Could you imagine your local farmers market filled with growers who produce vegetables at cost of $1/lb, selling them at $0.90/lb with a dime of that going to an organization that waves a banner over the market proclaiming how “fair” it is?
If Not Fair Trade, Then What?
It’s an excellent question, and one without a simple answer. But the best answer I can give is that we all just have to care a little more. I think the best way to do that as a coffee drinker, barista, roaster, restaurant/office/church coffee buyer, etc. is to simply ask the question, “where did this coffee come from?”. At Prevail, the answer is always, “from our friends”. If it’s from Costa Rica, it’s from our friends the Oviedo Family or our friend Marianella Jost who work together in a farmer owned/farmer managed cooperative project called the Farmers Project Costa Rica. If it’s a coffee from Ethiopia it’s from our friend Sam. Samuel Demisse was born and raised in Ethiopia. He has since immigrated to the US and founded a coffee importing company called Keffa Coffee that specializes in Ethiopian coffees from the farmers and co-op managers that Sam grew up around. If it’s a Rwanda Coffee, it comes from our friend Sarah and her team at Kula Project, which has been dedicated to economic empowerment and the eradication of poverty in rural Rwanda for going on a decade now. And if the coffee is from Guatemala, well… that’s from family. Paulina Schippers (or Tia, as my kids call her) grew up around her father, John’s coffee farm in Guatemala. An opportunity to play college tennis brought her to the states and now we work alongside Paulina and Schippers family to bring their incredible coffee to our community. And if you are in the Montgomery Area, you can come hang out with us and Schippers family this Thursday, October 3rd from 6pm-8pm at our Prevail Union Cafe, and hear even more about the ways we can work together to make the vision of International Coffee Day a reality.