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Special Edition Magazine, Fall 2019: Sustainability

Sustained by Sustainable Coffee

Drinking coffee is not necessarily a bad habit, but it can contribute to bad outcomes, including environmental degradation and labor exploitation. Fortunately, we have the knowledge and tools we need to clean up the industry.

NEW YORK – “Men’s natures are alike,” Confucius observed; “it is their habits that carry them far apart.” But there is one habit that unites people worldwide: coffee. The question, asked at the World Coffee Producers Forum in July, is whether the world’s coffee habit – and the industry that enables it – is sustainable.

As one of the world’s most popular beverages, coffee is crucial to the livelihoods of over 125 million people in more than 50 countries. Some 80% of the world’s coffee is grown on 25 million smallholder farms. For these producers, coffee typically represents the main, or even the only, source of income.

For smallholders, a bad crop or low prices translates into severe economic strain. This is what is happening today in Colombia and Central America, parts of Africa, and Asia, as farmers confront the lowest international coffee prices in a decade, as well as serious production challenges, including those arising from increasingly extreme weather conditions caused by climate change.

In Ethiopia, for example, five million mainly smallholder, often poor farmers account for 95% of coffee production. According to the International Food Policy Research Institute, Ethiopian coffee trees traditionally have a biannual production cycle; but over the last decade, rising numbers of farmers report that for every good year, they experience two bad ones.

In this context, it is more important than ever for coffee farmers to find ways to increase profits. But this imperative cannot be allowed to compromise sustainability. Fortunately, thanks to innovations in science and finance, profit and sustainability are no longer incompatible.

Consider the use of fertilizer and pesticides, which increase yields and protect crops from pests and diseases, but harm wildlife populations and damage human health. In a recent paper, Juan Nicolás Hernandez-Aguilera – a postdoctoral researcher at Columbia University’s International Research Institute for Climate and Society – and his co-authors offer a simple but promising alternative: shade.

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By growing coffee under a forest-like canopy of trees, rather than in open fields, farmers can enlist the pest-control services of birds. According to the study, a single bird could help save 23-65 pounds of coffee per hectare from pests every year. Using this method, farmers could avoid incurring the costs – financial and environmental – of pesticides.

Moreover, by fixing nitrogen in the soil, shade trees provide coffee trees with additional nutrients. And by reducing the temperatures in which the coffee trees grow, this method amounts to a powerful adaptation to climate change.

To be sure, shade-grown coffee trees produce lower yields. But even this loss could be offset, because, as Hernandez-Aguilera and his co-authors point out, markets often regard shade-grown coffee beans as being of higher quality. If consumers are willing to pay a premium for shade-grown beans – whether for the sake of quality or sustainability – coffee producers can embrace an approach that is better for human health and the environment.

The problem is that most consumers don’t know nearly enough about where their coffee comes from, let alone how it was produced, to be willing or able to reward more sustainable approaches. Coffee markets lack transparency and traceability, and mechanisms that help consumers navigate essential information about other agricultural goods – covering, say, the complex interactions among environmental conservation, product quality, and differential yields – are not sufficiently developed for the industry.

In fact, many coffee consumers worldwide, still purchasing the same brand at the same or an even higher price, probably do not even realize that global coffee prices have dropped. Tellingly, green coffee (the type that producing countries export) accounts for just $20 billion of the $200 billion world coffee market.

But this challenge, too, can be overcome. Blockchain (distributed-ledger) technology can facilitate full traceability (where a raw product comes from, and how it was purchased, processed, and transported) and transparency (how much was paid for the product across the supply chain).

Such a system would make it easy for consumers to choose coffee grown by environmentally conscious farmers. Moreover, it would give farmers a digital identity – including information about their incomes, farm-production levels, and certification status – thereby enabling them to access credit markets.

But environmental sustainability is not the only metric for responsible farming; compliance with labor standards should also be evaluated. And, in fact, the use of child labor remains pervasive in coffee production. In many parts of the developing world, and even in more advanced countries – such as Colombia, where child labor has been significantly reduced – adult workers often lack the most basic protections such as a minimum wage, to say nothing of social benefits, with only 4% receiving a pension contribution from their employers.

Governments must lead the way in evaluating and enforcing compliance with labor laws. But a blockchain-based system to boost transparency can help to create a virtuous cycle, by enabling consumers to reject products from farms that perform poorly in assessments of working conditions.

Drinking coffee is not a bad habit, but it can contribute to bad outcomes, including environmental degradation and labor exploitation. We have the knowledge and tools we need to make coffee sustainable. Let us start to use them.

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