When we enjoy our cup of coffee in the morning, we hardly think of the processes it’s gone through to get to our cup. We are not really exposed to news about coffee as a commodity. Not if you don’t follow it closely. Here is a quick eye-opener for you.
In 2018, the price of a kilogram of unroasted green coffee was at its lowest level in twelve years. Falling below the cost of production for many East African producers. This means, a coffee farm is not a profitable business. And these farmers are living in poverty.
There is a wide range of evidence showing that the coffee price crisis has left producers earning less for their coffee than its costs to produce. Over 60% of coffee farmers experience food insecurity. This is causing them to not only deprive the business of essential investment, but also be unable to meet their basic needs, such as food, a home, health care, and education. It is sad to know that millions of small farmers live with the reality that coffee may not earn them a living wage. And they are unable to provide for their families. A substantial number of producers are saying they have unmanageable levels of debt. They know that the crop into which they invest time, energy, and capital, may not be profitable come harvest time. And that, if so, they may not have any net income to live on until the following harvest.
Like many African coffee-producing nations, Rwanda has reached a critical point in its coffee production due to the age of its farmers. What mainly pushes the youth away is the prices. To them, the market is really complicated. They see ten intermediaries between them and the buyer, so they don’t see the point. This is a common sentiment amongst coffee producers worldwide, who often take on most of the risks involved in the production of the coffee. But they end up with the smallest profit. This is a huge factor why younger generations are seeking employment opportunities in the cities. It is a concern that the coffee production workforce is lacking the involvement of the younger generations.
We need to be asking about how to improve coffee prices so that producers can afford basic human needs. We need to be creating a more equitable and sustainable industry. Roasters and coffee shops need to look for ways to add value to products that can, therefore, command higher prices. If all coffee drinkers purchased the more expensive option because it meant better prices were paid to small farmers, that would be great.
However, there is some good news. Several segments of the coffee industry are on the right track. And many roasters are shaking hands on a price that exceeds production costs. More interest is shown from consumers in transparency and sustainability than ever before. Progress is happening. It will not be overnight, but if we can work together as an industry to understand each other and leverage communication technology, things could get a lot better for the farmers. Their farm, your cup.