Today, we’re very happy to present the first episode of”Cost of Production and Profitability for Coffee Producers,” a session recorded at Re:co Symposium this past April. Buyers and producers alike have to understand what is necessary to create specialty coffee so that it can be produced sustainably, so we convened experts to ask: Do we really understand what specialty coffee prices?
SCA Lead Scholar Taya Brown worked with many communities of smallholder coffee farmers in Yepocapa, Guatemala to better understand the obstacles they face in uptake of new technologies. Profitability was shown to be the main constraint, affecting nearly all facets of production, sale, and invention. Addressing low profitability, however, isn’t as straightforward as one may think. To gain true autonomy, farmers want more than just higher costs – they want to better understand how their particular field, harvest, and post-harvest management affects their coffee’s quality, value, and potential to reach higher-paying markets.
Special Thanks to Toddy
This talk from Re:co Boston is supported by Toddy. For over 50 years, Toddy new cold brew systems have thrilled baristas, food critics, and regular folks alike. By extracting all of the natural and delicious flavors of coffee and tea, Toddy Cold Brew Systems turn your favorite coffee beans and tea leaves into fresh cold brew concentrates, that are ready to serve and enjoy. Learn more about Toddy at http://www.toddycafe.com.
Table of Contents
2:20 Smallholder farmers aren’t profitable and are leaving the coffee business
5:15 Smallholder farmers have a lack of resources and that translates to a lack of confidence, which requires motivation, support and education to solve.
11:30 Introducing ECA Montellano, a Guatemalan cooperative, describing in their own words their hopes for the future, what motivates them and what education and support they need from the specialization community.
Full Episode Transcript
Peter Giuliano: Hello everyone, I am Peter Giuliano, SCA’s Chief Research Officer. You’re listening to an episode of the Re:co Podcast, a series of the SCA Podcast. The Re:co host is dedicated to new thinking, discussion, and leadership in Specialty Coffee, featuring talks, discussions, and interviews from Re:co Symposium, the SCA’s premier event dedicated to amplifying the voices of people who are driving specialty coffee ahead. Check out the show notes for links to our YouTube channel where you can find videos of those talks.
This episode of the Re:co Podcast is supported by Toddy. For more than 50 years, Toddy brand cold brew systems have thrilled baristas, food critics, and regular folks alike. By extracting all the natural and delicious flavors of tea and coffee, Toddy Cold Brew Systems turn your favorite coffee beans and tea leaves into fresh cold brew centers that are ready to serve and enjoy. Find out More about Toddy in toddycafe.com. Toddy: Cold brewed, simply better.
Re:co Symposium and the Specialty Coffee Expo are coming to Portland in April 2020. Don’t miss the forthcoming early-bird ticket launch – find us on social media or subscribe to our monthly newsletter to keep up-to-date with all our announcements.
Today, we’re very pleased to present the first episode of”Cost of Production and Profitability for Coffee Producers,” a session listed at Re:co Symposium this past April. Buyers and producers alike have to understand what it takes to create specialty coffee so that it could be produced sustainably. So we convened experts to ask: Do we really understand what specialty coffee costs?
SCA Lead Scholar Taya Brown worked with many communities of smallholder coffee farmers in Yepocapa, Guatemala to better understand the obstacles they face in uptake of new technologies. Profitability was found to be the primary constraint, affecting nearly all aspects of production, sale, and innovation. Addressing low profitability, however, isn’t as straightforward as one may think. To obtain true autonomy, farmers want more than just higher costs – they want to better understand how their particular area, harvest, and post-harvest direction affects their coffee’s quality, value, and capacity to achieve higher-paying markets.
Also, to help you follow along with this podcast, I will chime in occasionally to help you visualize what you can’t see.
2:20 Smallholder farmers are not profitable and are leaving the coffee business
Taya Brown: Good morning. So, as was mentioned in the introduction, I’ve been working with a few communities of smallholder coffee farmers. This has been for the greater part of the last 3 years at a region of Guatemala known as Yepocapa. If you’re acquainted with Antigua in Guatemala, imagine going from Antigua around to the other side of the Fuego volcano, and you will be in Yepocapa. Thus, we’ve been studying the obstacles to uptake of technologies within these smallholder coffee farming communities and unsurprisingly, what we found is that profitability is the major constraint that these farmers face and this is across the board which affects their capacity to innovate, sure, but it also affects your ability to perform pretty basic things like fertilize. Farmers are having to make decisions concerning the amount of fertilizer they’re using, about how often they fertilize, how often a year they fertilize and are they able to make these decisions and do this as often and as much as they want to in order to have healthy plants?
We do see that farmers are becoming disenchanted with this situation as costs continue to stay low and have been low now for a few years in this area and we do see the farmers have begun to leave coffee. So, these Yepocapa farmers are finding other crops or sending a relative outside of the area to the city or to another country to bring in an income to help sustain the family and that I had been asked to come here today and speak to you about this issue of profitability from the perspective of the smallholder farmer. And I had been thinking about that and what I could bring to this discussion that might be useful and I had been considering how we’re the specialty coffee market. This is the Specialty Coffee Association occasion. Thus, we can pay a higher price. I’m sure that many of you that are in the market now pay really reasonable prices for some of the coffee that you purchase. The issue is that the quality must be there, so the quality has to be there for the coffee to have the value for us to have the ability to pay the prices which may make coffee a little more profitable for the manufacturer. We have a real interest in supporting the smallholder farmer as they produce a significant quantity of the world’s coffee supply.
Consequently, they’re having a massive effect on our industry. But, in reverse, our sector, especially specialty coffee, can have a large effect on them.
5:15 Smallholder farmers have a lack of funds which translates to a lack of confidence, which requires motivation, support and education to solve.
Peter Giuliano: On display, a slide countries “Smallholder farmers produce 80% of the world’s coffee. ”
Taya Brown: So, many of these farmers, coffee manufacturers are dealing with all kinds of issues and to showcase this and bring this house we superimposed what we believe the international coffee belt where coffee is produced over three other worldwide belts.
Peter Giuliano: Taya has three maps of the world, flattened out and side by side. There are two horizontal lines running across the three maps. The southern line runs through Bolivia and Madagascar, while the northern line intersects Mexico and northern India. Everything involving these two lines is the coffee belt. Taya’s map also reveals that the coffee belt intersects many countries facing major conflicts, hunger, and malaria.
Taya Brown: Sothis is the conflict belt where civil war has been more recent oftentimes within the last 30 years. So, if you consider that and the average coffee farmer is 55 years old. That means that the average coffee farmer has lived through civil war in their lifetime. These other two maps are the world hunger map that’s showing where malnutrition and starvation are concentrated around the globe. There’s the malaria belt where communicable disease is more widespread on the planet. So, this is evidence. This is showing you how coffee producers are living and the lack of funds which can be found in these areas. One of the things that happens when you grow up with the lack of source is you have a lack of confidence. You’re not quite sure what your options are? You have limited choices, and if you want to do something more on your own, you’re not quite certain how to do this and this is something which I actually have personal experience with.
So, I’ll explain to you why I personally identify with the smallholder coffee farmer. I was raised in one parent, low income household in South Seattle. My mom was pretty preoccupied as I was growing up, I was left to figure things out, kind of on my own and without plenty of resources and I was watching my friends or my friends were just like me, you know, from broken homes, sometimes having drugs in the family background, low history of formal education and the household, low resources. We all just trying to determine what to do with ourselves in the situation we found ourselves in my own experience, and then watching the experience of people who I spent the most of my time with and have cared about. I’ve been really curious and paying attention to exactly what is it that causes somebody or what is it that enables somebody to bring themselves up when they’re in a situation where they have low funds. Thus, you can either have resources or you don’t and what do you do in the case that you don’t? So, what I’ve realized or what I’ve come to in my paying attention to this over the years is that these are the three variables which are involved when resources aren’t. There’s motivation, there’s support and there’s education. So, motivation will establish as a drive to do something more. This is an ambition that comes from within oneself and knowing that there is something greater than us and wanting to connect to that larger, greater thing.
Support. Support I will define as an effort made by someone else in your direction that helps you do something that you were unable to do otherwise because you lack the tools, lack the confidence or lack the know-how and so this is something which somebody else could give to you when you don’t have those things and I’ve received a lot of support within my life. I think people were able to see I had a good deal of motivation for a kid, that I was interested in science and art and these larger things and that I wasn’t going to have the resources I had to do something with that, with what was available in my context. So, people jumped in and gave me support and in some cases, this was grants or fellowships, monetary support that have helped me get through school. In some cases, this was only somebody lending me their ear to listen or a space. I recall in high school, I had an art teacher that I’d like to hang out in his room in my free periods, and that I managed to only do arts and speak to him about things and just sort of be me and have some self-expression from the art I was doing and that I didn’t have a good deal of spaces like that at that time in my life. That was a massive support to me.
And the other element is education. Education is indestructible capacity. You cannot destruct this capacity. This is knowledge about things that help us to make more profound and more ranging and better choices and this is truly the trick to making us different. If we want to live in a different kind of a context, we need to be able to fit that context and in reverse as we change ourselves the circumstance around us changes also, and education is actually the secret to that, to getting different, to changing fundamentally who we are and to find that ripple effect in the world around us. And I don’t believe that my friends that I grew up with are no different from smallholder farmers around the world that are growing up without a lot of resources, but that want to attain something more with themselves.
11:30 Introducing ECA Montellano, a Guatemalan cooperative, describing in their own words their hopes for the future, what motivates them and what support and education they need from the specialty community.
Taya Brown: I would like to introduce you to one of the region’s or one of those communities that I work with. This is ECA Montellano. They can be found in a town named Hermogenes Montellano, which is right outside of Yepocapa. This is a combined or an organization of smallholder farmers who are 187 of these, 187 members. They’re about 32 years old. They farm java on what was a large finca up before the war and was re-appropriated to smallholder farmers. These people will come from four distinct parts of Guatemala to be here. Therefore, after the war they traveled to this area to set up camp and start java farming and there’s a small group of this membership that’s realizing that if they change a little bit of what they’do, they can have a product which the specialty marketplace may be interested in and so they’re forming this group and they’re trying to figure out what they have to do in order to have a coffee that might be worth, you know, might have more value and so last year they began selecting out some coffee that they picked really well. Consequently, they thought, you know, what’s the easiest thing for us to do? We can just try to select our coffee the best as possible, and we’ll have only adult beans, and that’ll be specialty coffee and what they’re beginning to realize in this process is that there’s a great deal for them to learn. So, picking is a great place to start, but there will be a lot more for them to learn. So, I’m going to let them introduce themselves to you.
Peter Giuliano: Taya is playing with a movie featuring ECA Montellano. Because they only speak Spanish and their videos have English subtitles, I will interpret some of what they’re saying.
Francisco Kelel: Buenos días. Mi nombre es Francisco Calel, el presidente de La Vigilancia La ECA Montellano… con todo gusto, saludo para toda ustedes.
Peter Giuliano: Francisco Kelel is president of vigilance at ECA Montellano.
Teresa Orosco: Buenos días. Mi nombre es Teresa Orozco y soy parte del Comité de Finanzas de la pequeña empresa campesina y trabajamos aquí hombres y mujeres.
Peter Giuliano: Teresa Orosco is part of the finance committee also says the organization consists of both men and women.
Manuel Tzorin: Mi nombre es Manuel Tzorin, de la comunidad.
Peter Giuliano: Manuel Tzorin is a member of this community.
Horacio Matzir: Buenas tardes. Mi nombre es Oración Mártir. Soy secretario de la ECA Montellano. Para mi es un gusto poder dirigir unas palabras a ustedes que nos pueden ver desde donde estén.
Peter Giuliano: Horacio Matzir is secretary of ECA Montellano and is happy he’s an opportunity to talk with you.
Teresa Orosco: Estamos en lucha para poder encontrar un mercado mejor.
Peter Giuliano: Teresa says they are in a fight to find a better market.
Francisco Kelel: Pues nosotros hemos luchaba para mejorar nuestro cafetal… también queremos ser más el café especial para que haya un buen precio.
Peter Giuliano: Francisco says they need to fight to improve their coffee, and are seeking to create more specialty coffee so they earn more income.
Teresa Orosco: Y lo que se está haciendo ahorita es tratar de cambiar la forma de cómo se recolecta el café mejorado para hacer un café especial.
Peter Giuliano: Teresa says they’re changing how they harvest to enhance their specialty coffees.
Horacio Matzir: … entonces a raíz de eso nosotros hoy en día estamos trabajando de otras formar para encontrar la manera de sostenernos, ser autosostenibles con nuestros gastos, con todo lo que lleva el proceso del café.
Peter Giuliano: Horacio says the organization is trying other ways to be self-sustaining to pay for their expenses.
Manuel Tzorin: Nos gustaría conseguir un mercado. Nos gustaría conseguir como exportar. Claro, claro estamos muy interesados, nuestra gente esta muy preocupada por el precio que está muy bajo. Y entonces estamos muy interesados en conseguir un mercado que sea mejor.
Peter Giuliano: Manuel says they are quite interested in finding an export market for their coffees. Everybody is very worried right now because prices are very low.
Taya Brown: So, I hope it’s apparent from this video just in the introduction that these people are motivated, these are prompted farmers. I think it’s also clear that they need a lot of instruction and support. So, as they were working with this little lot this last year, and they picked well, then they realized that they had to figure out how to pay their pickers better or incentivized picking mature beans over just picking by quantity. Consequently, they’d only paid a certain way in the past and they realized they had to fix that if they were going to get a different product. They then understood that there was this information that they needed to keep track of using the coffee, variety, elevation, the farmer, day it was chosen things like this. They hadn’t had this experience before, needing to keep track of information about small lots of java. Once that coffee was in the mill, they had to find out how to keep it separate in the mill and keep the data together with each lot. There was a lot of stuff that they’re realizing they’re going to need to learn how to doand they’re going to have to get better at if they would like to continue in this and grow their quantity. So, those are some of the things which I know about, that they’ve had to change and understand, and I wish to keep in this vein of having their voice here and having them explain their particular situation and so here’s another clip of them.
Francisco Kelel: Muchas veces nos vemos obligados a abandonar nuestro café. El precio, cuando vendemos no hay un buen precio, pero estamos luchando.
Peter Giuliano: Francisco claims that lots of times they need to abandon their farms. If they do sell their coffee, it is for a bad price. But still, they’re fighting.
Teresa Orosco: Queremos pues es ver en qué cosas más podemos mejorar. Principalmente las personas que tal vez nos vean atravez de este vídeo que ellos nos puedan decir más o menos qué clase de café en la que ellos les gusta comprar la que ellos necesiten entonces y cuáles son las características o qué trabajo tenemos que hacer nosotros para poder mejorar y lograr ese mercado.
Peter Giuliano: Teresa says they would like to learn what they have to do to improve. If there are buyers who view this video, she wants them to tell her what kind of coffee they are looking for and what work they should do to get there.
Francisco Kelel: Si, nosotros lo que necesitamos, o lo que nos cuesta, es el mercado, pero nosotros estamos dispuestos a cambiar muchas cosas, las cuestiónes del campo para hacer el café, para que salga un buen producto. Y en cuestión del beneficio, tal como el café especial, a nosotros nos gustaría hacer más volumen, tal como este año, pues es poco, pero es para empezar. Ahora nosotros lo que queremos es cambiar un poco el beneficio, lo que todo lo que necesiten, o cortar el café en la mata que sea bien maduro, y para tener un buen producto.
Peter Giuliano: Francisco says what they need is a marketplace for their coffees. They produced just a small amount of specialty coffee this year, but it is a start. They have questions around how to grow the right type of java and how to process it.
Manuel Tzorin: Estamos más contento todavía y la gente están más contento y están más con gan de sembrar más, trabajar más con el cafe, mas para tener un buen futuro.
Peter Giuliano: Manuel says the community is happy to keep working together with coffee and looks forward to a better future.
Taya Brown: So, that was Teresa, Francisco, Horacio and Manuel describing to you their hopes for the future, describing to you a little bit about their motivation, what motivates them and explaining to you some of the support and education that they know they’re going to need to continue to succeed in coffee production. So, I want to ask two things of this audience. We’re planning to make pledges tomorrow but I’m going to go ahead and talk about it now, and I would like you guys to do two things. One is to consider this issue of profitability in these terms. Consider information and not only price and consider what we in this area, some of the most experienced and successful individuals in the specialty coffee sector have that we can share with producers. These farmers don’t understand anything about specialty, but they need to know. They wish to know what it means. They want to learn how to assess it. They want to know how they could produce it. They wish to know what types they need to plant. They want to understand how they need to manage their subjects and their post-harvest control of their coffee. That’s information that we have that we can share together. So, that’s number one to take into consideration the information issue, and number two is to make a pledge to share information over this next year with someone who hasn’t had it. You’ll notice people that have this actual motivation and you’ll find them looking at this situation and see what you can do and what you can add in the shape of support or instruction to help that individual do something more with themselves. I have personal experience with this. I know that it works. Thank you.
Peter Giuliano: That was Taya Brown at Re:co Symposium this past April.
Don’t forget to check out our show notes to locate a link to the YouTube video of this talk, a complete episode transcript, and a link to speaker bios on the Re:co website.
Re:co Symposium and the Specialty Coffee Expo are coming to Portland in April 2020. Don’t miss the forthcoming early-bird ticket launch – find us on social media or subscribe to our monthly newsletter to keep up-to-date with our announcements.
This was an episode of the Re:co Podcast, brought to you by the members of the Specialty Coffee Association, and supported by Toddy.