SUSTAINABLE COFFEE

Shashi Prakash G11107

An Overview: During the first decade of the century there had been a considerable shift in the way coffee is grown and marketed for its sustainability. The different types of coffee, certified as organic, fair trade, Rainforest Alliance etc, fall under this umbrella. A number of classifications are available for coffee. These are used in determining the participation of growers in the different combinations of social, environmental, and economic standards. Coffees which fall into such categories and are independently certified or verified by an accredited third party are collectively termed as "sustainable coffees". This segment has seen a quick growth to a multi-billion dollar industry of its own. This also puts forward significant implications for many other commodities as there is expansion in the demand along with the awareness. The term sustainable coffee was introduced in the expert meetings convened by the Smithsonian Institution Migratory Bird Center (SMBC), NAFTAs Commission for Environmental Cooperation (CEC) and the Consumer Choice Council (CCC) in the year 1998. In the public domain, the term was introduced through the CCCs 1999 report, Sustainable Coffee at the Crossroads(Rice, Paul and Jennifer McLean. 1999). The report describes the interpretations of sustainability and explores various options such as organic and fair trade as sustainable coffee. But the report does not provide any particular functional definition. Almost at the same time when the CCC report was published, World Bank publications (Morriset, Jacques. 1998. Unfair trade, World Bank Economic Review, vol 12 (1998), pp. 503-526 ) and an IMF paper (Cashin, P., Liang, H. & McDermott, C.J. 1999) came up with the identification of economic and social problems prevalent in coffee origins. These problems became the main reasons for the coffee crisis that surfaced in the early 2000. Earliest evidence of environmental impacts, in some of the most important coffee growing

regions of Central America, were provided by the SMBC (Rice, Robert. 1996. Coffee modernization and ecological changes in northern Latin America. Tea and Coffee Trade Journal, September 104-113), (Rice, Robert., Perfecto, I., Greenberg, R. and Van der Voort, M. 1996. Shade coffee: a disappearing refuge for biodiversity, Bioscience, 46 (8) 598-608) The discussion over the economic and ecological concerns in the meetings hosted by the CEC, Workshop of Experts on Sustainably-produced Mexican Coffee in Oaxaca in 2000 led to the origin of the Oaxaca Declaration. Defining the Term: Sustainable coffee is the coffee that is grown in a manner that is favourable to the environment as well as to its people. A sustainable farm returns to the land and its people as much as it receives from it. The process of sustainable farming takes measures to minimize pollution, protect environmental damages and even cares for its employees. Few steps that a sustainable farm would take: (http://www.coffeeresearch.org/politics/sustainability.htm)
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Try to utilize renewable resources instead of non-renewable resources wherever possible

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Reuse coffee husks as heating fuel rather than cutting down eucalyptus trees Plant new trees to replace the ones used during heating Implement pollution free coffee dryers such as solar coffee dryer developed by Coffee Kids

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Implement practises so as to minimize water consumption also to clean the water used Replace the natural nutrients of the land by spreading fertilizers and organic matter, comprising coffee pulp, in the plantation area. This increases the yield over time and produces a more uniform mineral content in the ground

Promote education programs, provide medical care, decent wages and working conditions for workers Agribahia in Bahia, Brazil, an excellent sustainable farm, ferments pulped coffee without water for a short span before sending it to demucilating machines. This helps to reduce water wastage while allowing them to consistently provide some of Brazil's best coffees.

Indicators of Sustained coffee For consumers: (http://www.coffeehabitat.com/2007/05/top_5/) In order to meet the growing demand there has been a call for increase in production and this has caused a shift from the traditional, sustainable coffee growing methods to intense monocultures that require large inputs of fertilizer and pesticides. This brings about a loss in biodiversity and quickly depletes the land. Here coffee drinkers have a major social responsibility. If the consumers choose to purchase only sustainable coffee, the market for intense monocultures would eventually die out. Following indicators can help the consumer to identify a sustainable coffee:
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Certification Due to the costs of certification, not all sustainable coffees carry a seal, but if they do its certain that they have been grown through sustainable methods. Various types of seals are: a) Smithsonian Migratory Bird Center This seal is one of the best assurances that the coffee has been grown with biodiversity and sustainability as the top priorities b) Organic certification, by the USDA and its accredited agencies - an important indication that many chemical inputs have been either eliminated or reduced c) 100% Rainforest Alliance d) Utz Certified (formerly Utz Kapeh)

Country of origin a) Countries more likely to grow shade coffee: - Mexico - El Salvador - Nicaragua - Honduras - Bolivia - Papua New Guinea - Ethiopia b) Countries likely to grow sun coffee- should be avoided unless Smithsonian BirdFriendly certified: - Costa Rica - Brazil

- Colombia - Vietnam
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Botanical variety- Two species of coffee are used commercially. These are Coffea Arabica or arabica coffee and Coffea canephora or robusta coffee. Arabica is a high quality and preferred coffee while robusta is generally low quality, mass produced in deforested sun coffee monocultures with lots of chemicals and is used in most supermarket coffees. Since robusta isnt generally printed on the label so one should look for 100% Arabica.

Roaster- A conscientious roaster will have specific information on the precise origin of the coffee it sells so through it, one can determine how the coffee was grown in order to guide the purchase.

Price- A low priced coffee is highly unlikely to be sustainable. Farmers growing grocery store coffee get less than $0.25 a pound for it, which clearly is not a living wage. Thus, these farmers are more likely to go in for exploiting the environment, converting their coffee to other less ecologically-friendly crops, or abandoning their land altogether.

Scenario in 2002-> The Global Coffee Crisis: (Nstor Osorio, 2002. The Global Coffee Crisis: A Threat To Sustainable Development) This report talks about the scenario in 2002. The bottom prices of coffee posed problems for the countries, wherein coffee was a key economy factor. From early 1990s to August 2002, the value of retail sales of coffee grew from US$30 billion to over US$70 billion. But, the earnings by the coffee producing countries fell from US$10-12 billion to US$5.5 billion. Prices fell from around 120 US cents/lb in 1980s to around 50 cents in 2002.The drop in earnings had been significant for the countries for which coffee makes up a large portion of export revenue. The main reason for the above imbalances lies in the demand-supply gap. There had been an average annual growth of 3.6% in the coffee production while the demand grew at a rate of only 1.5%. In certain countries, the costs of production were low due to well developed technologies and the exchange rate movements were in favour of exports. The farmers in such countries are

comparatively better off. Brazil forms one such example. Lower returns had adversely affected the rural economies on account of reduced farmer spending and rising unemployment. In case of many African and even some of the Asian countries, coffee represents a cash crop element in a subsistence farm. Hence a very smaller share of money is available for expenditure on medicine, communications and education. At places where there has been a huge dependence of farmers on coffee as a source of income, they are either deeply stuck under debts or forced to abandon their farms and switch to some other alternative crop. - The crisis as a threat to sustainable development: The International Coffee Organization (ICO) is the body responsible for implementing the International Coffee Agreement. One of the objectives is to encourage its members towards developing a sustainable coffee economy. The ICO recognizes that sustainable development covers economic, social and environmental dimensions. It is pretty obvious that the exodus from rural areas and increased poverty in the coffee producing areas caused due to the price crisis described above poses a huge threat to sustainable development. A series of Millennium Development Goals were adopted by the member states at the United Nations Millennium Summit held in September 2000. It aimed at reducing the proportion of people living on less than US$1 a day to half the 1990 level by the year 2015. But as per the Global Development Finance 2002, the World Bank's yearly report on developing countries' external finance, the growth rates in many poor countries were expected to remain too low for rapid poverty reduction."Many poor countries have improved their policies, institutions and performance in the past decade. Because aid increasingly is channelled to these countries, aid is more effective today than ever before," says World Bank Chief Economist Nicholas Stem. "But even successful poor countries are being hurt by lower global growth, adverse trends in commodity prices, and declining aid." The report stated that the global economic slowdown was exceptionally deep and the countries that were dependent on commodity exports such as coffee were the ones grossly affected.

Current Scenario -> (Jason Potts and Mark Sanctuary, 2010, Sustainable Markets are Growing Is Sustainability Keeping Pace? A Perspective on Sustainable Coffee Markets): Taking the past four years data, the average annual growth rate of the major sustainability initiatives operating in the coffee sector has significantly outperformed the annual growth of conventional coffees in both the speciality as well as mainstream sectors. The former growth rate has been between 19% and 70%. During 2009, an estimated 1.2 million MT (16% of global production) of coffee was actually produced in accordance with the criteria associated with one or more major sustainability initiatives (Giovanucci, D and Pierrot, J, 2010, Is Coffee the Most Popular Organic Crop? in Global Survey on Organic Agriculture). Though the share of sustainable coffees is still low in terms of the global production and trade, but its rapid entry into mainstream supply chains suggests that sustainable coffees is likely to become an increasingly important determinant of access to the international markets and also of living/working conditions in the coffee-producing regions. The price premiums for sustainable coffee can be substantial representing an important opportunity for triggering the social, economic and environmental benefits across the developing world. An important trade concern for many of the producer countries is the access to sustainable coffee markets. According to the current market trends, it appears that supply to sustainable coffee markets is mostly concentrated across the more organized producer regions. It calls in for a dedicated effort in order to ensure that the benefits from sustainable markets are delivered to those most in need. There are a few counterfactual studies on the impacts of voluntary sustainability initiatives in the coffee sector. But, these studies fail to provide any valuable and representative coverage and lead to uncertain conclusions. In order to ensure maximum usefulness, special effort needs to be put in. This will ensure that impact research is coordinated and comparable. I would like to conclude by saying that the policymakers and other stakeholders who are interested to invest in voluntary sustainability initiatives, should ensure that these initiatives are applied in a manner that improves the livelihood and sustainability of those who need it the most.