The SCAA Event 2015: The View from the Coffeelands

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By Michael Sheridan

I have been living at origin and working with coffee growers since 2007. I started blogging about my work in the coffeelands on behalf of Catholic Relief Services in 2009. The next year, I began publishing an annual review of “origin content” of The SCAA Event, under the title: “The view from the coffeelands.” This year, I am delighted to contribute some perspectives on the 2015 lectures to The Event Issue of The Specialty Coffee Chronicle.

THERE ARE NO “ORIGIN ISSUES”

Before I get to what I consider to be lectures on origin issues at The SCAA Event, I want to acknowledge that this very idea is largely artificial. There are no “origin issues” or “marketplace issues,” only “coffee issues.” If I have learned anything over the past 10 years from my work in coffee it is this: what happens in the marketplace matters at origin and what happens at origin matters in the marketplace. The essence of a supply chain is interdependence. Whether we like it or not, we are all in this together.

With that caveat, here are the lectures in the 2015 SCAA Lectures Series that I think have the best origin-focused content.

THE ECONOMICS OF SMALLHOLDER FARMING

In 2014, I heard reports that the lecture on the (tenuous) economics of smallholder coffee farming drew a standing-room-only crowd and some grumbles from attendees who couldn’t get into the room. The SCAA got the message, and this year has approved another lecture looking at smallholder profit margins, as well as a number of related lectures on opportunities and threats in the coffeelands and the marketplace that may affect the calculations around smallholder profitability.

wattsCost to Produce v. Price—Producers’ Narrow Margins is a roundtable discussion that will focus on an underappreciated factor in the profitability equation — what it costs a grower to produce coffee. While the glare of the media spotlight shines squarely on the sensational prices coffees fetch at auction, or on the FOB prices roasters are publishing as part of the growing trend toward price transparency, costs of production tend to remain in the shadows. They are just as important to a grower’s profitability as price, but significantly less understood.

The panel will draw on a deep reserve of field data collected by roasters and researchers to highlight the importance of production costs for anyone interested in smallholder profitability. The conversation will feature contributions from three unimpeachable sources: Ben Carlson, who leads the Long Miles Coffee project in Burundi, CIAT Senior Researcher Mark Lundy, who is collaborating with the Borderlands Coffee Project that I direct in Colombia, and COSA, the Committee on Sustainability Assessment, which has collected data from 17,000 farms in 12 countries in one of the largest data sets in the coffee sector. COSA will be represented by Saurin Nanavati. The conversation will be ably hosted by Ruth Ann Church of Artisan Coffee Imports, who combines experience importing single-origin decaffeinated coffees with a research background. This lecture anchors the discussion of smallholder profitability at The SCAA Event with its data-driven focus on production costs, but the issue of coffee prices is hardly ignored.

Opportunities in the marketplace

Two lectures in the series hold unique promise to inform decision-making on the farm through critical assessment of widespread beliefs about cup quality and its relationship to prices.

In Economics of Quality and Price: Insights from CoE Auction Data, Adam and Norbert Wilson will discuss the article they co-authored on the same topic for the journal Agricultural Economics. Adam works in sales for Thrive Coffee. Norbert (no relation) is a professor of agricultural economics at Auburn University. Their paper is an important contribution to the scant literature on coffee quality as a price determinant, while also serving a welcome decision-support function for growers seeking to better understand the likely returns on investments in quality improvement. The findings suggest a strong positive relationship between increases in cup quality and price premiums and begin to quantify the return on one-point increases in cupping scores at different points on the scale. Ruth Ann Church is implicated on this side of the profitability equation as well: she interviews Adam and Norbert and facilitates a Q&A with the audience.

Photo: Texas A&M
Photo: Texas A&M

Meanwhile, I will be facilitating another conversation related to cup quality, price and smallholder livelihoods in the panel titled: What Difference Does Variety Make? Perspectives from the Colombia Sensory Trial. The Colombia Sensory Trial is a partnership between CRS and World Coffee Research that has enlisted cuppers from some of the most recognized brands in specialty to evaluate the quality of two leading Colombian coffee varieties, Castillo and Caturra. The Trial is designed to support decision-making on the farm, where growers are making choices about which varieties to plant in a context of considerable uncertainty regarding the two varieties’ relative cup quality and potential for price premiums. The study is scheduled for completion in early 2015, and its results will be the topic of conversation among four participants in the process: Intelligentsia VP for Coffee Geoff Watts, Federación Nacional de Cafeteros Communciations Director Luis Fernando Samper and World Coffee Research Executive Director Timothy Schilling. CIAT’s Mark Lundy makes another appearance.

Threats in the marketplace (and on the farm)

The SCAA Event lecture series also includes some important discussion of threats facing growers, both in the marketplace and on the farm.

In a marketplace characterized by increasing speculation and price volatility, supply chain actors who are not actively managing their risk are asking for it. Heavy investments in improved financial literacy and risk management strategies in recent years have fostered a steady upstream migration of risk management instruments historically used primarily by traders, but many actors are still exposed. How To Mitigate Coffee Price Volatility: A Case Study will provide guidance by looking at concrete examples of successful risk mitigation strategies. Julio Sera of INTL FC Stone holds sway.

On the farm, where climate change continues to pose an acute threat to coffee supply and smallholder livelihoods, a growing number of supply chain actors are collaborating on climate-smart innovations that help growers adapt while mitigating the impacts of the coffee trade on climate change. The Coffee And Climate Change panel will examine the relationship between climate change and coffee productivity, cup quality and sourcing operations in the context of ongoing projects in the field. The great Rick Peyser, now with Lutheran World Relief after nearly 30 years of flying the flag for sustainability at Keurig Green Mountain, moderates the discussion between representatives of industry (Nespresso), growers (Nicaragua’s UCPCO), certifiers (Rainforest Alliance) and non-profits (LWR).

OTHER IDEAS FROM ORIGIN WHOSE TIME HAS COME

The lectures described in detail above are not the only ones at The SCAA Event with exciting origin content. The lineup also includes panels on other ideas from origin whose time has come, including:

Farmworkers. This panel reunites some of the participants in the groundbreaking discussion of farmworker issues at last year’s Event to continue the dialogue on one of the most important emerging issues in the sustainability conversation.

Payments for ecosystem services. Coffee—especially shade-grown and organic coffee—generates a wide range of benefits for ecosystems in the coffeelands. Payments for ecosystem services tie financial incentives to these practices, benefitting people who benefit the planet.

Gender and women’s empowerment. Coffee Quality Institute launched its Partnership for Gender Equity this year and leads this conversation with women growers and academics exploring both the returns on women’s empowerment and the gendered nature of leading issues in coffee sustainability.

The Young and the Restless. This panel discusses the challenges and opportunities of keeping young people in the coffeelands at a time when increased market volatility and production risk make coffee farming a tough sell and the beacon call of the cities is stronger than ever.

Fine Robusta. David Griswold of Sustainable Harvest helped CRS stage Let’s Talk Robusta events in 2012 and 2013 and became a convert himself, buying his first Robusta in 2014. He leads a discussion of the future of the “fine Robusta” category that features the world’s only R-Certified grower.

Sheridan_PicMichael has worked on coffee for Catholic Relief Services since 2004. Since 2007, he has worked with smallholder farmers in the coffeelands throughout the Americas. Michael is currently based in Quito, where he directs the Borderlands Coffee Project in Colombia and Ecuador and advises other CRS coffee projects in Latin America and the Caribbean. From 2004-2007 led the CRS Fair Trade Coffee Project. He publishes perspectives from the intersection of coffee and international development for the CRS Coffeelands Blog at coffeelands.crs.org.