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Coffee sustainability check: Q&A with Sjoerd Panhuysen of Coffee Barometer report

Coffee drying outside the house of Abdul Kadeem in Manyate Village on the outskirts of Harenna Forest. Photo by Nathan Siegel for Mongabay.

Coffee drying outside the house of Abdul Kadeem in Manyate Village on the outskirts of Harenna Forest in Ethiopia. Photo by Nathan Siegel for Mongabay.

  • Coffee enjoys a reputation as a sustainable crop, but for many of the people who cultivate it, it’s a “poverty crop” that’s economically unviable, says Sjoerd Panhuysen, lead author of the annual Coffee Barometer report for Ethos Agriculture.
  • Panhuysen says that while the coffee industry as a whole is booming, most of the profits are concentrated at the retail end of the chain, with exporters making less than a tenth of the revenue.
  • Another inequity is that while women perform much of the production activities, men tend to benefit more from training in sustainable production practices, income and other benefits derived from coffee sales, he says.
  • In this Q&A with Mongabay, Panhuysen identifies the growth regions for sustainable coffee, the need for clear indicators of sustainability progress, and the importance of developing solutions from the bottom up.

At the start of 2021, Mongabay connected with Sjoerd Panhuysen, lead author of the biennial Coffee Barometer report for Ethos Agriculture, to discuss the present and future of sustainable coffee. The following interview has been lightly edited for style and clarity.

Mongabay: As the world gains incremental distance from the pandemic and its myriad ripple effects in 2021, is there good news or bad news for environmentally conscious coffee drinkers?

Sjoerd Panhuysen: There is a wealth of choice in environmentally friendly produced coffee. However, as the size of the coffee economy increases relative to its agricultural resource base, it becomes even more urgent to manage the ecosystems, biodiversity and forests in coffee producing countries.

What’s currently the greatest challenge when thinking in terms of sustainability for coffee at all levels — from growth to production to consumption? 

The main challenge is to redistribute the value in the coffee sector more evenly. For example, currently coffee-exporting countries only capture 10% of the coffee category value. The dire situation of many coffee farmers operating well below the poverty line due to a long period of low coffee prices and rising production costs is in stark contrast with the booming revenues of major roasters and retailers in the coffee-consuming countries.

Coffee flowers blooming in April. Image by Monica Pelliccia for Mongabay.

Is the industry a whole sustainable, or there are pockets of sustainable practices? 

Sustainability is not an end goal, it’s a continuous improvement process. There are coffee regions that are doing significantly better than others, however, the industry itself has to realize that any of the environmental stresses and social struggles identified by the U.N. SDGs can negatively drive the industry’s risks and returns.

Nevertheless, we notice a lack of urgency to address the sustainability challenges collectively, for example by reporting on progress and public commitments, or in financial terms by making substantial investments to reach long-term goals.

What are some core ongoing issues surrounding organic coffee growth, particularly in Ethiopia, Brazil, Vietnam and Central America?

Overall, we notice growth in the production and demand of organic coffee, however, the total volume of organic certified coffee is relatively small compared to the coffee market at large. Also, the combination of fair trade and organic is gaining ground in consumer markets, and is expected to grow further. Particularly in coffee, European consumers are looking for products that are ethically sourced, both from a social and ecological point of view.

The growth of organic certification within specialty coffees is expected to continue, as the concepts of quality, health and safety, and ecological awareness converge. Brazil and Vietnam are not known for this type of coffee production; for Ethiopia and Central American specialty origins there is more market potential.

The coffee Tunki of Puno in Peru is highly valued in the international market. Photo courtesy of WCS Peru.

Where are women leading in today’s coffee industry? 

Coffee is a male-dominated crop; although women perform much of the production activities, men tend to benefit more from training in sustainable production practices, income and other benefits derived from coffee sales. There are multiple coffee cooperatives led by women, however, they are often the exception to the rule.

When it comes to conservation, do you think it is fair to say that coffee has an image problem? 

On the contrary, to the outside world coffee has the image of a sustainable crop, with a long history in sustainable production practices. In the sector itself, producers often feel trapped in a “poverty crop,” this image is a threat to the future of coffee farming as the next generation of farmers will look for other options or employment outside of the coffee sector.

In recent years the living income gap for most small producers is only widening, and technical assistance and price support will not be sufficient to address the root causes. This situation is aggravated by deforestation, the destruction of biodiversity and the impacts of climate change.

Does the coffee industry have equity issues in its supply chain, and how are these being addressed?

Certainly, in general 75% of the global coffee production is exported to international markets like the EU and U.S.A. This generated a total export value of green coffee of around $20 billion (yearly average) in the period 2015-2020. Coffee is exported in the form of green unprocessed beans; roasters and retailers capture the largest share of value addition. We estimate that the total coffee export value is less than 10% of the $200 billion of revenues generated in the coffee retail market.

In recent years, the coffee market price has been economically unviable for the majority of coffee farmers, as a result the proportion of producers living below the poverty line has increased dramatically and even in high-productivity countries profit margins are under stress.

1. Adbul Kadeem inspecting drying coffee outside of his house in Manyate Village on the outskirts of Harenna Forest. Photo by Nathan Siegel for Mongabay.
Adbul Kadeem inspecting drying coffee outside of his house in Manyate Village on the outskirts of Harenna Forest in Ethiopia. Photo by Nathan Siegel for Mongabay.

While the growth in available volumes of certified coffees equals the growth of production in the sector, the market uptake of independently certified coffee is stagnating; in 2019 less than 25% of coffee has been procured as standard-compliant coffee by the industry. Billions are invested in the consumers’ end of the value chain, but profits are not reinvested at the farmers’ level.

Most farmers
are not even able to cover the full cost of production, let alone account for external social and environmental costs. Unfortunately, companies’ sustainability policies are often isolated strategies, mainly highlighting issues they may feel compelled to work on in the form of projects at farm level. Instead, they need to recognize their shared responsibility and define ambitious targets and actions to address the root causes.

At least, the sector needs consensus on a valid system to measure sustainability progress and report this transparently. The sector needs consensus on a valid system to measure sustainability progress and report this consistently.

Have farmers managed to successfully establish positions of real influence?

Farmers are a heterogeneous group of stakeholders, and there can be much diversity in perspective. Equally important is to avoid preconceived interventions and really involve coffee farmers and local coffee communities to challenge the thinking of international and national multi-stakeholder initiatives.

This implies acknowledging local people’s interests and agenda setting, rather than developing top-down solutions. To challenge the powerful stakeholders and the status quo, we should actively support stakeholders with limited resources — like local producer organizations, trade unions, local NGOs and research institutes — to participate in defining, challenging and steering the sustainability agenda in the coffee sector.

Banner image: Coffee drying outside the house of Abdul Kadeem in Manyate Village on the outskirts of Harenna Forest in Ethiopia. Photo by Nathan Siegel for Mongabay.

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