Professor Kate Raworth is clear about the global challenges we face. In her hugely influential 2017 Doughnut Economics she says, “Humanity’s 21st-century challenge is to meet the needs of all people within the means of the planet so that we and the rest of nature can thrive.”
She visualizes the concept by drawing out a doughnut consisting of two circles:
Between the two outer circles lies the safe and just place for humanity. But how can we, within the coffee sector, fit into Professor Raworth’s Doughnut Economics? Sander Reuderink explores the coffee-doughnut sweet spot.
Around 80% of the world’s coffee is produced by an estimated 25 million small-scale producers. In the case of Ethiopia, these producers grow coffee without the use of chemicals under the shade of the natural forest canopy.
This type of agroforestry leads to slower plant metabolism and results in better cup quality. The forest also has a positive impact on biodiversity and – due to the miracle of carbon sequestration – helps absorb CO2 from the atmosphere.
You might think Ethiopian small-scale producers have it all sorted out.
Since these farming families live off only a few dollars per day on average, the impact of the price they receive for their coffee is enormous. And, unfortunately, the price for their coffee has been too low for many years.
It’s too low to cover household expenses, and too low to even cover the cost of production in most regions. To put it in professor Raworth’s words: small-scale farmers fall below the social foundation.
Only the largest commercial estates in Brazil, that have the benefits of scale, flat terrain, and mechanization, still make a profit. Sadly, these are also the farms that have the highest ecological impact, especially due to the carbon footprint of chemical fertilizers.
Coffee production is simultaneously falling short of our societal social foundation and overshooting the planet’s ecological ceiling.
The dominant long-standing view within the specialty coffee sector is that if you invest in high-quality coffee production, you invest in better livelihoods. But is this really true? And can we prove it?
The best way to measure coffee’s social sustainability is to track the producer’s ability to earn a living income. A living income is the net annual income required for a household in a particular place to afford a decent standard of living.
But here comes the problem. Information about small-scale farmer’s incomes and expenses is largely non-existent in our industry due to complex, opaque supply-chains, and limited infrastructure.
To start tracking producers’ ability to earn a living income, we partnered with our friends at Fairfood last year and became the first user of their platform Trace. In Trace, we made the smallholders behind the Suke Quto washing station visible and published the farm-gate price they received for their freshly harvested coffee cherries: 27 Ethiopian Birr per kilogram.
But was that price high enough? I’ll be honest, we do not know yet. We know that the price they received was higher than what we hear from other regions in Ethiopia. But at the moment, we do not know if the producers can earn a living Income from their coffee sales.
For the upcoming 2020-2021 season, we are taking our research a step further. Within two supply-chains we plan to collaborate with independent NGOs to calculate the regional living incomes and the cost of production of our farmers.
Together with our customers, we strive to work on improving the producer’s lives through higher farm-gate prices, increased productivity, and diversification of income. We are doing everything to get these small-scale producers in the safe and just space for humanity.
And let me put it this way, the entire coffee sector needs to align with Rathworth’s take on economics. We need to meet the needs of all people in the coffee supply chain, and especially small-scale farmers, within the means of the planet.
The entire coffee supply chain needs reform, from growers to baristas and consumers. And we can’t change systems without the help of coffee roasters who believe in a new economy. That is why we invite you to join us in improving the lives of producers through our research.
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