Coffee is the world’s second favorite drink, the first being water. In the United States, Americans drink more than 580 million cups of coffee per day. More than three million cups are consumed worldwide. To support the world’s coffee addiction, many developing countries rely on the coffee-growing industry. Most of these coffee growers are small farmers, and the majority live in impoverished conditions. With the popularity of the coffee market, better coffee farms reduce world poverty.
Small farmers produce about 80 percent of the global coffee supply. These farmers, known as smallholders, are defined as, “owning small-based plots of land on which they grow subsistence crops and one or two cash crops relying almost exclusively on family labor.” An estimated 25 million smallholder farmers produce the world’s coffee supply. Unfortunately, they earn less than ten percent per pound of the sale value of their coffee. Combined with the added costs of production, fertilizer, pesticides, workers, etc., this creates an unprofitable business.
Without profit, many coffee farmers have left the industry because they are unable to sustain themselves. Additionally, the past few years have brought drought and an increase in crop diseases such as “coffee rust.” Coffee prices have dropped to a 12 year low this year.
Not only are coffee farmers unable to support themselves and their families, but a number of other challenges have pushed them out of the coffee growing business. Coffee grows best at a high altitude, usually in remote and mountainous areas. This limits access to markets and adds to the cost of transportation and labor. A lack of environmentally sustainable practices along with weak management and poor training have led to the inefficiency of coffee production.
Despite the current situation of coffee production, demand for the drink is increasing. If the current trend continues, there is a predicted shortage by 2050. In order to help small farmers and the coffee business, many companies are turning to fair-trade. However, fair-trade can create problems around business costs and artificially raised sale prices. Fair-trade targets production but does not always reduce poverty.
Other initiatives that focus on coffee farmer operations and management have shown more success. The National Union of Coffee Agribusinesses and Farm Enterprises works to facilitate services for Ugandan coffee farmers while maintaining their ownership of their crops. In Colombia, coffee farms reduce world poverty, as farmers are investing in digital tools to better manage their farms and transactions.
Small coffee farmers have been exploited for their work for too long. Coffee is a popular product, and with better management tools and ownership over their product, small farmers can influence the market to benefit themselves. No longer will the industry be unprofitable with increased management and training. When farmers are able to gain the tools they need for a profitable business, coffee farms reduce world poverty.
– Margarita Orozco