Economics

The economics of getting coffee from farm to cup can be quite complicated and convoluted. Many simplify this complex process, perhaps to drive home a point. However, a well-informed and nuanced discussion usually serves that point better.

As a coffee professional who has operated in a producing country, I have firsthand experience with the challenges smallholder coffee farmers face. I advocate for farmers receiving better compensation for their produce. To this end, I have explored these complexities in depth in my writings. In these articles, I focus on several key themes:

A cup of coffee is made possible by a wide network of players and all of these players add value to that cup of coffee by providing a service. That service comes at a cost, which gets passed along the chain and is ultimately paid for by the end consumer.
The produce that a farmer provides (coffee cherries) is a raw material used to make a raw product (green, un-roasted coffee) used to make a consumable product (roasted coffee).
In the entire coffee industry, there is a small subset of customers for un-roasted coffee and an even smaller subset of customers (processing mills) for coffee cherries. Put another way; a coffee farmer can’t just take his produce to a farmer’s market and sell it to retail customers like corn or tomatoes for example.. The coffee must be processed first, a separate and unique skill.
Comparing the profits a cafe gets for selling a consumable product to the profits made by a farmer selling a raw product is comparing apples to oranges. It’s a false equivalence.

Having said that, there is work to be done to improve the lives of many smallholders who produce coffee and part of that is to improve the price they get for their produce. Many of these articles wrestle with that problem.

The following posts are in the category Economics: