Economics

The economics of getting coffee from farm to cup can be quite complicated and convoluted. And too often it is oversimplified in order to make a point that, while may be valid, is better served when the discussion is better informed.

As a coffee professional who works in a producing country, with first-hand knowledge of what it takes to be a smallholder coffee farmer, I support the idea of farmers getting more for their produce. Therefore, I’ve tried to dive deeper into those complexities in several of the articles I’ve written. Some of the major themes I try to emphasize:

  1. 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.
  2. The produce that a farmer provides (coffee cherries) is a raw product used to make another raw product (green, un-roasted coffee) used to make a consumable product (roasted coffee).
  3. 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. The coffee must be processed first, a separate and unique skill.
  4. 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: