Coffee Should Be More Expensive, Or Not

To say that coffee should be more expensive is 1) to oversimplify both the problem and the solution and 2) implies a solution that is not free-market friendly.

In my experience, coffee farmers are relatively good at finding buyers for their coffee and the buyers they find are largely looking for the type or quality of coffee the farmers are selling. Simply making coffee more expensive for the sake of “saving small and/or poor coffee farmers” has proven to be unsuccessful at lifting farmers out of poverty vis-à-vis fair trade.

See also: Coffee Sustainability

An alternative route is to introduce robustness (a prerequisite of both stability and sustainability) into the coffee industry via product differentiation and versatility at the farm level, buyer diversity at the smallest unit possible, i.e. the farm level and better business practices (read: a modernization of the farm as a business). It’s also beneficial to encourage roaster-to-farmer connections, a.k.a. direct-trade as much as possible because in that relationship, the price of the greens will be determined in large part by the quality of the roasted coffee and the value the roaster sees in the coffee, rather than the speculative, noisy C market price.

Product differentiation and versatility

Specialty coffee is manufactured, not grown. As long as a farmer has good tree stock that is 1) relatively disease resistant, 2) relatively diverse, and 3) of relatively good quality, then it can either be highly processed to obtain higher quality or it can be minimally processed to sell as a lower quality coffee.

See also: When Coffee Is Too Expensive

Having a section of a farm that is all one specific, yet distinct breed of tree can be beneficial if that breed produces a desirable flavor/quality of coffee. It then become versatile in that it can be processed as a micro lot sold to a cafe at a premium or it can be lumped in with lower quality coffee and sold at a lower, but still profitable price.

Better business practices

Record keeping is vital for a successful business.  Keeping track of all expenses that go into the cost of coffee production provides valuable information for basing one’s selling prices. For example, knowing that it cost $2/year to grow coffee X means we can’t stay in business for long by selling it for less than $2 each harvest.

See also: Coffee Prices: The Big Fix, Coffee farming as a business

Working with roasters: having someone in the farming business who understands the target consumer market and is attuned to the current trends can help steer the actions of the farmer. For example, if a farm is seeing greater sales to cafes targetting western consumers, then the farmer can consider increasing the planted stock of trees that produce coffee desirable to that customer (being careful not to alter too much the overall crop diversity as noted above).

Coffee farms are often old enough to be in the family for generations and there are often meaningful and useful family and/or local traditions involved in coffee production. Those traditions should be maintained as long as they don’t negatively impact the business of the farm*. There are improvements to business practices, which can be made that don’t impact the traditions involved in coffee production.

Buyer diversity

One of the things I hear often from farmers is ‘if I only had a buyer who would buy my entire crop every year…’  On the surface that seems like a great thing, until that buyer goes away and the farmer is left scrambling to find another buyer.  That’s why I advise farmers to pursue as many different buyers as possible. This way the loss of any single buyer doesn’t have a disastrous effect on the farmer’s overall business.

Coffee is a very complex product with a lot of volatility in price. To say that “coffee should be more expensive” is a counterproductive oversimplification of the problem, not to mention the fact that arbitrarily raising the price of a given coffee, a la fair trade, has failed to demonstrably improve the livelihoods of farmers.  A more comprehensive solution that is grounded in quality is needed. Does the above proposition increase the price of coffee?  Often yes, but it does so within the confines of a free market in which the buyer and the seller determine the price based on quality, not an abstract, volatile, speculative market price.

Michael C. Wright

Michael is a licensed Q Grader, licensed Q Processor Pro, an Authorized SCA Trainer (AST), and most recently, a graduate with a degree in horticulture and a concentration in horticultural business management. He has over ten years experience in the coffee industry operating on both the supply and demand sides of the value chain.