unionroasted blog

Series about Direct Trade

My previous blog post introduced Pascale; she is studying the working and living conditions of some of the small holder coffee farmers that Union Hand-Roasted Coffee source from in Central America.  Here is Pascale’s next update of her work in Huehuetenanago.  This is a new relationship for Union;  now in our second year of sourcing from these producers, we want to identify the complexities the farmers face to enable us to determine what actions we can take to support them in the future.  (SM)

¡Hola!

 Everybody in the cooperative (and La Libertad) has been extremely helpful and friendly to me. I feel very welcome here. However, it is a distinct area they have their own rules which are important to respect. Therefore I prefer to stay close to the people of the cooperative since they know what to do and what not to do. However, this has several implications for the research:

It may influence amount of structured formal interviews that I can do; maybe not as many as planned. This is because everybody in the cooperative is extremely busy. The last harvest is coming in, contracts need to be made, the last coffee needs to be collected, people need to be paid. After this period there will be more time they assure me (semana santa, the period of rest, is coming).

 I know I must have a control group, although this is difficult for two reasons: First the speed in which I can work the questionnaire is slow. Therefore, I will first try to interview as many cooperative members as possible. Second, I prefer to stay within the area of cooperative members because it is safer and less risk when in remote rural areas.

Putting aside any negativity about these limitations, the cooperative is doing loads and loads of positive stuff. There is so much to write about. Iliana, the Manager of the Cooperative, is amazing; very smart, enthusiastic and full of energy to change and develop things.

I have started to perform formal interviews. I have spoken to several people and gathered a large amount of knowledge. I have collected coffee in Palmira and spoke briefly with the people there, I had a quick visit to ANACAFE (the Guatemala Coffee Board), I have cupped coffee in La Libertad and Huehuetenango, I have visited the export company where the coffee is prepared to be exported. Talked to some people of the cooperative and now know a lot the history of the cooperative. This has meant leaving the house at 7am and coming back at 9pm exhausted in the evening, so there has been until now little time to write down everything. But I am catching up with this now in the coming weeks.

The farmers are introduced to me “as the girl who is going to calculate what is a fair coffee price”. Although for me this is a very interesting and challenging assignment it is an extremely difficult and complicated job. Information on other areas of interest, such as I will therefore collect in a more qualitative way.  I really believe that it will help the cooperative if I can help calculate a fair coffee price for them. It is not easy to do but will be very worthwhile.

Saludos,

Pascale

 Pascales’ main work is to focus on the social conditions of farmers but the producers want to take full advantage of her background in development economics to create a business model.  I think it helps to be transparent and reveal the complexities that happen in the field. Producing coffee is hard work, not romance. And farmers’ livelihoods depend upon getting a good income.  These cooperatives in Northern Guatemala are in remote areas and life is about survival. Until Union started to work with them they had uncertainty from one season to the next. Through continuing our relationship, our vision is to bring stability and economic prosperity.

Next posts from Pascale will continue to talk about the importance of helping small scale farmers do business.

Steven

In my last blog post about Union Direct Trade I exlplained how we’ve developed a research project to examine the impact of our approach to coffee sourcing on the lives of coffee producers and on the quality of the coffee they grow. I can now let Pascale who is undertaking this research out in the field introduce herself and explain her thoughts when she arrived in Central America.

                ¡Hola!

 I am happy to introduce myself to all Union Hand Roasted Coffee Lovers. My name is Pascale Schuit, 24 years old. Currently I live in Huehuetenango, Guatemala but my home is in the Netherlands. I have finished my Bachelor and Master International Development Studies with the specialization rural economics (at Wageningen University, The Netherlands). After five years of formal education on development economics and sociology and previous field experience in Costa Rica with (coffee) farmers I am now going to work in Guatemala and Costa Rica for Union Hand Roasted.

                                  Steven, Don Nasario & Pascale – Tierra Altos, La Libertad

As you all might know Union Hand Roasted Coffee selects from farmers who produce high quality and pay a premium price for this quality. Moreover, they develop long term relationships with coffee producers that are committed to produce high quality coffee.

My first experiences here show that these two aspects, a fair price and the long-term relationship are very much appreciated by the farmers and are most likely to positively influence the quality of coffee. The fair price and the guarantee that Union hand Roasted Coffee will buy from them reduces the risk that farmers take when they invest in their coffee fields.

To illustrate, applying fertilizer is expensive and one is not always sure where the fertilizer will actually improve yields. When a farmer is not sure whether and at what price he can sell his coffee, as is the case when selling to intermediaries or coyotes as called in Latin America, the decision to apply fertilizer therefore includes a risk. It is a big expense and the pay-offs are uncertain. Union Hand Roasted Coffee has a contract with cooperatives with specifies the quantities and a minimum price therefore farmers know how much room they have to invest.

However, there are many questions to be answered. One of them is what is this fair-price? How much do farmers need in order to maintain and invest in not only their coffee fields but also in their family, education, health etc.? Where do farmers face problems in producing a high quality coffee? And where do the strengths lie to produce the excellent cup of coffee that we all like to enjoy?! This is just a small example of the things that I am hopefully going to find out during the course of my 5 months stay in Guatemala and Costa Rica.

I will regularly update you! But now I first will enjoy a delicious cup of Huehuetanango Highland Coffee!  

                   Saludos y un abrazo

                                Pascale

Any questions you’d like to ask Pascale about her research, please leave a comment below.

The complexity of sourcing coffee in Ethiopia has always given us an edge of excitement, one mixed with a healthy tinge of anxiety that arises from the fiercely independent spirit of the Ethiopians and their determination to do things in their own ways.  From our first visit back in 2002, where it felt like we’d stepped back into the bible, on every subsequent visit the country has held a fascination for us and a desire to get inside their heads to figure out how it works.  I realise I’ll probably never achieve that understanding, but during this trip I got to know the country a little better. 

As the birthplace of coffee, Ethiopia rightly commands it’s place on the pedestal of specialty coffee, but in the last couple of years the changes created in the mechanism for bringing Ethiopia coffee to the market has changed radically.

Those of you who have followed our adventures in sourcing over the last ten years will know that at Union Hand Roasted, our goal is to find identifiable groups of small farmers who we feel have already some great coffee in cultivation and with whom we can work to tease out the very best of what can be produced in a truly sustainable manner for both the crop and community.  In Ethiopia (as with many areas we source from), the coffee is grown in small garden plots and the community cooperatives rely on large numbers of farmer members often over a relatively wide geographical area, altitude and terrain. This structure allows us to target resources on those micro-areas where not only a great quality coffee (clean cup, natural sweetness and balance) can be produced, but also ones with distinct character and regional flavour profiles that we enjoy as diversity of style (think French wine – big full bodied Burgundy or light floral Beaujolais from the south).  Two coffees may be assessed  in cupping to have top quality scores yet still exhibit dramatically different flavour profiles – our approach is to find systems where each of these special lots can be kept separate and traceable (se we know who produces it and who receives special premium payments) and bring these direct to you for unadulterated enjoyment.

The recent creation of the Ethiopia Commodity Exchange (ECM), where specific lots of particular quality (but not necessarily flavour profile) are sold to licenced exporters only permits the sale of coffee of a specific designated grade and quality, and does NOT permit isolation of traceable lots. Some exporters have devised ways around this restriction, to give a level of provenance but this is not easy to verify.   The process for the Commodity Exchange requires farmers to deliver their coffee cherries to designated Exchange Warehouses, which are out in the rural areas. Here producers are paid the current market price for their coffee. The cherries are then processed through to exportable grade but there is no segregation or separation to produce traceable lots. Equivalent grades from all farmers are mixed to create consistency and homogeneity, but with no recognition or reward to individual farmers for truly exceptional lots. This coffee is sold through the Commodity Exchange (ECX).  Coffee not deemed of sufficient quality to achieve export status is destined for the local market.  Indeed, it is not legal to sell export quality for local consumption; it has to be exported to bring maximum revenue to Ethiopia. 

The Direct Specialty Exchange (DSM)  introduced last year allowed buyers- roasters and importers- the shortest route to gain access to selected Q Graded lots  of highest quality Ethiopia certified (organic and or Fairtrade) coffees.   At the inaugural auction back in February 2010, we were able to acquire four different lots all produced from the Yirga Cheffe Farmers Cooperative Union  (YCFCU).  The Union is a regional organisation that represents and is owned by the cooperatives, and it is the Union that has the licence and capability to export the coffee produced at co-operative level for example the individual co-operatives  like, Konga, Haforsa, Koke, and Sigigia- the coffees we bought.

Our relationship with YCFCU goes back to our first visit in 2002, and we’ve been buying their coffee every year, but for a short blip. For a period of time, YCFC experienced numerous challenges around management and governance issues, and the result was a turbulent relationship between the farmer members and their board of directors with the consequence that support for the group and participation was greatly reduced. Unfortunately, this is nothing new in the complex world of coffee, particularly when dealing with so many farmers- each co-operative can have up around 2000 farmers each working 0.5 ha of land.

Conflict within cooperatives often occurs when there is lack of transparency. Farmers forget or just fail to appreciate that they own their Union, and a long process of education is all too often necessary give them the skills and confidence just to ask for, or get access to the information that belongs to them.

Ensuring there is transparent two–way transfer of information is therefore critical to a strong Union and this had been missing from the equation.  However, the impact that Takele, the new General Manager of YCFCU has had on their performance cannot be overstated.  It was encouraging to observe his strong leadership skills distilled to confidence at farm level.  In addition, our visits and continuing relationship with the group demonstrated the support of a committed buyer and has helped to provide the ‘light at the end of the tunnel’ for the producers.  The second payment (distribution of the cooperative’s profits fund) given to farmers from last season signalled a new re-energised level of activity at Konga and has attracted an increase in membership this year. We are delighted to see that they are back on track. The board of directors of a Union has to be accountable to their farmers at the level of the primary cooperative. What was now apparent to me at YCFCU office was how the farmers have direct access to what the YCFC Union does, every day.   

Back at the cooperative level, in the office of Konga co-operative, it was enriching to see the activity at their cupping laboratory; they are currently the only farmer group within YCFU that has this facility, and it undoubtedly goes a long way to explaining their high quality.  The Secretary of Konga, Sisay Daka told me how aware the cooperative is that the cupping lab is the instrument that enables Konga to improve their quality and to increase the selling price of their coffee. This is their “only income source and the current farmgate price is shining towards a bright future”. Maintaining and crafting the quality at Konga is enabled by the activity of the cupping lab which gives direct feedback to the manager of the pulping station, advising when protocols have been effective or in the event of problems, they are immediately detected and can rectified before they adversely impact quality and therefore price received.

In addition to the quality of this coffee, the second strength is the traceability through to each primary producer group.  They and I consider this the strength of the certification system, whether Fairtrade or Organic – both reveal the producer cooperative and gives visibility and hence added value to the producer.  It reinforces my schizophrenic approach on the benefit or demonization of Fairtrade.

After my visit to Konga, I travelled on to another group in the YCFU, Dama Cooperative who we are just about to begin a relationship with, and from whom I received a massively hospitable welcome.  I wanted to visit this particular group because aside from having cupped some amazing coffee from them this year, they are new recipients of a training grant to develop their governance and management skills. This programme is funded by Progreso Network, an NGO who is providing vital pre-financing* for our coffee from YCFCU this season. At Dama I saw the preparation of some special natural process coffees that we are seeking.  This was a special 2010-11 preparation that commenced with advising a democratically selected group of farmers to deliver perfect red ripe coffee cherries to the pulping station. These whole coffee cherries are carefully dried on shallow square wooden trays for up to 21 days as they gradually darken and dry out to resemble dried a dried black cranberry (or real cherry).   This process intensifies the sweet, syrupy pulpiness and makes this preparation so distinctive and irresistible.

This lot, along with our new season harvest of Konga Cooperative and a few other interesting Ethiopian coffees will be arriving at our Roastery in the next few weeks and it’s your chance (amongst our other origin micro-lot offers!) to get to really understand how much magic and diversity can be contributed by different micro-climates and the diligence of small committed farmers . 

 *Pre-financing refers to a buyer providing the cooperative with working capital with which they can fund the purchase of coffee from individual farmers during the harvest season.  In the absence of this, cooperatives have to secure commercial loans at high local interest rates which are repayed some months later when all the coffee has been collected, processed and sold.  Union Hand Roasted’s participation in this pre-finance has enabled us to build deep relationships with many communities and has been largely responsible for the consistent cup quality we are able to provide through the year.

Not an excuse to watch the World Series, late October I attended the first congress for the Global Coffee Quality Research Initiative hosted at the Borlaug Institute, Texas A & M University.

Normal Borlaug (who died in 2009) is credited as the father of the Green Revolution from his research work on wheat genetics; developing disease resistant and high yielding varieties. He is acknowledged with saving over a billion people from starvation. The Borlaug hypothesis;” increasing the productivity of agriculture on the best farmland can help control deforestation by reducing the demand for new farmland”.

 The GCQRI objective is to construct and fund an initiative to act as the industry’s research and development department, to improve, grow and protect the supply of specialty coffees into the market. The expected outcomes to be achieved at the end of the 2½ day congress were clearly mapped out ahead of the event and the congress was skilfully steered towards this point.

The initiative was borne from the passions of “Development” and “coffee” of Dr Tim Schilling. Using the formidable resource of the Borlaug Institute he has conducted a campaign to bring together key individuals who have the capability to address the problem which the specialty coffee industry is facing; a serious shortage of volumes of high quality coffees which are becoming inadequate to meet current and projected needs. The influence of global warming and potential threat of pandemics exacerbate the situation. There has been limited research into addressing these aspects of coffee supply problems

Therefore, the overarching direction of the meeting was creating a platform to set up a programme to direct basic and applied collaborative research that would be beneficial to the specialty coffee industry.

 However, one of the main themes running through all discussions was the lack of a defining measure for quality. There is a demand for research demonstrating an ultimate objective measure of cup quality to give a clear correlation between biochemical data and sensory evaluation. This is appalling in our industry on which our foundation is based on quality.

 From a personal view, a major thrust of developing research has to be at the molecular and genetic level. This is has to be a key hope in mapping the diverse array of phenotypes that could be beneficial in improving yields and cup quality. Relying on only two coffee species to support our daily caffeine habits is a risky strategy because domestic coffee is fragile and threatened by climate change. A remarkable fact that puts this in perspective is that that 96% of the known genetic diversity of coffee is found amongst the tiny uncultivated crops in Ethiopia, all of the coffee traded and consumed from the Americas, Africa and Indonesia account for just 4%.  Using this Ethiopia as the resource to find and use new species may protect the future of our daily cup. One presentation (Dr V Petiard) outlined the need to determine the genetics within the next 20 years. But in reality immediate action is critical; wait 20 years and it will be gone. 

 The aim of this Initiative is to achieve coffee quality improvements that can be directed in part toward improving livelihoods in some of the world’s least food‐secure communities. But the irony is as economic development increases there is more pressure on land leading to a decrease in coffee supply. In addition to economic effects, weather patterns and climates will continue to be unreliable so demand for more stress tolerant germplasm is essential.  

 The strategy many national coffee research programmes have taken in directing farmers has not been in the interest of the specialty market and probably not in the best long term interest of farmers. An example quoted by Counter Cultures Peter Guiliano is the situation in Kenya. We have to remember that coffee is not a basic foodstuff, its specialty trading value is assessed on the basis of flavour –  ”we’re in the flavour business”. But if farmers are directed to plant high yield, disease resistant trees, then particular flavour nuance may disappear.  Ruiru11 var in Kenya was cited several times as an example of this, although most of this is anecdotal evidence and research should be looking at the question of the elusive blackcurrant in Kenya coffee.  It is essential that centres of research link cup quality to diverse factors influencing coffee production; yield, disease resistance, altitude & post-harvest processing.

 So, Schillings Paradigm is that despite the huge actual value of the coffee market, why the lack of solid data available to produce specialty coffee? The answers are varied but probably because it’s still a young industry and too much variability exists at origin to begin to ask basic questions. Origin based research has focussed on yield and resistance but not cup quality. And most critically, research is restricted because current sensory methods are too variable. Biotechnology has to be correlated to sensory. 

 Consumers have demonstrated there is the potential to pay more for perceived quality differentiation. So to achieve these improvements consistently, every step of the supply chain has to be deconstructed. Starting with the genetics and how cup quality is genetically determined. Evaluate this phenotype through research for genetic improvement, how to propagate and distribute improved varietal, demand for extension services at farm level, export/trading, through to Quality Control, traceability and Intellectual Property.

 Some of the concerns at the meeting was to ensure the expectations of everyone within the industry are heard, and that no one gets a raw deal; from the small producer onwards.  There was concern that the strategy of research could influence producers to accept lower pricing, or could lead to increased input costs reducing profit margin for producers. However, the objective for the initiative is to be equitable for all participants.  

 I’ve mentioned genetics several times and there was some naivety, perhaps anxiety, expressed towards the geneticists.  From my discussion with participants of the International Coffee Genome Network (ICGN), this was one of the most positive advancements (coffeegenome.org). ICGN represents scientists from universities, research institutes and industry from Africa, America, Europe and Asia. This collaboration has a goal to advance agricultural research for sustainable coffee production by developing knowledge of the coffee genome at the molecular, biochemical, and physiological levels.

 As already mentioned, despite its economic importance coffee has received limited attention with respect to molecular genetics and genomic research so the brief of ICGN is to develop a strategy to sequence the coffee genome. 

The premise is that sequencing the genome will help decipher the genetic and molecular bases of important biological traits in coffee that are relevant to farmers, roasters, and consumers.  This knowledge is fundamental to allow efficient use and particularly the preservation of coffee genetic resources for the development of improved cultivars in terms of enhanced quality, yield, and resistance with reduced economic and environmental costs. 

Although considerable diversity exists in diploid Coffea species, its use in conventional coffee breeding programmes has been very limited. Coffea arabica is characterized by a very low genetic diversity, reproductive biology, and evolution. It is the narrow genetic base of cultivated C. arabica that has created the bottleneck for coffee breeding and limits the opportunity to develop cultivar improvement.  The strategy to sequence the coffee genome is to examine first the two species that are ancestors of the most cultivated species Coffea arabica. The father species, Coffea canephora (robusta), and the mother; the non-cultivated species Coffea eugenioides. 

 In the future, the ability to capture and manipulate this genetic diversity and effectively utilize germplasm in traditional coffee breeding programmes will be vital for sustainable coffee production. 

But these advances in understanding the coffee genome and its biology must be achieved sooner rather than later in order to get the benefit of increased quality, yield and protection from losses by pests, diseases and stress related to climatic changes. Unravelling the coffee genome will contribute significantly to future coffee improvement.

 A final comment is the proposed funding of the GCQRI is through a “check-off” mechanism, where green coffee buyers / roasters pay USD$0.005/lb as a fundraising tax. There are still questions about managing this mechanism.  Union Hand Roasted Coffee contributed towards the genesis seed-funding of GCQRI and we certainly support the overarching aim of the project and intend to continue our participation.

It is important to state here that although there is indeed a shortage, specialty coffee of the very highest quality is available to those buyers who are prepared to pay for it.  The current turbulent market is a separate although related issue and could make the basis for more comment.   

 Original presentations and transcripts from the initiative can be reviewed on www.gcqri.org