The business case for farmer profitability as the best strategy for supply chain risk management

The importance of coffee in the world stage is significant: it is the second most valuable primary product of the global economy and its cultivation, processing, transportation and trade provide employment for over 25 million coffee farmers and thousands of professionals worldwide. Furthermore, coffee has played a key role in the economic and political arena of more than 50 developing nations during the last century and has shaped the cultural, environmental and social ecosystems of endless communities around the globe.

Due to its relevance in the livelihoods of thousands of people in producing nations, and their dependence on coffee to survive, it is important to bring to light some of the greatest threats to the long term sustainability of this noble crop. Risks vary on their degree of occurrence and impact and include, but are not limited to, small farmer profitability, farmworker protection, gender equality, environmental conservation, price volatility, migration to cities, land and labor pressure, and climate change among many others.

Building resilience among coffee farmers requires collaborative industry efforts to build a strengthened sector that is better equipped to overcome environmental and economic pressures. The trade and the industry are already looking for ways to channel investments into their own supply chains to mitigate risks and assure the intended quantities of a quality product. Yet, it is important to acknowledge that given the magnitude of the challenges coffee faces, we alone cannot and will not solve them all.

Upgrading will also require investments in innovation, extension services and improved market knowledge. Best agricultural practices are well-known by leading research and extension institutions worldwide so it is a matter of disseminate them effectively and efficiently. Technical assistance must not include only best in kind agricultural and sustainability practices but also financial and managerial training that enables small holders to position themselves as entrepreneurs capable of driving change and economic growth within their communities.

Read more from David on this topic in his article in the Q3 2015 edition of the Specialty Coffee Chronicle.