By Vivek Verma, CEO coffee and Juan Antonio Rivas, Senior Vice President & Global Head -Sustainability and Business Development - Coffee at ofi (olam food ingredients)
It has been one year since we announced our public commitments for a more sustainable coffee future, with Coffee LENS (Livelihoods, Education, Nature at Scale). In this time the industry has continued to battle COVID's socio-economic fallout with many asking whether it will be one shock too many for smallholder coffee farmers. But, just in 2020, ofi supported over 90,000 coffee farmers all over the world with training, fertilizers, seedlings, as well as finding buyers for their coffee.
The price of coffee beans has actually doubled over the last year partly due to record freight costs and extreme weather events in Brazil. But that doesn't make up for years of low prices and climate shocks. And with coffee trees taking up to five years to mature, farmers are left licking their wounds for several seasons. Meanwhile demand has stayed stable despite hospitality closures, with consumers recreating their favourite espresso or cold brew at home. But now they expect more.
Customers and consumers don't just want to know about the origin of what they buy, but also that their coffee carries a positive story for the people and environment it came from.
These are compelling reasons for maintaining our focus on our 2025 goals. They are challenging us to do more and to do better. But how do we make the impact of what we were already doing more meaningful and real for the people, communities and landscapes behind our coffee?
This is what we have learned…
Take time to understand every farmer's reality for better ROI
In many ways most of the world's close to 15 million coffee farmers fit a typical profile. They grow coffee trees on just a few hectares, with limited access to inputs, equipment and labor. So for those of us in a position to support them, supplying every farmer with a few bags of fertilizer would seem a logical and fair intervention to help boost their yields and income. But the reality on the ground tells a very different story.
ofi agronomists, together with our data analysts, realised that the effect of the fertilizer wasn't the same on all farms. For larger farms the fertilizer wasn't enough to cover all trees, so those that were missed did not improve their yields. Other farmers didn't see any improvement because they hadn't pruned or weeded. So the fertilizer fed the weeds and excess branches rather than the fruit. Some farmers used it for other food crops or even sold their fertilizer because they needed cash to feed their families or cover school costs for their children. Providing equal support to every farmer does not yield equal results. It requires a tailored approach.
This is where farmer segmentation comes in. By categorizing farmers according to farm size, yields, skills, and motivations, we can tailor services to individual farmer needs.
As an example, farmers with relatively large plots of land but low yields due to poor farm maintenance are linked with well-trained pruning teams to carry out essential farm maintenance. This is done before providing them with any fertilizer. And on the other end of the spectrum, where you have the poorest farmers with less than a hectare, crop diversification, basic farm tools, and additional revenue streams are more meaningful services.
We've invested so much over the last decade in having teams on the ground - with 235 agronomists working with farmers, forming partnerships, harnessing tech to capture farmer data and provide traceability. Now it comes down to our ability to invest in a tailored approach. With the same effort, time, resources, and manpower, we can match farmer needs and motivations with targeted support that delivers more value for both the farmer and the entire coffee chain.
Farmers need to see value in climate-smart coffee
Under Coffee LENS, we have a target to reduce GHG emissions in our supply chains by 15%, with improved land-use management and fertilizer-use part of the route to achieving this.
We know that planting shade trees, optimizing fertilizer use, treating waste-water, and composting cherry pulp are the most significant ways of reducing coffee's on-farm footprint and therefore improving farmers' climate resilience. But we're talking 5-10 years down the line, and for subsistence farmers planting trees to "save the planet" simply isn't the priority.
We need farmers to see the value they get from the natural resources and landscapes around them, so that they want to do more to protect and preserve them. But they need an incentive, and paying them for the carbon they sequester through climate-smart practices is one avenue we're exploring.
In DRC, we're working with expert partners1to improve coffee production for 8,500 farming households, as a way of reducing poaching and deforestation around the Kahuzi-Biega National Park. But rather than positioning the former as services provided by us, the farmers should see the park itself as their support system, as a source of clean water, seedlings and healthy soils.
There are also short terms wins for people and planet. We're experimenting with sustainably produced biochar for example, as an alternative nutrient source to fertilizer. It's based on the concept that when this biochar is submerged in the fermentation tanks in washing stations, it absorbs all the bi-products from the waste-water. Supercharged with organic matter, it can then be buried in the soil beneath the coffee trees to feed them with a slow-release of rich nutrients.
On paper, it's a win-win. Healthier soils and trees produce more cherries for the farmers. Less fertilizer is required, meaning cost savings as well as lower emissions. And carbon is sequestered from the coffee wastewater which is also cleaned in the process.
For impact at scale, think coffee with passionfruit, eggs and bees
We need a whole-farm approach. To make coffee viable for farmers, we need to look beyond one crop at how to increase total income.
With research partners like the IITA, we're assessing which crops are compatible to grow with coffee to increase total farm output. Cassava for example, is a major food crop as well as generator of cash income, but it needs to be grown separately from coffee so the two crops don't compete. Leguminous plants like Calliandra are a useful nitrogen fixer and works well amongst coffee trees. As well as replacing the need for nitrogen fertilizer, it's an incredibly low-maintenance tree for farmers and its foliage can be used for animal feed.
Its extensive root system also helps rainfall penetrate the soil, thereby retarding runoff and preventing landslides. This is proving very useful in origins with high soil moisture content like DRC, where erosion is a major challenge for coffee farmers. Lemongrass also serves as an effective soil binder, in addition to its medicinal properties.
In South American origins, working with Heifer International on the Beyond Coffeeproject, we've been able to determine which diversification support and activities generate the biggest returns for farmers. In Nicaragua, it's passion fruit trees, supplied with farm maintenance kits; in Honduras it's beehives and honey production; and in Mexico it's hens and egg production.
We've been joined by multiple partners in the second phase of the project, allowing us to scale up these activities and put over 6,000 coffee households on a path to a Sustainable Living Income by 2025. Cross-cutting strategies on gender inclusion and climate-smart practices will also ensure there are no trade-offs between social and environmental goals.
A fresh perspective is needed to inspire the next generation of coffee farmers
As well as knowledge and resource gaps, we've identified a significant perception gap. We want to ensure farmers are profitable to secure future supply. Many smallholder farmers however, don't see coffee farming as a way out of poverty, but the reason for it. This means their focus isn't on investing in their farms with the intention of their children taking it on. They are more likely to use any cash left over from selling their coffee to cover schooling fees or food for their families.
There's no long-term ambition, and therefore no incentive for the next generation to continue in their parent's footsteps.
One small step we've taken to redress this balance in Uganda is to provide seedling packs for school children to plant vegetable gardens. These are accompanied with story booklets and quizzes to encourage schools to incorporate agriculture into the curriculum. They also received conventional schoolbooks to save their parents from allocating precious farm resources to pay for them.
We're also running family succession projects in coffee communities. These involve environment-themed essay or drawing contests in the local schools and regular community meetings. Older children are also invited to observe their parents' Saturday morning training sessions on the farms.
Rafaela Silva Valvassora is a participant in the Jovem no Campoproject, launched just last month in São Sebastião, Brazil. She told us "one day I'll manage my own farm and I know that when I put all the knowledge that I've acquired on this course into practice, I'll make fewer mistakes, and I'll start in the right way from the beginning."
Over 30 people aged 16-20 are currently engaged in the program which will run until the end of the year. They'll receive a certificate on completion of their technical training, helping set them up with the basic skills and motivation to apply to their future farming careers.
You need the right systems and expertise in place to translate ambition to action
We believe we are on track to deliver our 2025 goals and have made good progress in a number of areas. More than 90,000 farmers in our programs are getting more value from their crop from training and certification premiums, out of a target of 200,000. We're nearly half way towards our target of providing training for 100,000 people on agricultural or business skills. We've planted one million non-coffee trees, with 4 million to go. And we have improved soil health over 4,000 ha of coffee growing area, out of 20,000 ha targeted.
There are of course other areas where we have not progressed at the speed we would have liked. Just getting the right systems and technical expertise in place is a huge task. Unlike agronomy or processing, activities like vocational training for young adults aren't in our DNA. So this is where we need the expertise of global knowledge partners so we can roll out the right programs on a global scale.
GHG emission targets meanwhile are at the centre of many conversations, but the maturity of understanding and response varies enormously within the sector. We have the benefit of the tools and data available on AtSource, the sustainability insights platform, to understand and report on our social and environmental impact. And we can build on these insights to calculate potential emission reductions. But our focus this year has been on getting customers and financial institutions on the same page when it comes to climate targets, strategies, and even ambition.
And then there's the considerable upfront injection of capital required for implementation that ofi can't absorb alone. Water reduction strategies, for example, require the modernization of farmers' processing facilities to make a real difference. This is where green finance can really help us achieve the scale we need.
We'll be publishing our first full impact report early next year to align with ofi's annual sustainability reporting. But looking further ahead, our priority will be translating all the analysis to action, together with existing and new partners to help make it real.
1 ofi is partnering with USAID, Nespresso, TechnoServe, WCS and Asili as part of the Gorilla Coffee Alliance in DRC.