My Takeaways from the World Coffee Producers Forum in Brazil

I attended the World Coffee Producer Forum in Brazil July 10th-12th.  Per their website: “In the 2019 Edition of the event, Brazil together with other producing countries will follow with the purpose of addressing and resolving scenarios that can compromise the future of coffee supply by inviting all the productive chain links to participate in order to act jointly and co-responsibly”.  The main issues discussed were the low coffee market prices and how climate change will impact coffee.  

This is a list of the six major points/proposals that I gathered from the talks, along with my opinions.  

Create a sustainability fund of $10 billion

Dr. Jeffrey Sachs indicated that the current high-volume production from Brazil and Vietnam is the standard and that it will maintain coffee prices around their currently low levels.  He recommended that in order to offset the negative consequences of this hyper-efficient production, a fund of $10 billion be created to support the small farmers that can’t compete at this scale.

This sounds incredibly altruistic for an industry that has purposely driven high yields and consolidated profits in favor of the traders and industrialized farmers.  It also sounds like a give-back and an NGO approach to a major socioeconomic issue. In my opinion, the commercial farmers, and traders should do what they do, letting the market decide their fate. We in the specialty world should continue to push quality, sustainability, direct farmer relationships, paying farmers fair prices, all while giving consumers high-quality, great tasting coffee at a fair price to them.

Set a fixed price minimum of $2 per pound

I really like this concept and I think it’s feasible.  It would weed out the greedy, short-sighted roasters that make massive profits in low markets (and are part of manipulation at origin) and it would somewhat even the playing field.   The key would be to ensure that there are some quality parameters around this price minimum. 

Promote Price Transparency

I think it's an interesting scenario wherein the coffee industry is being held to the standard where everybody needs to expose their prices. I think it's good.  It’s the price the industry should pay for centuries of exploitation and manipulation. The real challenge is verifying the data.  There are too many subsidiaries and partners working together and there are “backend” means to actually pay producers less—like charging back milling, export, and financing fees AFTER the purchase price.   

 Continue Working on Better Technification

Typical big agriculture mindset.  Let’s technify to get more efficiencies.  Nothing groundbreaking—and much needed with climate change.   This is ultimately good for scale and efficiencies, which will lead to higher, cheaper output.   Guess what this will do to global coffee prices…

Increase Internal Consumption in Coffee Growing Nations

YES! Generate awareness, pride, and value in high quality coffees within the coffee-growing countries.   This would be a game-changer.  It’s hard to do in the smaller countries as their actual market is smaller and the income level is low, but let’s start this!  It would give coffee-growing nations a new option and a new level of autonomy. 

New Certifications/Verification Models

It was proposed that the industry looks at certifying “economically sustainable” coffee or  “origin roasted” coffee. The LAST thing we need is more certifications. They can be manipulated just as easily as current certifications are being manipulated. Plus, consumers don’t want to be bombarded by 1,000 certifications.   On origin roasting, I’m also skeptical. Coffee has a freshness window, and if you're talking decent volumes and you're putting on a container on a ship, it can be weeks from port to port.   It doesn't make that much sense to me. I think quality suffers. Maybe for low-grade commercial coffee its ok.

In my opinion, we need to recognize that there are two markets: commercial and specialty. Commercial can keep doing what it does with the c market—delivering commercial quality to the masses.  The smaller countries then need to really focus on specialty. They need to create tiered specialty qualities (80-83, 84-86, 87+) and they need to market that quality as they continue improving it.  They need to then drive their own internal consumption and…coffee farmers need to diversify!

The coffee industry is complex and the issue even more so.  I do think that we need to begin taking action rather than continue talking and having “big ideas”.

Learn more about our efforts to eliminate systemic poverty in Latin America through the direct trade of artisanal organic foods at www.mayorgaorganics.com