How Coffee Farmers are Responding to COVID-19
With much of the world under lockdown to reduce the spread of COVID-19, many people are changing the way they consume coffee — with significant implications for the entire coffee industry. We talked to Paul Stewart, TechnoServe’s global coffee director, to find out how the pandemic has impacted the coffee supply chain and what TechnoServe is doing to help.
The coronavirus crisis is impacting every aspect of the coffee supply chain in some way — from the smallholder coffee farmer, to the exporter, to the roaster, to the consumer. As stay-at-home orders have become more widespread, many people have transitioned from drinking coffee at work or at a cafe to drinking coffee only in their homes. These changes in demand are having ripple effects throughout the whole supply chain.
How is COVID-19 impacting the coffee supply chain?
While coffee sales at cafes and restaurants have plummeted due to COVID-19, home consumption has soared, with some supermarket chains in the United States reporting coffee sales up by 250% in recent weeks. Some specialty coffee companies that rely on cafe and food service sales have been hard hit, which has had a knock-on effect for the farmers who sell a large share of their coffee to these companies. But most farmers, cooperatives, and exporters have a diverse set of buyers and are not seeing a significant impact on sales. Traders are reporting that they’ve been able to manage the few contract cancellations by finding new buyers in Asia — where sales are rebounding — or by canceling contracts for large diversified exporters who can cope with the cancellation.
What is the situation like for coffee farmers right now?
The good news for coffee farmers is that international coffee prices have not fallen as we have seen for other agricultural export crops like cocoa, cotton, and cashew nuts. Wet mills that process cherry coffee are operating in Kenya and DR Congo with social distancing and hygiene controls in place. But we are starting to see disruption for farmers in Latin America as the virus spreads into coffee communities. We expect coffee exports to continue, but there will be significant risks of disruptions to supply chains because of the pandemic.
Right now, one of our main concerns is the health of the coffee farmers we support. If the virus begins to spread through coffee communities with limited healthcare services, the impact could be severe. Coffee communities with young populations may be less affected, such as in Ethiopia, where only 6% of coffee farmers are over 60 years old, or Uganda, where 15% are over 60. However, communities with older populations could be especially susceptible to the virus. For example, in Puerto Rico, over 40% of coffee farmers are over the age of 60.
What are the biggest challenges that coffee farmers are facing?
Coffee farmers in communities where COVID-19 has spread are being affected in three ways. First, farmers who hire outside labor are reporting labor shortages, as farm laborers are either afraid or unable to travel. For example, farmers in Guatemala are reporting that labor costs have increased by 30%. In Peru, which is entering peak harvest season, exporters are projecting that up to 30% of the coffee crop may not be harvested.
In addition, reduced transportation in rural areas due to travel restrictions is making it more difficult for farmers to get their produce to market, which is resulting in income losses for coffee farmers in Guatemala who also sell perishable crops such as avocados. Farmers around the world are paying higher transportation costs to get their coffee to market. Finally, agro-inputs such as fertilizers are not readily available in some rural communities because of shop closures. More coffee farmers are likely to experience these disruptions in the coming months as the virus spreads to more coffee communities.
What is TechnoServe doing to help?
TechnoServe is committed to continuing to train the coffee farmers in our programs during this difficult time. Much of our farmer and wet mill business interactions have moved to the digital space. For example, we are using phone calls, text messaging, videos, and WhatsApp to communicate important information with farmers and cooperatives. In the few places where we are continuing in-person training, we are putting the health of the farmers first by restricting the travel of our staff outside of their local communities. We are also restricting training events to small groups and putting in place strict sanitation and physical distancing practices.