Coffee News Club: Week of April 1st

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Drink your coffee to grow up big and strong. 

Plus, coffee production in Colombia has fallen 35%, the new EU deforestation legislation impacts coffee-growing countries, and farmers in Mexico protest Nestlé’s buying practices.

‘High Hopes, Low Prices: How Nestlé is Driving Mexican Coffee Farmers to Ruin’ – via Public Eye

A Swiss NGO called Public Eye just released an in-depth report investigating the actions of one of the world’s biggest coffee companies, Nestlé, concerning coffee farmers in southern Mexico. Combining interviews, photojournalism, and video of producer protests, the report shows how Nestlé encouraged farmers to switch to growing robusta coffee with the promise of higher yields and income.

Once farmers switched and became almost totally reliant on the coffee giant, Nestlé began reducing the price paid to them. This year’s terms are “significantly lower than the previous year’s price, despite the fact that the Robusta price on the globally authoritative London Stock Exchange has climbed by 50 percent in the same period to its highest level in 30 years.”

Nestlé launched the Nescafé Plan in Mexico in 2010 with the goal of “creat[ing] value across the coffee supply chain, from farmers to consumers to us,” as the company’s former CEO put it at the time. The company encouraged farmers to switch to Nestlé-provided high-yield robusta seedlings and offered training in agronomy and entrepreneurship that they promised would increase productivity and thus give farmers more income. Thousands of farmers signed up over the ensuing decade, and according to sources who spoke to Public Eye, once they completed the training and switched to robusta, they never received the promised profits.

We recommend reading the entire story, which features interviews with producers who joined the Nescafé Plan, farmworkers, researchers, and coffee experts. Nestlé did not respond to requests for an interview. Here are some key takeaways from the piece:

  • “Even without the expensive fertilizer, production costs me almost 30 pesos per kilo. Nestlé pays me less than that,” says Eduardo Camarena, a farmer who signed up for the Nescafé Plan in 2011. Farmers, who say they would need between 40 to 50 pesos per kilo of coffee to earn a decent living, currently receive 26 pesos from the intermediaries who purchase their coffee for Nestlé.
  • The current price farmers are paid as part of the Nescafé Plan is lower than in previous years, even though robusta prices have increased. As Public Eye notes, “Nestlé states that its pricing is based on trends on the international markets. The farmers say that, in the past, a low price was often justified by the low market rate. Now that this is high, however, it apparently plays no role.”
  • The robusta plants dispersed by Nestlé, ostensibly to increase yields and thus bring farmers more income, need to be constantly fertilized, or else they bear little fruit—and fertilizer is expensive. Additionally, the plants struggle if there is not enough rain—nearly two-thirds of the country is currently experiencing drought. The plants need to be replaced every eight years compared with 50 years for the traditional arabica plants farmers used to grow.
  • The situation in southern Mexico has gotten so bad that many young people from the region are emigrating to the USA because it is so difficult to make a living growing coffee. Many producers employ seasonal farmworkers, primarily from Guatemala, to help during harvest, but their pay has shrunk so drastically that many are continuing north to the border.
  • But farmers have been speaking out. Protests against Nestlé’s practices in southern Mexico include road-blocking, organizing meetings, and even burning Nescafé Plan sacks and robusta seedlings. Even after the protestors secured a meeting with Nestlé representatives, they discovered “that no-one from the Nestlé purchasing department has appeared and those present have no authority to discuss prices. However, in three days’ time they would receive a response to their price demand. Sure enough, the answer arrives punctually, delivering a single word: No.”

Read the full story here.

‘How EU Deforestation Laws are Reordering the World of Coffee’ – via AP News

The coffee industry is still grappling with the impending EU Deforestation legislation (EUDR), which will be enacted in 2025 for big companies and the following year for smaller brands. Despite ongoing rumors that the EU might delay implementing some parts of the legislation after several countries also voiced their concerns, those trying to prepare face complications and uncertainty.

On the consuming side, European companies are trying to determine how to comply with the new rules that say they must prove that the commodities they are importing did not contribute to deforestation. Some, like JDE Peet’s, are partnering with sustainability auditing companies to help ensure their supply chains are up to scratch. Many, such as Lavazza, are expressing dissatisfaction, with the Italian coffee giant complaining that the complexity of the coffee supply chain means that the regulation will be “difficult to implement.”

For producers, the threat is more immediate and existential. Ethiopian stakeholders report seeing European buyers look elsewhere due to the difficulties in gathering data from the country’s two million smallholder farmers—the same is true for producers in Peru. “Collecting information about hundreds of thousands of small farmers is difficult given the country’s weak institutions and the fact that most farmers lack land titles,” the AP reports, citing a recent study of the EUDR’s impact.

In Vietnam, the agriculture ministry began working on a plan almost immediately after the EUDR’s approval: “a national plan that includes a database of where crops are grown and mechanisms to make this information traceable.” However, farmers in more remote areas still find it difficult to collect and report data.

Brazil is another country that could benefit from the legislation because “its coffee grows on plantations that are far away from forests and it has a relatively well organized supply chain.” Most of its coffee likely already meets the EUDR sustainability requirements. 

Read the full story here.

More News

World Coffee Research Releases Seed Quality Assurance Report’ – via Global Coffee Report

UC Davis-Developed Roastpic Promises Low-Cost Tool for Coffee QC‘ – via Daily Coffee News

Louis Dreyfus Agrees to Acquire Brazilian Instant Coffee Exporter Cacique’ – via World Coffee Portal

The Legendary Coffee Exchange By Cafe Imports Returns To The SCA Expo In Chicago‘ – via Sprudge

New York’s Laughing Man Coffee Launches Franchise Program‘ – via Daily Coffee News

Cotierra Raises $1 Million for Biochar Production on Coffee Farms’ – via Daily Coffee News

Specialty Coffee Market Expected to Grow More Than 12 percent by 2030‘ – via Global Coffee Report

Coffee Supplies From Top Shipper Vietnam Seen Shrinking Further‘ – via Bloomberg

Elevating Dreams Erasing Divides: A Coffee Pitch Event Comes To Chicago’ – via Fresh Cup Magazine

Coffee and the Climate Crisis

According to a report in the Independent, coffee farmers in Colombia’s Sierra Nevada mountain range are facing unpredictable rainfall cycles and warming temperatures, to the degree that production has fallen 35% over the past five years.

One farmer explained that thirty years ago, workers wore coats in the afternoon, but now, temperatures are reaching 82 degrees. “We are natives of the Sierra Nevada and we feel really sad because we know every day is getting worse,” Javier Ardila said.

Colombia is a big country, and the impacts of climate change differ depending on the region and altitude. A study in 2021 that divided the country into 521 municipalities to examine regional differences predicted that overall, the country’s production would increase over the next few decades, but low-lying areas, in particular, would be hard hit by changing weather patterns. 

“Low-altitude municipalities will be negatively affected by climate change, and thousands of growers and their families in these areas will see their livelihood jeopardized because productivity is likely to fall below their breakeven point by mid-century,” said lead author Federico Ceballos-Sierra from the University of Illinois Urbana-Champaign.

However, even high in the Sierra Nevada, farmers are seeing problems that they never used to experience because of climate change, like a rise in pests and diseases. At the same time, fertilizer and labor costs increase production costs. The farmers interviewed for this article are part of the Red Ecolsierra Association, a Fairtrade cooperative using price premiums to invest in agroforestry farming techniques and infrastructure to help farmers access international markets.

“Behind every cup of coffee is a family that depends on it, who has dreams and wants to move forward,” said farmer Jaime Garcia Florez. “We produce this cup of coffee with great pleasure and lots of passion. We hope that this will be rewarded and that the support continues so that we can continue.”

Is Coffee Good For You?

Every week, the consensus on coffee’s impact on health seems to change. This week, however, researchers report it’s good for you—and in more ways than one. Coffee can help lower the risk of bowel cancer recurrence and improve muscle health and function as we age. 

A study from the Netherlands found that people diagnosed with bowel cancer who drink two to four cups of coffee a day were less likely to see a recurrence of the disease. The effect was dose-dependent, so those who drank more coffee saw their risk fall further—up to 32% for those who drank five cups per day.

Dr Ellen Kampman from Wageningen University told the Guardian, “It’s intriguing that this study suggests drinking three to four cups of coffee may reduce the recurrence of bowel cancer.” Her co-author, Professor Marc Gunter from Imperial College London, called the findings “very provocative as we don’t really understand why coffee would have such an effect in bowel cancer patients.”

Meanwhile, an international group of researchers discovered that the molecule trigonelline can help improve muscle health and function. High blood levels of the plant alkaloid found in coffee and various vegetables positively correlated with muscle strength. In contrast, low levels were associated with sarcopenia, an age-related loss of muscle mass and strength.

“We were excited to discover through collaborative research that a natural molecule from food cross-talks with cellular hallmarks of aging,” said Jerome Feige, Head of the Physical Health department at Nestlé Research, which co-led the study. “The benefits of trigonelline on cellular metabolism and muscle health during aging opens promising translational applications.” 

Previous studies have found that trigonelline can help with memory problems related to aging. The molecule “has been shown to possess hypoglycemic, neuroprotective, anti-invasive, estrogenic, and antibacterial activities.”

Beyond the Headlines

‘Four Key Takeaways From The SCA’s Value Distribution Survey Results’ by Ashley Rodriguez

‘Experts Share Emerging Coffee Industry Trends Of 2024’ by Garrett Oden

‘Private Equity vs. the Coffee Workers’ by Fionn Pooler

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Fionn Pooler

Fionn Pooler is a coffee roaster and freelance writer currently based in the Scottish Highlands who has worked in the specialty coffee industry for over a decade. Since 2016 he has written the Pourover, a newsletter and blog that uses interviews and critical analysis to explore coffee’s place in the wider, changing world (and also yell at corporations).

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