Alison M. Jones Photography:
TechnoServe Responds to Coffee Crisis

Alison and Michael Kibinge, Kenya Country Director for TechnoServe at annual meeting June 2, 2004. (Photo: © Heather Christensen)

TechnoServe Annual Meeting
One Madison Ave, New York
June 2, 2004
Notes by Heather Christensen

A production surplus is the cause of record lows in the price of coffee. A long-term decline in price per pound has been recorded through the 1990s and has been labeled as a cyclical downturn, a systematic change in the coffee industry.

Three main factors for this change are:

• Innovation in Brazil: increasing the yield by expansion into no-frost zone, combined with a sophisticated practice of coffee harvesting;
• Entry of Vietnam into the coffee industry;
• Increasing share of robusta bean dropping the average price of coffee.

Kiambu, Kenya: Coffee beans

Arabica is a higher quality coffee bean than robusta, yet coffee roasters are becoming more skilled at removing the bitterness of robusta. The technology is improving and creating a better tasting low quality bean. In Brazil and in Vietnam, high labor efficiency and a low labor cost has dropped the price of coffee.

TechnoServe is working to create a broad scale differentiated labor group, and also advises that farmers produce specialty coffee. Coffee producers at a high altitude have the advantage of being able to grow distinctly different coffee from the low altitude low cost coffee producers.

La Porrona, Nicargua: farmer eating banana in coffee field.

Specialty coffee is obviously a niche market. A grower can hold his position in the market with specialty coffee while the surplus of 6–30 million bags of lower quality coffee is depleted. Specialty coffee is 6% of the coffee industry; and of that 6% of specialty coffee, approximately 92% is gourmet, 4% is Free Trade and 4% is decaf.

TechnoServe puts forth two plans:

• Support specialty coffee producers and help them achieve premium market prices for their premium coffee;
• Promote diversification at a regional level, creating economic opportunities for children of coffee growers.

For more information, see The Coffee Quality Institute.