Coffee sustainability is an effort to bring the importance of smallholder farmers and their livelihood into the equation and also the adoption of shade grown coffee to support forest conservation.
Indradi will share tips on how to create new collaborations with like-minded individuals and organisations to contribute to achieving the UN Sustainable Development Goals (SDGs), especially Goal 17: Partnership for the Goals. This session is drawn from Indradi's lecture topic at Singapore University of Social Sciences.
Indradi: Hello. My name is Indradi Soemardjan, and I'm an Indonesian living in Singapore with my teenage boys Keilani and Kainoe, who are studying at UWC Dover campus. Today I would like to talk about coffee. Coffee makes the world go round. Although I have been involved in coffee production for nearly ten years, I'm still intrigued by the complexity of it. Behind each cup there are hundreds of farmers, processors, buyers, traders, roasters, baristas and retailers. It is a complex system that relies on a healthy environment, decent working conditions and a prosperous community. Let me explain to you why it is so fascinating.
First question: How important is coffee in the world? Coffee is only ranked 98th as the world's most traded product. In fact, coffee is not even the world's second most traded agricultural product. But imagine the morning where you couldn't drink coffee. What were you feeling? Irritable? And what did you feel when you finally had some coffee? Relief. More than 2 billion cups of coffee are consumed each day worldwide, and they have adopted coffee as a lifestyle. And my summer coffee outlets in Jakarta and Singapore are just one tiny speck that contributes to that billions of cups.
According to history, the earliest credible evidence of coffee drinking or knowledge of the coffee tree appears in the middle of the 15th century in the accounts of Ahmed al Ghaffar in Yemen. It was in Arabia that coffee seeds were first roasted and brewed in a similar way to how it is prepared now.
By the 15th century, coffee was being grown in the Yemeni district of Arabia, and by the 16th century it was known in Persia, Egypt, Syria and Turkey. I'm sure you know the word mocha. Mocha is actually the name of a trading port in Yemen. Now it is what we call a chocolatey tone in coffee drinks. But for global trade we have to talk about the Dutch and how it is related to Mocha, Yemen.
In the early 18th century, Amsterdam became the world's coffee capital thanks to the coffee beans supplied from Java to Europe. The coffee trade was profitable and was under the control of the Dutch colonial government. You probably ask why the Dutch? The story says Indonesia and the Netherlands crossed paths in 1616. That is when Peter Van de Brooke, a merchant, an administrator of the Dutch Trading Company, or VOC at the time, stole coffee plants. Yes, he stole it from plantations in Mocha, Yemen and brought them to Amsterdam. Just a little background story. Coffee traders back in the Middle East and Africa then wanted to preserve the coffee monopoly. Only a few traders are allowed to deal in coffee. Any fertile seeds or living plants were not allowed to be exported out of the Arabian Peninsula. The Ottoman empire at that time ruled the coffee trade, but then competition became intense due to coffee's global popularity. However, the climate in the Netherlands was not suitable for large-scale coffee cultivation. So the Dutch tried hard to get a deal with the Ottoman Empire for the rise to sell eastward. The climate in the Netherlands was better for tulips, of course, so growing coffee in the Netherlands was a big no no.
The VOC was finally successful to get past the Ottoman, and in 1696, the VOC successfully shipped its first live coffee plants to Batavia. Which is now Jakarta, the city where I was born and raised. Ten years later, the VOC took the harvest from Java coffee seeds or green beans via the port of Batavia to Amsterdam, and they got rich from it for the next few centuries. To give you a perspective, at its speculative height of its multi-commodity trait, mainly of coffee and exotic spices, the VOC was worth more than $1 trillion in today's terms. To put it in sociological context, coffee was a point of contact between the Middle East and Europe in the early morning period being traded by European and Muslim merchants alike in the Indian Ocean trade. After Europeans had secured their own coffee crops, coffee was part of both the slave system and colonialism being cultivated in far flung colonies from Indonesia to Mexico.
Let's fast forward. How about now? What is coffee trade like today? Today, coffee export is valued at $19 billion per year, and more than 2 billion cups of coffee are consumed every single day. The market today is pretty much liberal, although there are only a handful of multinational trading companies that still control the bulk of commercial coffee grade. But with the emergence of the specialty coffee, things are changing. People are drinking and wanting to know more about the origins.Much like wine, coffee drinkers want to experience different fragrance, aroma and flavours.
They want to hear the stories like what you have just heard.
So let's talk about some production and consumption statistics here, which lead up to the second question: Which countries produce coffee? About 70 countries grow and sell coffee to the world.
They are shown in this map along what we call the coffee belt, the round the globe region between the tropics of Cancer and Capricorn. The Tropic of Capricorn can be found at Latitude 25, 23.5 degrees south. The Tropic of Cancer is at 23.5 degrees north. When we talk about coffee production
into this economy, we measured the contribution volume by millions of bags. And how big is the bag that we use for trade? One bag is exactly 60 kilograms in weight. It has raw green beans, coffee beans inside with average moisture content of 10–11%. To give you another perspective, each kilogram of green coffee beans comes from about seven kilograms of red ripe coffee cherries. Coffee cherries are the raw fruits which contain the seed or raw coffee beans. You need at least two adults
to carry one bag because it is very heavy and bulky. For UWC students, imagine carrying one of your parents to get the idea of how heavy those bags are. Countries such as Brazil, Vietnam, Colombia, Indonesian and Ethiopia produce about three quarters of coffee that we consume daily. And here's a map showing their relative contribution to the world supply in large circles.
Now we should discuss the third question: Which countries drink the most coffee? You'll be surprised. The top five countries are Finland, Netherlands, Sweden, Denmark and Norway. We measure them in this economy by average consumption in kilograms per capita per year. Hmm. What is interesting is that none of the countries mentioned has climate that is suitable for coffee growing. In fact, they are usually very cold and without much sunshine but they sure love their coffee.
Now the fourth question. How much coffee is produced and consumed today than, say, 50 years ago? Compared to 50 years ago Coffee consumption has gone up more than 100%. It has doubled, but unfortunately coffee production has not gone up at the same rate. Why is that? I will tell you in a moment. Let's dig a little deeper about who are actually involved in planting, growing and harvesting coffee in the producing countries. If you want to start your own coffee plantation, what do you need to do? You need to first prepare the soil. You also need to get the seedlings that are 18 months old and how many of the seedlings do you need. The young coffee plants are spaced in rows so that the density varies between 1, 200 and 1,800 plants per hectare. So that's about 500, 750 plants per acre. And then you have to wait at least three years before you can harvest it for the first time depending on the variety of the coffee shrubs. The amount of coffee you can harvest per hectare also varies depending on the climate and basically luck. The world average is about 500 kilograms of green beans per hectare. But in Vietnam you can get about one and a half tonnes per hectare through intensive fertilising and irrigation.
There are about 25 million coffee farmers who are involved in those activities globally, especially for smallholder farmers, the situation is not that easy. In Indonesia alone we have about one and a half million households that grow coffee, ranging from the island of Sumatra to Papua, covering the distance of about 5000 kilometres with varying microclimates and soil conditions. Where my company produces coffee in West Java Mountain we try our best to do our part towards the environmental, social and economic aspect of growing coffee. We grow coffee in between existing tall trees in the forest at 1300 metres above sea level with average temperature of 20 to 22 degrees Celsius. And from West Java, we export to countries like New Zealand, Singapore and Belgium.
And here we have Panthera, Pardus Melas or Javan Leopard or Macan Tutul Jawa. When you see the top predator like this in the mountain where you grow coffee, you should be happy because the food chain is kept in check. For coffee stakeholders the upstream sector or the farming side of the production is becoming increasingly complex and unpredictable. With a changing climate, giving rise to challenges such as flooding, drought, pest disease, mudslides and erosion. With the added strain of falling coffee prices many farmers struggle to make a living. If they cannot earn enough from coffee we will stop cultivating it and production will decline even further. I see those as opportunities rather than challenges, opportunities to do better.
Ageing farmer population is a very serious matter. The average age of smallholder farmers is about 55 years old in Southeast Asia it's close to 58. So not just in coffee, but the world. Farming population is growing older as young people increasingly choose city life. Who's going to grow our coffee and our food? As we need to get young people to learn about agriculture and the economy, I would like to tell you a story about my good friend in the Philippines, Cherrie Atilano. Her mission is to make farming sexy again. With more than 20 years of experience in agriculture. Cherrie believes the first thing to do is to make it profitable. She and her staff have developed a farm school called Alegria in Marinduque Islands. In the Philippines, teachers teach not only production technology, but also agropreneurship. She believes that once farmers feel they are entrepreneurs, they will take ownership to make their farm productive. She received the appointment of a United Nations nutrition ambassador recently and has been travelling around the world to educate young people about agriculture.
I cannot emphasise enough the reason why we have to focus our attention on improving the livelihood of all smallholder farmers. What do I mean by livelihood? It is a person's livelihood that refers to the means of securing the basic necessities of life. Livelihood is defined as a set of activities essential to everyday life that are conducted over one's lifespan, such as securing water, food, fodder
medicine, shelter and clothing. We can talk about conservation of forest in the spirit of sustainability.
We can talk about conservation of animals on land and at sea too. But we also have to talk about
the livelihood of the smallholder farmers, whose monthly income is only $300 per month for the whole family. The very least we can do as coffee producers is to pay them well and to buy the harvest at fair prices.
Another thing that we need to discuss is the bankability of smallholder farmers. For them to have access to finance, we have seen information technology companies and start-ups reaching out to them. Most of them are probably now known as FinTech. The percentage of smallholders with access to finance is equally difficult to quantify. According to estimates even promising approaches to expanding smallholder lending such as value chain finance are reaching fewer than 10% of smallholders. Primarily those in well established value chains dedicated to higher value cash crops like vanilla or nutmeg. Unfortunately, coffee is not considered as high value.
Development finance institutions in developing countries have been engaged for several years in learning efforts through diverse partnerships to obtain insights into the challenges of agricultural finance. The evidence of micro-finance, institution involvement in financing commercial and semi commercial smallholders remains anecdotal and lacks specifics on what makes lending to these segments feasible. This is still a work in progress indeed.
Let's talk about climate change. What can we do? By now, we all know about the climate change. And most of us believe that we only have about 30 years left before this situation gets out of control. But before I give you the bad news, I should give you one good news. You can now grow coffee in California, especially in Santa Barbara and San Diego counties. They don't produce much, but some of them are already entering the specialty coffee market in California. Enough of the good news. As climate change alters temperature and rainfall patterns the areas that were once suitable for growing coffee, which require a specific kind of climate, won't be suitable anymore. This is already starting to cause problems in coffee, such as in Mexico, in Chiapas, or Oaxaca, Veracruz and Puebla, where some farmers are switching to other crops that are less susceptible to the effects of climate change. Unless subject to price swings caused by market volatility. This act of switching reduces the supply of coffee,
which means that in the long run, prices will go up. We could even see coffee shortages in the near future.
It is now time for us to rethink the way we produce and consume and to rethink the way we collaborate to promote sustainable coffee across regions. Not only do we need to work on farmer training, but we also have to engage roasters and baristas in urban settings. We also have to keep telling the story to consumers. Let me give you one example of what we have done in Indonesia. Indonesia since 2014 the Sustainable Coffee Platform of Indonesia or SCOPI, has raised more than 50,000 smallholder farmers. It is a small number, which is nearly 5% of the total coffee smallholders across the archipelago. We trained them on safety and health, environmental best practices, farm management and cost optimisation, all under the national sustainability standards. I had the honour of serving SCOPI as one of the founding members and also as a treasurer. For several years I literally worked with SCOPI as the bean counter. Together with donors and partners from Europe and America we have also helped farmers with access to soil analysis, compost materials, and fertilisers. We were running with a limited budget of about $1 million per year and we managed to reach out to smallholders in 15 provinces with sustainability standards that we co-developed with experts from around the globe.
In other countries, there are also similar platforms that help smallholder farmers in the same way. We also shared best practices with platforms in Brazil, Colombia, Honduras, Kenya, Nicaragua, Peru, Tanzania, Uganda and Vietnam. It is an effort that is administered by the global coffee platform, which brings coffee producers, grocers, retailers, traders, governments, donors and NGOs together to multiply efforts. They collectively act on local issues and scale successful sustainability initiatives across the sector. By supporting coffee farmers to protect and increase their incomes we promote win-win solutions for businesses and society. So what moral and ethical values can we learn from sustainable coffee?
So I have spoken about the history of coffee, about the trade between nations, about the production and consumption, as well as how we are united to respond to climate change that is hurting the livelihood of coffee stakeholders. The biggest question I would like to ask myself is what are we learning from sustainable coffee? And is there something that coffee can bring that we can also apply to other commodities and products? We should talk about how we can align ourselves with the 17 Sustainable Development Goals or SDGs. As you know, there are 17 goals, and we also have to work on objectives and for the simplicity of our work in coffee we should focus on these three goals rather than trying to accommodate all of the goals and spreading thin.
So first, choose goal number eight, which is decent work and economic growth. This relates to the livelihood of smallholder farmers and the workers along the value chain. Second, choose goal number 15 – life on land. This relates to how we protect the ecosystem in the coffee growing areas.
Believe it or not, we would not have coffee today, if not for the bees. The bees ensure that the coffee shrubs produce flowers that turn into cherries for the beans that we roast and brew. Lastly, let's choose goal 17 – partnerships for the goals. You'd be happy to know that many companies, government and civil society organisations are already doing something. But there's a sense of urgency to do more. One of the big efforts right now is called the Sustainable Coffee Challenge.
It is a major new initiative to make coffee the world's first completely sustainable agricultural product. They do it by uniting all the players in the coffee sector, growers, traders, grocers and retailers to stimulate greater demand for and spark bigger investments in sustainable coffee.
Now it's time to reflect. I often feel like my small world of coffee business and sustainability advocacy has helped me to develop a stronger connection with the soil, the ecosystem and the things that are actually part of us. When I drink my coffee every morning, I'm always reminded of the landscape and the people who made it happen. When I share a cup with my international customers in my café, I see their eyes light up with joy and excitement. Knowing that the coffee that they are drinking has a real good story behind it. It is my hope that by speaking to the audience at this UWC Forum today, it could help to share my joy of learning. Together with you and the rest of the speakers for the forum I've expanded my circle of influence. I hope that it is now as big as the UWC community. In closing, for me the real work should be about learning and applying together with the global community of changemakers. Leadership is not about being the best. It is about making everyone else better. Thank you.
Kei: Hi, I'm Kei from Grade 8 at UWC Dover. I hope you'll like this presentation and many thanks to UWC IDEAS Hub for the use of the facility. Please enjoy the other sessions in the forum and learn together. Join my father at the networking session by clicking on the link on his programme page.