14. Sustainable Connections - MSU and COSA

December 30, 2014
 As this year winds down, I'm optimistic about the increasing recognition non-profits in the coffee sector are giving to academic institutions. In particular, I've learned over the past 12 months of the collaborations -- past and potentially in the future -- between Michigan State University (MSU) and the Committee on Sustainability Assessment (COSA).

In early 2014 when COSA released its "Measuring Sustainability Report" I noticed MSU's Dr. Larry Busch is on the scientific advisory committee. Dr. Bush is MSU's Distinguished Professor Sociology and Director, Institute for Food and Agricultural Standards. He is well-traveled and has researched standards in many different food supply chains. In a conversation I had with Dr. Busch in June this year, he praised COSA for their boldness in accomplishing 20,000 farmer surveys since the start of their assessment program -- truly an unprecedented number for a single survey and these were done across 16 countries.

COSA builds its work on the same basics of scientific research that are the hallmark of MSU's research groups. MSU has been conducting impact assessments in remote rural areas on the African continent for decades. Researchers such as Dr. Dan Clay (Department of Community Sustainability) bring their high-level knowledge of survey design to cash-crop value chain work, including coffee, as evidenced by projects like USAID's PEARL project in Rwanda (2002-2007) and BAP in Burundi (2008 - 2013). Others, like Dr. Mywish Maredia (International Development Agricultural, Food, and Resource Economics) have recently designed randomized control studies to assess impacts of programs in Rwanda, Lesotho and Burkino Faso. Dr. Murari Suvedi (Department of Community Sustainability) is another senior researcher who is especially well-known in Asia (Cambodia, Japan, Nepal, to name a few) for his expertise in impact evaluation.

Like COSA, Michigan State University is known for its ability to implement scientific rigor pragmatically, especially for business. Its MBA program at the Broad School of Business has been ranked #2 (after MIT) by U.S. News and World Report for Supply Chain studies. MBAs at MSU can take courses in "Sustainable Supply Chains" and "Measuring Socio-Economic Well-being."

In a year-end greeting, COSA's Danielle Giovanucci writes with optimism about "our culture of collaboration bridging diverse points of view to ignite dialogue and cooperation to address [the complex challenges of agricultural sustainability]." Given COSA's proven record for collaboration and MSU's depth of expertise in assessment, sustainability and smallholder agriculture in developing countries -- one can certainly see this partnership growing in 2015!

13. Sustainability with a Market Focus = Resiliency

July 17, 2014

Chad Trewick is a coffee industry veteran, who among his many experiences, can also say he helped one of the U.S.'s largest retail coffee chains commit to sourcing 100% certified coffee. Chad helped Caribou Coffee (now owned by Peet's) to convert to sourcing 100% of their coffee from sustainability label, Rainforest Alliance.

In a thoughtful article, Trewick recently wrote in detail about the need for the coffee industry to embrace more sophistication in terms of understanding production costs and utilizing finance tools like hedging. Here's the link:
http://dailycoffeenews.com/2014/05/23/sustainable-values-combined-with-market-tools-a-future-for-specialty-coffee/

For me, Trewick's comments reflect the 'coming of age' of many people in specialty coffee. There have always been those in the coffee industry who understand the importance of production economics and financial trading tools like hedging. Nestle, P&G and Kraft no doubt have decades of data and experience in these areas. But these companies are considered the 'old boys' and specialty coffee, as it came on the scene in the 1990s, has a lot of individuals who think of themselves as trading coffee in a new and different way..

I think part of what Chad is saying is, while specialty coffee can be different (for example, 100% certified Rainforest Alliance), certain market fundamentals are still the same.

Here are some of the quotes from Chad's piece that I appreciate the most:

[We have] relatively little understanding of the true economics of coffee production...we lack critical information, making it seem impossible to pay a price based on production economics that would ensure an ongoing supply of green coffee and support the livelihoods at the start of our supply chain.

...without accurate information on which to base important business-guiding decisions, the industry’s purchasing behaviors have struggled to evolve.

So, what do we do? We need to pursue two simultaneous strategies.
1. Prioritize the gathering of information about coffee production economics. We need a meaningful and validated study of the economics of coffee production coming from various key origins and, further, the regions within those origins. [Certainly Trewick means to say "studies" not "study", as one study cannot suffice.]

2. Use financial hedging tools to help manage the increasing volatility of the green coffee market.
And... use what tools we can (including financial literacy training for farmers) to create more economic resilience.

The angle Chad takes on all this praise for the value of economic research and financial managment tools is that these approaches will be more long-lasting, more enduring, more sustainable, than charity. Trewick's words again: "there is much more we can do to improve the economic resilience of our entire value chain by using the tools the market has to offer."

"Here, here!" say I, and I believe, many coffee farmers throughout the world would agree.

12. $23 million Coffee Farmer Resilience Initiative

June 21, 2014
Coffee leaf rust is a one of the coffee industry's best examples of the need for building resilience. It is the result of 'traditional' pests and problems, made worse by climate change. There is hope for a bright side to this problem which is threatening the survival of 400,000 smallholder coffee farmers in Mexico, Central and South America. Maybe with the attention this 'natural disaster' is bringing, some of the long-standing, intractable problems like food security, income diversification and insufficient research on coffee plant pathology will be addressed, along with addressing the acute pain of the current situation.

News about the $23 million Coffee Farmer Resilience Initiatve is one reason to have this hope. Watch this video to hear Rajiv Shah, head of USAID, discuss the initiative:
https://www.youtube.com/watch?utm_content=6215193&utm_medium=social&utm_source=linkedin&v=sEJ1rC72FOs

And to learn even more, I refer you to Root Capital's blog of May 28, 2014:  Click here.

Photo credit: Root Capital

11. Barack Back in Town

April 3, 2014 - Ann Arbor, Michigan

Source: MLive Michigan - Jessica Webster

Barack was back in my home town of Ann Arbor yesterday (April 2nd). I think he felt obligated because on his last trip to Michigan in February, he was only able to go to East Lansing and visit Michigan State University's campus. That trip was to make an announcement about the breakthrough legislation on the Farm Bill which Michigan's senator Debbie Stabenow masterfully guided through to approval. A win for farmers!

Source: MLive Michigan - Jessica Webster

Barack's trip yesterday was to highlight the need to raise the minimum wage in the USA. Why Ann Arbor? One is the fact we're a city on the leading edge of paying living ages. The Ann Arbor city council requires that all companies it does business with pay their employees, at minimum, a living wage, which is currently defined as $12.52 an hour for employers who pay health care and $13.96 an hour for employers that do not provide health care. [Source: MLive, click here.]

The president' push to raise the federal minimum wage to $10.10 an hour aligns with a campaign for a statewide ballot initiative to increase the minimum wage in Michigan to the same amount. Michigan last increased its minimum wage to $7.40 per hour in 2008. It is among 21 states with a minimum wage above the federal level of $7.25. [Source: MLive, click here.]

But the other reason Barack had to visit Ann Arbor is Zingerman's Deli -- A. for the Reuben, and B. because Zingerman's co-owner, Paul Saginaw, has been to capital hill for talks with congress on how and why to increase the minimum wage. Read this great story of what it was like to be at Zingerman's for lunch yesterday: click here. Personally, I was within in minutes of being there myself, if I had only known! I was racing in my car from Michigan State to the University of Michigan, trying to make it to a 2pm meeting at UofM, so I was on main street while the President was one block away at Zingerman's. I wondered what all the police cars were for....

There are also two reasons all of this relates to coffee. A. paying the workers who grow coffee is important also. The countries they live in usually don't have a Barack Obama for a leader. Some have better -- the U.S. could learn a few things from Costa Rica in my opinion. But most have nothing even close. Voices of dissent are quickly snuffed out. Also, this is a place to clarify that the definition of "workers who grow coffee" includes both smallholder farmers, like those in Rwanda and Burundi, and the hired workers that many in the industry are trying to support through organizing, fair trade programs, etc.  It also includes employees at washing stations and in dry mills. It's a broad, diverse, important labor force that deserves to be compensated with a living wage.  

B. paying the workers who skillfully prepare coffee and serve consumers matters. That's what Paul Saginaw does and that's what the partners of Zingerman's Coffee Company do. They don't do it to be charitable. They do it because it's good business. I don't know if they pay baristas the Ann Arbor City Council's standard of $12.52/hr. But I do know for a fact, that Zingerman's employees are treated with respect and given ample opportunities and support to get training. Trained workers, who are treated with respect, are loyal workers. They also tend to be innovative and become problem solvers, not complainers.

With the issues facing coffee at origin, does anyone think we might need the workers in the fields and at the washing stations to be innovative problem solvers? If there is no President Obama or U.S. Congress to pass laws to help coffee businesses in Mexico, Colombia, Vietnam, Brazil and elsewhere operate at the level needed for the 21st century, it obviously remains to those of us in the coffee industry to simply do the right thing -- for business reasons.

10. Rust to Resilience in Nicaragua

Feb 22, 2014
This CRS Coffeelands post is a beautiful verfication of the importance of the kinds of resilience Artisan Coffee Imports and many others in the resilience "camp" seek to encourage and actively support.
http://coffeelands.crs.org/2014/02/391-coffee-leaf-rust-update-nicaragua/

This report from Michael Sheridan and others at Catholic Relief Services (CRS) of the worsening situation for coffee producers in Nicaragua gives a good "360 degree" look at the situation. It's not just the crisis of the coffee-leaf-rust disease, as bad as that is, it's also the problem of 'customer concentration', to borrow a term from manufacturing. With 94% of income coming from coffee, these business people suffer from classic 'one customer, one market' issues. And the lack of crop diversity also reduces food security and dietary diversity.  And it's the problem of low coffee prices. And it's the problem of low productivity per hectare planted with coffee, which reduces income from coffee even when prices are good. And, and, and...

"Whole Farm/Household Livelihood Strategies"
Just when we are overwhelmed with the number and complexity of the problems for Nicaragua's coffee producing communities, Sheridan pulls us back from despair. He names the significant efforts in the past and on-going that are addressing root causes, such as tree renovation programs with disease-resistant plants, long term improvement of natural resources and programs financing crop diversity and kitchen gardens. His parting sentence is the most uplifting and is the point where all of us working on resiliency can heartily join forces with CRS:
 
"we believe that we need to look closely at the coffee production system ... and other sources of income and to develop whole farm/household livelihood strategies that provide sustainable relief for the poverty and vulnerability of these producers."

Here we see the door is open for the ways human ingenuity can help tackle the severe challenges presented by nature and past human errors and mistakes. By feeding the stomachs and the minds of the individuals living and working in Nicaragua, we are sure to find paths of innovation that are sustainable-over-the-long-term.

9. Three New Sustainability Tools

Feb. 7, 2014

Last week three new reports on measuring sustainability were released. All of them are interesting and relevant for the coffee industry:
1. "Measuring Sustainability" report from COSA, the Committee on Sustainability Assessment.
2. State of Sustainability Initiatives (SSI) Review, from SSI, the Sustainable Commodity Initiative (SCI) which is a joint initiative managed by the International Institute for Sustainable Development (IISD) and the United Nations Conference on Trade and Development (UNCTAD).
3. Root Capital's Social & Enviromental Due Diligence Issue Brief

Here are the websites where you can download the reports.
State of Sustainability Initiatives: http://www.sustainablecommodities.org/ssi/background

COSA Measuring Sustainability: http://thecosa.org/communications/our-publications/

Social & Environmental Due Diligence: http://blog.rootcapital.org/back-roads-to-boardrooms/root-capital-launches-issue-brief-series
This "Issue Brief" is especially interesting because they've also publicized the corresponding "detailed methodology", the "social scorecard" and the "environmental scorecard."

8. Impact of Microlot Premiums - new research published

Jan. 27, 2014
The "microlots" topic hits several issues that are extremely relevant to resiliency in coffee.  So it is significant that today, Counter Culture Coffee posted Phase II of their research to understand the impact of microlots.

Click here to read their helpful introduction to this phase of the project and click here to see the full report, also posted on Artisan Coffee Imports website. Artisan Coffee Imports assisted with the analysis of the data collected in this phase of their project -- a wonderful collaboration that provided learning for all sides.

Resiliency issues, and reasons why this type of research is important are:
"Direct Traders" claim they are benefiting producers, they even claim they are benefiting producers more than the Fair Trade system. Is there evidence to support it? Do all "direct traders" operate the same way?

Resiliency has to do with bio-diversity. Are there ways incentive systems, like those employed by Virmax and discussed in this report, can be used to encourage bio-diversity and thereby improve producers ability to absorb shocks?

Research issues also came to light with this report:
1. A pilot run of the questionnaire, or even several pilots run with producers could help fine tune the questions. Also, the pilot data (both quantitative and qualitative) could have been assembled so that it was clear which types of analysis the full data (once collected) would enable.

2.  A control group or baseline data would help to verify that the impacts and benefits of the microlot program can be attributed to the microlot program.

3. Cupping data collected on all the coffee included in the study (microlot and the control group) would enable more conclusive insights one which growing practices may be having an impact.


Going Further and Farther With This Research:
There is much more that can be done with the data Counter Culture has collected. Even more could be done if Virmax continues to collaborate and find value in understanding which of their innovative processes are doing the most to improve producer livelihoods. The following are questions that could be pursued in phase III:

Does paying microlot premiums increase the volume (quantity) of 86+ coffee produced in a region? Another way to ask this question is, 'at what level of premium payment, does the premium actually change a producer's decisions on the quantity vs. quality trade-off?'


Does paying incrementally higher premiums for incrementally higher scoring coffees impact the average cup quality of all coffees receiving microlot premiums in a given region? In other words, does a roaster's investment in incentive programs actually "pay off" in terms of creating more higher quality coffees than would otherwise be the case?

Add controls for exogenous factors that occurred over the three years of this study -- price volatility, Federation policies to encourage planting Colombia varieties, etc.

We will look at more of these types of questions in the upcoming blogs.







 

7. How Artisan Got Involved in Counter Culture's Research Project

Jan. 22, 2014

I was honored to be allowed to work with Counter CultureCoffee (CCC) to analyze the data in their study, "Impact of Microlot Premiums on Smallholder Coffee Producers in Southern Colombia: How Premiums Are Invested and Farming Practices Employed." As a coffee importer (www.ArtisanCoffeeImports.com) and a master’s student studying sustainable development for coffee communities (www.csus.msu.edu/), studying the impact of any program designed to benefit coffee producers would be of interest. This one was extra tantalizing for a few reasons:

 

1. I had not yet seen any research on the impact of microlot premiums using parametric (i.e. numerical) data, so this seemed to be ground-breaking. 

2. I myself was very curious to see some rigorous analysis of the assumption that “paying more helps the producers.” When Kim Elena Ionescu lead the roundtable discussion at the Roasters Guild Retreat in August 2013 on “microlot myths”, it was frustrating to me that research results in that workshop were so vague compared to the next workshop. In the following workshop, SCAA’s “coffee scientist” spent two hours walking us through her randomly controlled trial experiments to test the effects of roast degree on coffee taste. My interest was to see impacts on producers investigated with the same care and validity, and here was an opportunity to be part of helping that happen. 

3. The research combined quantitative and qualitative methods in a way that, in my experience so far as a development economist, is rare. However, qualitative research has come a long way in the 20 years since I studied for my first masters degree (in international development). So I was curious to see how the combination could work.

 

4. The data was already collected, cleaned and formatted. It was just waiting in spreadsheets to be analyzed. In other words, much of the hard work of primary research was already accomplished. This meant getting the work into a final report was realistically doable – even within the three month timeframe it would need to be, to fulfill the criteria of a final paper for one of my classes. In other words, timing was perfect.

5. The study was done with a participatory mindset. From the outset, CCC promised to share the results with the producers who participated in the survey. They made good on that promise. This week (as I write), Hannah Popish (from CCC in North Carolina) is in Colombia presenting the findings to the growers in Huila, Cauca and Tolima. And it's not just presenting, it's visiting. Each meeting includes small groups and the intention is to learn as much as it is to share the research results so far.

6. I said at the beginning of the blog I was 'honored' to work with CCC. That deserves an explanation. For me it's an honor because I admire CCC's boldness in reaching for and developing resiliency. They have been instrumental in developing direct trade relationships in Burundi and now Democratic Republic of Congo. Now I learn Tim Hill has worked on iterations of cupping forms to find a method that will more effectively help him communicate with producers about growing quality coffee. I believe CCC is on the Collaboration for Food Security Council and now participating in an innovative collaboration between Food for Farmers, Root Capital and Green Mountain Coffee Roasters to bring focus and resources to battling leaf rust in Latin America. I understand they will also support the 2014 Potato Taste Conference in Kigali, Rwanda. I could go on, but I'll just say that they also have great  coffee. Try some!

7. In case you feel like this is getting to be a bit too boring, reading about the great things CCC has done, don't worry. My critical side will include them, too. Stay tuned...

6. The Value of Participatory, Qualitative Research for Coffee

Jan. 13, 2014
How would you define research? Something about uncovering truth? Finding new knowledge? My off-the-cuff definition is, "a systematic process for uncovering new knowledge." As I've re-entered the world of graduate school this past fall, I've been refreshed to see an appreciation of how valuable qualitative and participatory research can be. It seems I'm not the only economist trained during the 80s and 90s who decided that to really understand what happens in developing countries, we need more than predictive econometric models that come close to being randomly controlled trials.

Quantitative methods are important, but they can be more effective when combined with the insights one gets from open-ended questions and in-depth interviews. Ethnography and exploratory study has taken on new levels of competence and value in the world of market research and academic investigations.  What is particularly relevant to coffee are the ways in which we are including interviews and discussions with producers themselves. We are placing more value on the opportunities to talk with the people who have generations of knowledge about growing coffee and about the places, the environments and the cultures which surround and support their coffee-growing places.

Example and case in point -- the microlots research on which Counter Culture Coffee and Virmax have collaborated was designed from the ground up to include, not just limited choice type questions, but open ended questions also. (Get a preview of the upcoming study here.) The study is being done with a participatory approach to the extent that the results of the work are being presented and shared with all 122 producers who were surveyed back in January 2013. That, in and of itself, is a "research step" that is too often forgotten. Do we share the results of our research with those who contributed to making the research possible? It may not always be desirable or feasible, but I would suggest that in most cases where it involves coffee producers, it could be extremely valuable.

It seems so easy and so logical, but I think this is a relatively new phenomena: this effort to more comprehensively integrate the things we, as actors at one end of the coffee supply chain, know, with the knowledge producers and other actors at origin have. Qualitative and participatory research can help us get closer to an understanding of where solutions may lie.

5. Testing the Impact of Cherry Red Bracelets

Jan. 11, 2014

When I read about Portland Roasting's red bracelets, I was so excited. Michael Sheridan, Director of the Borderlands Coffee Project for Catholic Relief Services, seemed energized, too. Thus he was the one to write about it in his CRS Coffeelands blog. 

The bracelets, intended to be worn by people picking coffee to help them remember to only select the ripe ones, are a perfect example of appropriate technology for coffee. So I wrote to my friend Mark Stell (president and founder of Portland Roasting) and arranged to have a few of these cherry red beauties sent to Artisan Coffee Imports. Collaborating with Mario Serracin, agronomist for Rogers' Family Coffee in Rwanda, a plan for a controlled test has been hatched.

Background: a critical issue for the quality (and therefore price) at the farm is to pick only the ripe cherries (which are red, like the bracelet). For example, grassy off-flavors are often caused by harvesting under-ripe beans.

Basic test design: test bracelets vs. no bracelets

Hypothesis: if the bracelets are used by one group of pickers and not by another group of pickers harvesting at the same farm, (just a slightly different area), tests of the sugar content of the coffee liqueur will shower higher sugar concentration in the lots picked by pickers-with-bracelets.

Artisan will bring bracelets to Mario in Rwanda in March. Watch this space for results!

4. What is Good Research?

Jan. 9, 2014
The professor in one of my graduate classes at Michigan State University yesterday offered this list to help evaluate "what is good research." This was of extreme interest to me, having just been in the trenches of field data analysis with Counter Culture Coffee. Artisan Coffee Imports assisted in the final phases of research on the topic of "the impact of microlot premiums for coffee producers in Colombia". I am happy to share that I believe Counter Culture's forthcoming report will score relatively high marks on most of these seven points. My comments shed light on the ones that can be difficult or may be less applicable in some cases. Counter Culture's project is a great illustration of #7: good research points the way to doing even better research in the future.

Good research:
1. Is based on the work of others. (Difficult to do as a business with little time for conducting literature reviews. Employ an intern to help.)

2. Can be replicated. (Thus it is important to document both the methods of data collection and the methods of analysis.)

3. Is generalizable to other settings. (This is true for quantitative research. Often qualitative research and assessments are not as concerned with generalizing to a larger population.)

4. Not done in intellectual isolation.
5. Is doable (scope is not so vast the research is never complete.)
6. Is apolitical.
7. Research is on-going (always generates new questions.)

3. Counter Culture Talks About How to "Just Do It"

Jan. 8, 2014
Counter Culture Coffee has shared some insights with the coffee industry on the study they've conducted at origin, with producers in three Colombian states (Huila, Cauca and Tolima) to better understand the impact of microlot premiums. Artisan Coffee Imports has been very excited to be a part of this project. It's refreshing to see a direct-trade roaster decide to investigate carefully the assumptions many have about the benefits producers are receiving when we pay higher prices for coffee.

This is a YouTube video of the Google-hangout Counter Culture hosted earlier today. It runs a full hour:
 http://www.youtube.com/watch?v=Yo9iXJ_9jTA

2. Resiliency - What is That?

Jan. 7, 2014
Resilience - this concept that is becoming a new anthem in economic development seems particularly relevant to specialty coffee. Within the world of coffee, it seems particularly relevant to coffee producers. It is the idea that life is full of surprises -- sometimes ones we can manage, but sometimes they can be devastating. (See the book by Walker & Salt, ResilienceThinking, 2006.)

Ben Corey-Moran, Director of Coffee Supply at Fair Trade USA, talks about the "Materia Gris," or "grey matter" that is the focus for COMSA, an innovative cooperative in western Honduras. His description of COMSA's values as an organization captures well what we mean by "resilience" and capacity building in coffee in this blog. (See the shortarticle in the on-line journal, Daily Coffee News, published by Roast magazine on Oct. 28, 2013). This was just before the start of "Let's Talk Roya" in El Salvador. COMSA is living relatively free of the devastating La Roya pest plaguing their neighbors and much of South and Central America. The coop's leadership attributes their situation to the cooperative's long-term focus (already in place for years, it seems) on "5 Ms": microorganismos (micro-organisms), materia organica (organic material), minerales (minerals), moleculas vivas (amino acids & proteins), and materia gris (grey matter—i.e., brains).

“The fifth M is the most important,” says Neri Gonzalez, COMSA’s chief agronomist. “It’s our creativity, ingenuity, and inventiveness that allows us to create and evolve these technologies to serve our needs.” COMSA is thus a great illustration of resilience in coffee. The coop seems to blatantly recognize that challenges, large and small, will never end in coffee farming.  So the best way to face them is with confidence in the producer's ability to adapt and innovate in sustainable ways, and with systematic processes to help the soil be as healthy as it can be. Combined, the coffee producer has resilience to withstand the onslaught of diseases and other stresses (often weather related).