Coffee farm economics | Hacker News Reader

Coffee farm economics

baristaguildofeurope.com

50 pointsDylanfm4 comments

Interesting article, though the final graph and analysis is a bit goofy. He arbitrarily fixed the price of specialty coffee, and then asserted that specialty coffee allows more stability. Well yeah, if you magically remove a major source of variability then of course things are more stable.

In reality the larger margin on specialty coffee should provide the farmer with more breathing room. But I doubt that it's the sure thing he's made it out to be.

"For the purposes of these numbers I’m not taking into account ‘differentials’"

Contracts based on a differential against the C price is how most specialty coffee is purchased. Leaving them out makes an already fairly hand-wavy analysis less than useful.

I'm interested if you might have some alternate analyses that I might read. Especially if they are less handwavy but reasonably approachable.

I don't, but here's a few articles that may be of interest:

http://dcn.trappinteractive.com/2014/07/29/direct-trade-myth...

"Vega says that while farmers are paid less than $1 a pound for their coffee, specialty coffee companies are selling their coffee for upwards of $20 a pound. This is, unfortunately, not exactly true, because it actually gets a whole lot worse."

http://coffeelands.crs.org/2013/11/372-is-the-coffee-busines...

"But price is only one of the ills ailing the coffee business. There is a long list of other challenges at origin that we know about–limited farmer organization for the market, low productivity, low quality, rising input costs, limited access to agronomic and financial services, limited investment in research, diseases like CLR, gradual loss of coffee suitability due to climate change, seasonal hunger in coffee communities, etc. And there are, most likely, other challenges at origin we don’t yet fully comprehend."

http://dcn.trappinteractive.com/2014/04/25/its-the-market-st...

"In my experience, growers tend to share the market’s rewards for high-quality coffee with roasters but bear the risks of quality-oriented production alone."

"I have written extensively about this issue here in the context of our work in Colombia, where farmers who believe that the Caturra variety produces higher quality in the cup are replacing it anyway with the higher-yielding, disease-resistant Castillo hybrid. Why? Because even as the market tells them it wants Caturra, it is not paying them enough to compensate for the added risk associated with traditional varieties that are susceptible to coffee leaf rust and other diseases."

Reply on news.ycombinator.com