Andrew Bovarnick, Lead Natural Resource Economist, United Nations Development Programme (UNDP)

Interviewed by Leif Pedersen, Rainforest Alliance

“Sustainable coffee can not only have a direct impact at the farm level, but can change entire landscapes in coffee producing countries, and in turn complement national systems of protected areas.”

The United Nations Development Program (UNDP) is the UN’s global development network. With a presence in 166 countries, the UNDP works with governments and communities to improve the lives of the world’s poor. The Global Environment Facility (GEF) is an intergovernmental institution that helps developing countries in their work to protect the global environment. The GEF is financed by the world’s donor countries and is the largest financier of environmental projects in the developing world. The GEF is currently co-financing a $12 million project, implemented through the UNDP and executed by the Rainforest Alliance, called “Biodiversity Conservation in Coffee: Transforming Productive Practices in the Coffee Sector by Increasing Market Demand for Certified Sustainable Coffee.” Here, Andrew Bovarnick, UNDP’s Lead Natural Resource Economist, discusses the environmental and economic importance of sustainable coffee.

Question: Why is sustainable coffee so important?

Bovarnick: Sustainable coffee is important at a variety of levels and is a critical component of managing the global environment. Many farms look to improve profitability through intensification, high use of fertilizers and pesticides, poor worker wages, and no consideration to the education and health of their workforce. These practices can yield higher short-term returns but lead to the loss of biodiversity-rich habitats, water pollution, soil erosion, and dependency on agro-chemicals, which low-income farmers cannot afford. The world cannot sustain such practices and impacts. Sustainable coffee farms, in my view, grow coffee in a manner that reduces environmental damage, supports farmers and the welfare of workers, and also contributes to landscape conservation by growing coffee trees in mixed agro-forestry systems to provide habitat for flora and fauna that are found in natural forest habitats and historically on sustainable coffee farms. Such diversified farming systems also permit farmers to generate income streams from various sources, reducing their economic dependency on coffee and therefore make the farms more sustainable, particularly when the volatile commodity market takes a down turn.

What makes sustainable coffee farming a practice of global importance is that not only can farm practices make a major difference to the on-farm environment, but as coffee is such a major global commodity, being grown by more than 25 million farmers, the on-farm environmental benefits can have global benefits. There are two further major benefits due to the nature of coffee production. The majority of coffee farmers are small land owners, with only a couple of hectares of farm to their name, so improving farm economic sustainability will have a major positive social impact in predominantly poor rural areas.

Secondly, coffee is grown in some of the most biodiverse and most threatened ecosystems in the world. For example, in Central America, a key coffee growing region, there are approximately 17,000 plant species, of which almost 3,000 are endemic to the region. The forests of the region harbor over 1,000 bird species, of which more than 200 are endemic and some 450 species of mammals, of which 65 are endemic. These include the endangered quetzal (Pharomachrus mocinno) and the Central American spider monkey (Ateles geoffroyi). In this age of ecosystem collapse and because of climate change, the ability of productive landscapes to provide a haven for wildlife and increase their mobility between protected areas becomes even more critical. So sustainable coffee can not only have a direct impact at the farm level, but perhaps more importantly and strategically, sustainable coffee can change entire landscapes in coffee producing countries, and in turn complement national systems of protected areas. But this requires a convergence of markets, planning, on-farm management, and technical support, which is what we need to work towards.

At a general level, coffee is a high profile consumer product that can act as a direct link between a consumer and a producer. Consumers around the world buy products every day without being aware of the implications of their actions and purchasing decisions. The nature of commodities markets mean that consumers are detached from the reality of what goes into making a product such as a cup of coffee. But as coffee is a high profile consumer product, drunk on a daily basis, it provides an amazing opportunity to educate consumers about their links to production of natural products and to realize that we are all connected, not only to coffee but all natural resource based goods. So by promoting sustainable coffee we have an opportunity to transform the way global markets work and take into account the global environment, which is a key goal of the UNDP.

Q: Do consumers really care?

Bovarnick: Some do, but unfortunately the majority of consumers around the world are still not aware that the coffee they buy can be grown and produced in different ways and that their purchasing decisions create ripples down the supply chain. Most consumers still focus on their needs for price, quality, and flavor and don’t make the immediate connection to the coffee farmers growing their beans on the mountain slopes of Guatemala or the cerrado of Brazil.

However, with modern information technology and a rapidly shrinking world, opportunities are opening up to educate consumers about their links to coffee producing regions. Additionally, sustainable coffee is already a market niche and a specialty product, so when consumers do care there is an opportunity to supply them with sustainable coffee. The challenge is to broaden this base of interested consumers and influence global markets to bring about global change and all the benefits outlined above.

Q: What can the coffee industry do to help?

Bovarnick: Companies have a special opportunity to make a substantial contribution to the global environment through purchasing and selling sustainable coffee and linking consumers to the way the coffee is produced. Because of the way coffee is consumed — in cups, on a daily basis — messaging on bags, cups, and in coffee stores can reach millions of people and can educate them about the biodiversity and workers behind their cup of coffee. Companies that fulfill this opportunity demonstrate real corporate social responsibility and it is incredibly impressive how many companies are already taking a lead in bringing the message to their clients. From airplanes to coffee houses, supermarket shelves, and TV ads, the message about sustainable coffee is beginning to get out. However, there is much more to be done and every company can do their part. In turn, having purchasing policies for large volumes of coffee can influence farmer’s decisions about how they grow coffee and treat their workers. The market is sending positive signals to improve production, which is tremendously powerful and rewarding. Basically, companies can influence change across the whole coffee supply chain. In turn, companies can assure a sustainable supply, reduce risks, improve their reputation, and secure new consumer niche markets.

Q: Should coffee farmers be concerned with sustainability?

Bovarnick: Demonstrating the benefits of sustainable coffee with solid economic and environmental data is complex. First, you need to define what is meant by sustainable coffee. Most sustainable practices such as integrated pest management, soil management, protection of water sources, dignified worker wages, and healthcare and safety can lead to benefits for the farmer. Better paid and educated workers can often improve the quality of processed beans and hence the beans can be sold at a premium price. Leaf litter and shade can enhance soil fertility and plant growth which reduces costs for agro-chemicals. However, there are trade-offs as more shade cover can also limit coffee yields. If that shade is produced by commercial timber and fruit trees, farmers can generate additional and diversified income and reduces risk as they are less dependant on volatile global commodities markets. Determining the optimum tree composition and agro-chemical use on coffee farms is difficult, and more data will be useful.

In addition to optimization of farm yields, there are other ways farmers can improve their incomes through sustainable practices. Buyers reward sustainable farmers by paying premiums, establishing preferential purchasing programs, or by offering long-term fixed volume purchasing contracts. These can certainly make sustainability more rewarding for farmers.

Q: Why have the UNDP and the GEF chosen to support the Rainforest Alliance’s coffee program?

Bovarnick: The Rainforest Alliance’s certification system is a good example of a market-based tool that promotes conservation and sustainability. At a farm level, the Rainforest Alliance and its partners in the Sustainable Agriculture Network have developed criteria for coffee farming which conserves biodiversity and improves local people’s lives while also helping farmers compete in international markets. Out of all the coffee certification schemes, Rainforest Alliance certification is the most biodiversity and environmentally focused. At the market level, the use of certification to brand products as sustainable is critical in the effort to increase consumer awareness about production methods. At the industry level, the Rainforest Alliance’s certification program has been designed to appeal to companies, which is critical for its acceptance and adoption. The Rainforest Alliance’s strong relationships with companies are an asset to the UNDP and GEF as we understand that the promotion of sustainable coffee can only occur with corporate participation and support.

There has already been a lot of activity by farmers and companies to produce and sell sustainable coffee, and now is the time to scale-up the production and sale of Rainforest Alliance Certified coffee so it becomes a globally recognized and traded commodity. Institutional capacity is needed to support and manage this growth, and the UNDP saw a strategic use of its resources to help increase global demand for Rainforest Alliance Certified coffee.

Q: What do you see as the next stage for increasing global consumption of sustainable coffee?

Bovarnick: We are certainly at the right time to be thinking about this and strategizing a way forward. We need to institutionalize the concept and practices of sustainable coffee in national governments, farmer and coffee associations, donors, NGOs, and consumers so that we can scale up the production, quality, and sale of sustainable coffee. This involves increasing in–country support to coffee farmers, both technical and financial. On the financial side, we need partnerships with microfinance institutions to deliver timely and affordable credit to farmers who wish to change and improve their practices. The market also needs to reward coffee farmers for sustainable practices which yields the global benefits already mentioned. Rainforest Alliance certification has traditionally yielded premium prices, but as certification becomes more mainstream these prices may fall.

Carbon sequestration is already taking off as a service from which farmers may benefit, but we must continue to demonstrate and secure payments for water, soil, biodiversity, and microclimate benefits. These payments can then generate the additional technical assistance the farmers urgently need. There is also a need to support the development of small local businesses, such as tree nurseries, so the local economies themselves can provide services to farmers and reduce dependency on donors and the government. This means creating profitable advisory services which farmers pay for, perhaps initially financed through subsidized credit, to support them until the training yields economic benefits. The demand for support is out there, we just need to help create these local sustainable rural economies. This development needs to be tied to lower costs for small-holder certification, coordination with other certification schemes, and robust measurement of on-farm benefits. On the marketing side, advertising and media attention to sustainable coffee must be increased, and therefore it is critical to increase partnerships with companies that can dedicate marketing teams and campaigns that link farmers and sustainable farming practices to the consumers. The future for sustainable coffee is looking better, but we need to be creative and continue to build global capacity so we can ensure the sustainability of coffee for future generations.

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