Bitter beans

The global coffee prices came down to a 30-year low in 2002. In recent months, however, the international coffee market has begun to recover, as reflected in higher international prices for coffee. But, the recovery has not led to an end of the coffee crisis. While there have been several analysis of the global coffee crisis in Latin America and Africa, this is one of the first efforts to understand the impact of the global coffee crisis in Indian coffee sector. The contribution of coffee in India’s gross domestic product (GDP) is small – a meagre 0.19 percent in 1994-95. However, it is much more important for the economies of the states in which it is grown. Coffee contributes between 3 to 4 percent of the GDP of Karnataka, the largest producing state of India. An estimated 5 million people, directly or indirectly, depend on coffee in the three southern states of Karnataka, Kerala and Tamil Nadu for their livelihood. There are 178,000 holdings in India, of which 98.4 percent are less than five hectares in size and falls under the category of small holdings as per the government’s definition. Indian coffee farmers, mostly poor smallholders, still sell their coffee beans for much less than they cost to produce. Small-scale coffee farmers and farm workers are still vulnerable to the coffee market’s price swings and the disproportionate market power of local buyers, international traders and multinational coffee companies. Such kind of an situation would lead to fall in the quality of coffee produced and, in the long run, would affect all the actors in the supply chain - a fact agreed by the Indian coffee traders and roasters as well. At the same time the challenge is to make the coffee market work for all and even if the global prices further improve. Improved social, environmental and economic practices of the stakeholders across the supply chain can lead to remunerative prices for small coffee growers and fair wages to the workers in one hand and better access to markets, reputational benefits, increased workers satisfaction and loyalty leading to increased productivity, increased savings through better environmental management and reduction of cost of production on the other. Partners in Change along with all its partners remained committed to this agenda. The present study conducted by Dr. Shatadru Chattopadhayay in collaboration with Koffie Coalitie, Netherlands is an in depth analysis of the impact of the global coffee crisis on all the coffee industry stakeholders in India and associated social, economic and environmental issues and concerns in the coffee producing states of Karnataka, Kerala and Tamil Nadu, India. The study was made possible through the active participation of different stakeholders including the small coffee growers, curing establishments, exporters, trade unions, civil society organizations and government agencies.