C.1. Expansion of the GVC as a driver of sustainable and inclusive growth Key sustainability challenges in the coffee sector remain…
As a result, coffee supply chains in many countries are characterized by high transaction costs, inefficient production and products with little value addition. In particular, smallholder coffee growers lack the capacity to invest in their coffee plantations, improve productivity of operations, and add value to their produce in order to be able to participate in the GVC (Figure C.1).
BOX C.1: Buyer-driven programme for promoting a sustainable coffee sector in Burundi Within the framework of promoting Public Private Partnerships, the ICO contributed to the design and monitoring of a programme to promote a sustainable coffee sector in Burundi, an active member of the Organization. The project aimed to improve the skills of smallholder coffee farmers in order to increase productivity and the quality of their coffee to generate profit and to improve their living standards and enable them to continue farming coffee as a profitable business and access the coffee Global Value Chain. The programme was driven by Sucafina, a leading trader, which set up the Kahawatu Foundation and appointed the project implementation team. The project with a budget of USD 1.6 million covered activities over four years (2014-2017), while pursuing fundraising. IFAD granted project offices to Kahawatu in Bujumbura. Since the project’s inception in March 2014, the foundation has secured funds from various partnership agreements targeting specific beneficiaries:
This is exacerbated by the coffee price crisis, as several years of low producer prices have eroded the economic viability of coffee production in many origins (ICO, 2019a). The covid-19 pandemic has put additional pressure on the sector. Even before the price crisis and the global pandemic producers in traditional coffee supply chains were challenged in adhering to the highest social and environmental standards, a situation that could worsen in view of economic pressures, resulting in detrimental social effects (such as higher prevalence of child labour or low wages) and impact on the environment (such as land degradation and depletion of natural resources). On the other hand, successful upgrading of on-farm operations or adoption of Good Agricultural Practices and standards by farmers may be insufficient to unlock the benefits related to the GVC. Finding niche markets for high-value outputs is essential. For instance, only a fraction of coffee produced according to specific quality and sustainability standards can be marketed as such, undermining the economic viability and sustainability of upgrading efforts made by producers in conventional coffee value chains (Panhuysen and Pierrot, 2018).
With the support from various partners, project implementation continues covering: • Providing good agricultural practices to farmers; • Establishing demonstration plots and farmer field schools; • Promoting coffee nurseries; • Planting improved varieties or replacing old trees; • Promoting environmentally friendly coffee farming; • Facilitating access to inputs (fertilizers, planting materials); • Promoting organic fertilization; • Building/strengthening the capacity of farmers’ organizations • Agri-business development • Community engagement • Youth and gender involvement in agriculture The Sucafina/Kahawatu model is being replicated in Rwanda and Uganda. The Kahawatu Foundation has been registered in Switzerland as a not-for-profit organization and is responsible for implementing sustainability projects on behalf of Sucafina SA. For more information, visit the Kahawatu foundation: www.kahawatu.org.
• USAID (USD 5.5 million) for 22, 500 beneficiaries • GIZ (477,200 Euros) for 14,000 beneficiaries • Nestle (USD 33,000) for 100 beneficiaries • Starbucks (USD32,000) for health insurance and medical equipments to 54,000 farmers • Catholic Relief Services (USD 500,000) for 4,000 beneficiaries.
THE VALUE OF COFFEE
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Part II: Section C
The coffee sectors in producing countries are often associated with various market failures, such as limited access to information about new technologies and stateof-the-art and climate-smart farming methods, market requirements or prices, lack of access to inputs required to produce high-value coffee products, lack of access to finance, and high transport and transaction costs to access output markets.
… exacerbated by the coffee price crisis and the covid-19 pandemic …
