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Meaning of economic sustainability in the coffee industry

What is the meaning of economic sustainability in the coffee industry? Economics is an important issue with far-reaching implications for all industries, not just the coffee industry. Economic sustainability will contribute to laying the bricks for the common sustainable foundation of the whole industry. 

 

Economic sustainability in coffee

 

There is a saying in the coffee industry: “Without a farm, there is no coffee”. No matter how great the passion, income is still necessary to ensure and maintain investment, business, and production. The profitability of the product will affect people’s lives and the product itself. If it does not bring good economic values, of course, it will not be invested for further development. On the contrary, if business profits are good, entrepreneurs will increasingly care about and promote quality to achieve greater things.

A successful farm economy is basically the fact that you spend money to produce coffee and get a decent profit.

Today, many people are interested and have a more objective view of coffee farming. When we start to learn, we all realize that coffee farmers, farmers are buckling on farms that do not guarantee basic conditions. This comes from the farmer’s own regime or partly because of the reason to ensure the conditions for growing coffee (altitude, climate, soil type,…). In addition, the stages to create finished coffee (preliminary processing, processing, transportation, roasting, grinding,…) also require a lot of resources, human resources,… Therefore, only receiving worthwhile profit is economic sustainability in coffee.

economic sustainability

Ensuring economic sustainability in coffee is a difficult problem, because coffee output and market are always fluctuating, with significant changes from season to season.

>>> The link between coffee price and sustainability

 

How to ensure economic sustainability in coffee?

 

Supporting farmers to improve their economy is seen as a lever for economic sustainability. The traditional thinking is that good output and quality will lead to good prices. But that is not the case. They will be governed by the market. Therefore, to ensure economic sustainability, these issues must be put in relation to social and environmental outcomes.

For example, growing coffee under the shade of a tree. This is a kind of model that benefits the ecosystem because it sequesters carbon, controls microclimate, biodiversity, soil health, nutrient cycling, water use, minimizes the use of agrochemicals. industry and associated pollution and runoff – as well as resistance to disease and pests.

But that leads to a problem that is limiting coffee production. As lower crop densities can lead to less coffee per hectare, cultivating coffee in the most environmentally beneficial ways can have unfortunate effects on financial returns at the local level. farm level.

But if coffee growing only focuses on output and ignores environmental issues, sooner or later it will be opposed and eliminated and boycotted. Of course, this will not solve the problem of economic sustainability in coffee.

economic sustainability

Therefore, the solution to the main problem is a harmonious balance of many factors from output, quality, price, market to environment and society.

>>> The price of Gesha coffee breaks records in Panama

 

Questions about economic sustainability in coffee

 

Economic sustainability is a difficult problem to solve. There are a lot of doubts surrounding it.

– If aiming to increase productivity and output, how will the related production costs increase? Calculating the sum of all offset costs and profits, is the business profitable or not?

– If certifications are part of a comprehensive sustainability strategy, what are the profits at the farm level? Is this considered an unpaid business expense or a paid added value?

– The premium for participating in the Voluntary Sustainability Program (VSS) should consider the producer’s cost of capital and opportunity cost, as well as the larger picture value of the ecosystem and social services. meet those requirements.

– What is the farm income level for your FOB contract (in other words, the salary paid at the farm level versus the cooperative level versus the export cost level)?

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