Coffee Works

Coffee plant

This is coffee when it first starts – up in the beautiful and verdant Western Ghats of India, almost pristine, in harmony with its biodiversity, its rivers, its wildlife, its trees and  hills, sacred  groves, (Devara Kaadu) local deities and farmers. Under a high canopy of shade trees, coffee in India grows gloriously alongside pepper, cardamom, oranges and arecenut.

The coffee flower smells nothing like what it taste - the flowering of the coffee plant, gives a sweet fragrance, intoxicating the entire landscape.The blossom of the coffee plant transforms the landscape to appear like a white, fragrant laden sheet – its smell sweet, the air  gentle. This rousing lasts ,sadly, for just a few days before the coffee flower matures to become the  coffee seed and ready to be picked.

Coffee blossom

She is then gently handpicked and and mostly sun dried . Sometimes sent to a local Curing Works. Once dried, she is put into sacks and stored -usually in the store room of the residence of the coffee grower. She awaits the agent.

  

Coffee grows only in tropical countries and grown mostly by small farmers as a cash crop. Due to the predominance of small coffee growers in India, (according to The Coffee Board of India almost  98% of coffee is grown by marginalized and small farmers) , coffee is sold through agents – this buying and selling happens at the “gate”. The agent offers a price and farmer takes what he gets – because some commodity trader sitting in a glass office has decided the price of this precious bean.

A coffee farmer sun drying his coffee

Coffee seeds  are  dried, roasted and powdered to make coffee powder.Sometimes the coffee goes to towns and cities for further trade and household consumption- as filter coffee, in South India, or as ghastly instant coffee that is produced by the likes of Nestle.Some find their way into cafés to become  the classic espresso, or  cappuccino or other high street coffees - for which there are millions of consumers who are willing to pay a couple of dollars a pop. In the multibillion coffee industry, the profits go mainly to the shippers, the roasters and the retailers.

 But if you are a traditional coffee drinker and relish your coffee, you avoid the Starbucks and Café Coffee Days - instead you would go to an unpretentious hole in the wall –  "Gayathri Coffee Works" for   example- and buy premium Arabica coffee, freshly grounded for about Rs. 360 a kilo.

Gayathri Coffee Works, Mysore

Revathi Malay

At a time of unprecedented rise in temperatures in most of the districts in Karnataka and warnings of further rise in temperatures, some untimely rain in February, the coffee belt of  Karnataka was blessed with the timely and good arrival of the Revathi malay in the districts of Kodagu, Hasan and  Chikmagalur.

Revathi malay (malay means rain in Kannada) is the blossom shower that arrives every year (in a normal year !) and is rainfall that occurs between March 1st and April 30th.Revathi is the rain that is needed for the coffee bud to flower . The blossoming is key to coffee production . This year Revathi has kept her date and has arrived on time much to the relief of the coffee farmer.
However, what is worrying is the warming from the  Meteorological Department, that there is likely to be an average two degree rise in the mean temperature in most districts. This certainly is bad news not just for coffee but for other crops too.

Our most ubiquitous, humble but delicious bananas are under so much stress.The  banana trees have started to  wither due to the lack of water and excessive heat. Coconuts are dropping early and their size reduced due to excess heat, says   Timmegowda, director, All India Coconut Growers’ Federation.This will only get worse. In the Malnad, the summer temperature range was between 18 degrees and 28 degrees Celsius. Today the lower range starts at 28 degrees says Mohan Kumar, a coffee grower in Sakleshpur.

Which brings me to what I like to
ask "why is the measure of love loss ?"

The insufferable hypocrisy of Starbucks

The giant global coffee company, Starbucks Corporation, has recently been in the news for all the wrong reasons. With over 20,000 odd stores in over 60 countries from Aruba to Wales, the  Starbucks stores are ubiquitous  in high street locations, serving up all kinds of brews and blends – from coffee sourced from Ethiopia to Hawaii. Starbucks now joins the infamous rank of companies that avoid paying tax. A recent Reuters investigation found that the company reportedly paid hardly any tax in UK, despite generating over £3bn in sales over 14 years, but had paid less than 1% in corporation tax. Worse still, Starbucks often reported a loss in its UK business, yet consistently told shareholders that Starbucks was profitable. In 2011, their total annual revenue was $11.7 billion on which they hardly paid tax. Britons are now raving mad that in 2011, Starbucks did not pay a penny by way of corporate tax , despite sales of $640 million. In an attempt to regain its credibility and public image, Starbucks has now promised a £20m corporate tax pledge. But this is too little, too late.

For any business it is perfectly legitimate to make profits and therefore perfectly legitimate to pay taxes. While Starbucks may have not done anything " illegal ", to me it reeks of nothing less than rapaciousness and corporate greed - finding complex tax schemes,creating international subsidiaries, finding ways of moving money to low rate regimes, to avoid paying tax on their profits. According to Forbes,Starbucks CEO ,Mr. Howard Schultz , personal net worth is  $1.5billion.

It is estimated that 1.6 billion cups of coffee are drunk worldwide everyday. Coffee is a $80 billion business today  and it is often said that  it is the most valuable trading commodity in the world after oil. However, the share of the coffee trade enjoyed by the actual coffee grower  has fallen by two-thirds,whilst transnational coffee companies have reaped huge profits from the low price they pay to the producer.According to Anthony Wild, the average price paid to coffee producers internationally has fallen 80% since their last high in 1997. The widening gap between the have and the have-nots are illustrated in the growing inequalities of the coffee trade.Most of the coffee growers are small producers and this is specially true of Ethiopia where some of the finest coffees are produced - the coffee farmer can own as few as 20 plants. The story is no different in India - where 98.5% of coffee farmers are small holders. Since they are at the mercy of the global coffee trade which squeezes them for their own profits, coffee farmers are being forced to abandon their holdings and move to cities seeking a different  and often uncertain future.

The boom in coffee consumption means next to nothing for the coffee producer .That Starbucks creates new markets in different countries does not help the producer. Today the coffee farmer is being battered by climate change on one side and speculative trading on the other - the small farmer in the Western Ghats of South India , or in the Sidamo Province of Ethiopia faces unpredictable weather patterns,unseasonal rain, rising temperatures , periods of drought followed by periods of flooding ,is desperate to save his crop  and   his livelihood so as to provide for his family .But sadly, a  trader sitting in London or New York will  decide the price of the coffee to be paid to the farmer and the coffee farmer is lucky, if in the end ,he even gets 10% of what you just paid to Starbucks Corporation  for your Latte.

So for a company that says they strive to "strike a balance between profitability and social conscience," they have a long way to go.

After Revathi, Rohini did not come

After Revathi, the monsoon laden Rohini did not come as she usually does.
Her arrival in June after the Indian summer is life line for all those living in the Malnad and for 150,000 coffee farmers.  The warm Indian summer dries up tanks and springs, but when Rohini arrives, life is back. Springs are activated, tanks are recharged and rivers start to flow.

But this year, Rohini arrived late.Like Rohini, the other rains also arrived late  - Bharini, Kritika, Pushya . They were all late.. Not only were they late, they were not  accompanied by the usual strong winds  -the rains did not get distributed evenly and some  parts of the Malnad received very heavy rains and their were unseasonal downpours. The rains and winds are all changing  in their  patterns. In fact, the beauty of the monsoon pattern  in the shade growing coffee regions is in  its distribution, according to Dr Anand Pereira, an eco friendly coffee planter in Sakleshpur.

According to India Meteorological Department (IMD) data, monsoon rains from June to August 8, 2012 have been deficient in North Interior Karnataka by 33 % , South Interior Karnataka by 34%  and in Malnad it has been upto 44% . For a crop that is so dependant on the monsoon and for the 100,000  coffee farmers in Karnataka, mostly small holders , this spells disaster. What is often not known is that most of the coffee farmers are small farmers. According to India's Coffee Board 98.8% of the farmers are small holders - this is the story of coffee cultivation - not just in India but globally, from Africa to the Americas - coffee is produced by  small farmers - some who own hardly 20 to 30 coffee plants. One drought, or one season of incessant rain can wipe them out. And unlike tea, the countries that produce coffee, are countries often too poor to drink it - with the exception of Brazil that consumes 40% of what is produces. The flow of coffee is from developing countries to developed countires - where coffee is produced at the lowest possible  price .The top producers are Brazil, Vietnam, Colombia ,Mexico and the top consumers are  United States, Germany, Japan, France.India is about 5th/6th in coffee production .

So while our farmers who wait and pray for rain, who invoke the rain Gods so that their crops survive  and they get a good harvest, so they can send their kids to school, urban India  awaits the arrival of  its first Starbucks store.

And Revathi did not come

Summer has descended upon the subcontinent .
The cities, towns, plains, and the once salubrious hill stations are heating up.
The days are hot, the nights are still. There is no escape.
It is immutable.Everyone waits for  rain. The Malnad is ready to receive her.

Even the beautiful Coffea Arabica  bud is ready. It awaits Revathi ,the pre-monsoon shower.  Revathi, the giver of life, the nurturer.In the wilderness of the Malnad will Revathi keep her date ? But this year she is late again. Her timely arrival is important. For some its life .For some its business as usual. Her arrival announces that the South West Monsoon is on its way.Her drizzle enhances the coffee bloom .The coffee farmer waits in anticipation.  She brings the Malnad back to life.

This year the temperatures in the Malnad touched 36 degrees  against a normal temperature  of 33-34 degrees Celsius. Apart from this higher than normal temperature, there has been a dry spell of  nearly 5 months in the coffee growing areas that is affecting coffee production. But Revathi did not come.

The  dry spell  and the high temperatures are worrying the farmers, specially in the areas that lack irrigation facilities. Coffee production in India is about 300 years old and largely occurs on small, family-owned farms - majority being up to 2.5 acres. The occurrence of irregular and unseasonal rain,  extreme weather events - have started to take its toll on India's coffee.The hard ,dark brown coffee bean belies the fact that the coffee crop is acutely sensitive and like most crops is sensitive to rain. A long-term increase in the number of extreme and unseasonal rainfall events has lowered crop yields, threatening the livelihood of those dependant on this sector .Coffee has seen a decline in its productions in the last couple of years. In fact the magnitude of this decline is quite astounding .Yields have declined almost 10% since 2000.

In the year 2009  both Arabica and Robusta suffered losses due to unseasonal heavy rains.Likewise, heavy rains during the blossoming delayed the harvest and lowered crop quality in 2010. There have been periods of drought  In 2002, Karnataka experienced a severe drought for three consecutive years (2001-02, 2002-03 and 2003-04). The IPCC on Climate Change predicts that yields from rain-dependant agriculture could be down by 50% by 2020 . In the Coorg region, some areas have already seen rainfall drop by one-third – from 106 inches per year to 70 inches.

The problem with today’s economy is that we have become obsessed by  the idea of "GDP growth” - which seems to be the single most important measure for success. A green economy is the only sustaining economy - it put values on natural resources, it uses resources sparingly, makes use of its natural capital rather than wasting it and stands committed to environmental protection.Our current GDP models do not recognise the role of natural capital.There is a lot that needs to change. Unless the economic importance of biodiversity and ecosystems, of ecology and forests, not just among economists, but at the level of policy makers, administrators, businesses and the public is understood,the wait for Revathi will get longer.

Whose Money Is It Anyway ?

I am not an economist.
Neither do I subscribe to The Financial Times nor to The Economist. Nor do I care to seriously read  any of the salmon colored newspapers.

 Despite all of this, I am amazed at how, in the very recent past, there has been a flood of articles, op-eds, stories, blog posts, tweets and re-tweets on the rise in income inequality.  Outrage seems to be on how we have allowed capitalism to grow into the form that it is today - which is killing equality, destroying the world’s ecology  and causing severe environmental degradation .The manner in which there is an overzealousness in  natural resource exploitation , one would imagine that  our natural capital is here for us to last till perpetuity.
The rise of disparity of incomes is not limited to countries such as India, where there has been a history of  stark inequality, but the rise of income inequality is growing notoriously in developed countries such as the US and UK. A recent study done in the US showed that the top 1% households' income grew by 275% - this is just one revealing statistics – there is a lot  more data out there to show that more wealth is shifting to fewer  people, with few bankers having a disproportionate control  over the economy.  As a recent New York Times article puts it – it has been the era of the rise of the super rich. If not the ultra-rich.

Forbes annually tallies the fortunes of the world’s billionaires. The world’s 1,210 current billionaires, Forbes reported in March 2011, hold a combined wealth that equals over half the total wealth of the 3.01 billion adults around the world.  Something is seriously going wrong. Despite India s economy growing anywhere between 7% and 8 % in the last few years, income inequality has doubled in 20 years. Surely, GDP growth cannot be the only measure of development and progress or for that matter prosperity.
Nevertheless, why is all this happening? What are we missing that is driving this rapaciousness? Is it because of our inability to perceive the difference between public benefits and private profits?

I have come to see this polarisation more acutely and closely over the last 12 months in my work with the Karnataka Growers Federation.   I have been working extensively with the small to medium-sized coffee farmer in the southern state of Karnataka. Coffee is now big business in India.  According to India’s Coffee Board, domestic consumption has been witnessing a steady growth of five to six per cent in the last five years. And we can see this – almost all of urban India today is dotted with coffee bars. Coffee is the preferred choice for the upwardly mobile and uber cool. With the ubiquitous Café Coffee Day, Baristas, Costa Coffee, and the much awaited entry of the more expensive Starbucks into India, the latte and cappuccino are here to stay.

The world has been gulping down so much coffee that  it is now the second most globally traded commodity after oil.  But coffee is one of the few internationally traded commodities that is still mainly produced not on large estates or plantations but on small holdings. The economies of the some of the poorest countries are highly dependent on trade in coffee –in some African countries like Ethiopia and Burundi -but the producer today hardly makes a living from his or her coffee bean, given their small holdings – the majority being anywhere between 2.5 acres  to10 acres.

 The story is no different in India.
Contrary to popular perception, 98.5% of coffee growers in India are small farmers. Today India produces 4.5% of the world’s coffee. This is good news – to some.

The bad news is that coffee is produced by 90 countries globally but consumed by just 40 countries. The global coffee trade today is close to USD 96 billion. Of this USD 96 billion trade, a meagre USD 8 billion comes back to coffee-producing countries. There is not a chance in hell that the farmer, who produces coffee on say a  10 acre holding, has any control on the market prices or access to any share of this mega profit. The producer s share of this profit is unusually low while the usual suspects in between and at the end, laugh all the way to bank. The world’s big four coffee roasters  also have big coffee brands – and therefore enjoy huge margins - while the producer benefits the least. Squeezing the small farmer for the lowest possible price – in the long run is a bad business idea – it will drive the coffee farmer out of business.

Coupled with no control over prices, there is another challenge facing the farmer today – that of unseasonal rain and unpredictable weather patterns. Whilst climate change is just one of numerous factors that may affect global coffee production, the International Coffee Organization considers it will likely be one of the most important ones with smallholders (who produce the majority of the world's coffee) the most vulnerable group.  In Karnataka, the state that produces about 70% of India’s coffee, there were 3 years of continuous drought during the coffee season from 2002 to 2005 followed by heavy rainfall in 2006 and 2007. This lead to severe infestation of pest and disease, like stem borer and leaf rust, which resulted in huge crop loss.  For the first time we heard of suicides among coffee farmers.

When it comes to coffee, India is unique. It is the only country on the world map that grows  all its coffee in the shade. Indian coffee is  grown in forest like conditions –verdant and rich in biodiversity. India also grows both the varieties of coffee – Arabica (Coffea Arabica) and Robusta(Coffea robusta). Arabica is high-end coffee – it is rich and yet delicate in flavour and therefore  commands a higher price.  Robusta is the low-end variety – it  is hardier but commands a lower price. One would think that Indian farmers would want to grow Arabica and get a higher price for their coffee bean. But sadly the trend is the reverse. Arabica-growing farmers instead are opting out of this highly-flavoured cherry to grow the Robusta variety (which requires less care), partly because the Arabica plant cannot stand up to climate variability and unpredictable weather patterns.  And this is the other thing – we are now drinking more and more coffee but of less and less quality.  
So whether Arabica survives or not, or whether farmers only grow Robusta because they have to, I know that if Baba Budan were around today, he would have probably been a very rich man.

For the love of coffee

Before the Café Coffee Days, there was Baba Budan and his 7 coffee beans.

Baba Budan, a 17^th century Sufi Saint, smuggled 7 coffee beans into India from Yemen, thereby, part breaking the Arab monopoly over coffee. The story goes that Baba Budan smuggled out 7 coffee beans from Al Muckha (Mocha), a port city in Yemen. Between the 15^th and 17^th century, Mocha was the main market place for coffee trading. It is from this Red Sea port of Mocha, that the English word mocha has its origin.

Coffee arabica plant and seed

While the earliest history of coffee goes back to antiquity - there is evidence that point to the existence of the coffee plant in 13^th century Ethiopia. Till the mid 17^th century or so, the Arab rulers enjoyed their monopoly over coffee. They did what they could to ensure that the cultivation did not spread – so they would strip the bean of its outer layer, roast it  and render it infertile. They banned the export of the coffee bean – it could be taken out only if it was boiled or roasted so as to prevent the bean from germinating. Coffee had been colonized.

This is why Baba Budan, an Indian pilgrim to Mecca, had to smuggle his 7 beans out of Yemen. It was not just Baba Budan who broke the coffee colonization, there was fierce competition between the European colonizers to get hold of coffee. It was the Dutch who in the late 17^th century first managed to get some seeds and attempted to grow coffee in their colonies.   The Dutch were by now already growing some coffee in the Malabar region of India as well as in their other far eastern colonies.  And before you knew, the British started coffee plantations in Jamaica -the rest is cruel ,colonial  history.

There are myriads of stories of how coffee found its way out of Arabia and how it was transported by colonizers, travelers, wanderers, investors ,missionaries   and traders  – with the rise in the demand for coffee, came a rise in the demand for sugar, both becoming important commodities. Coffee was a commodity that formed part of the trade triangle – from England to Africa to the Americas. Coffee houses sprang up and became meeting places and were centers of social interaction.

But behind all this energy and movement, the story is really not sweet. The well-known coffee historian, Antony Wild, in his book “Coffee :  A Dark History”, takes us to the early days of the history of coffee, on how the, European merchants came across it in Arabia and brought it to Europe. Soon hugely popular, they quickly realized that they could make more money if they planted coffee themselves, in their plantations, using slave labour in their tropical, colonial outposts. Coffee was now on its way to becoming global – from the colonies in Caribbean to  the colonies in Java – coffee was leaving its footprint.

As Antony Wild says, this is the legacy of coffee – tropical countries produce it and rich countries drink it. Even today this legacy is almost true . Quite unlike tea – countries that produce tea mostly drink it.

Meanwhile, on his return to India, after Mecca, Baba Budan planted the Arabica  beans in the hills of Chandragiri, situated in today's Chikmagalur district of Karnataka– and thus is the story of the birth of Indian coffee. Today ,India produces almost 4.5% of the world’s coffee, grown mostly by small and medium growers, and is grown mostly in the three main Southern States of Karnataka, Tamil Nadu and Kerala, with Karnataka contributing to 72% of what is grown. (A little bit is also grown in the Northeast and Andhra Pradesh). With the rise of urban India there is a rise in coffee shops – coffee bars are becoming ubiquitous in urban India. 


The once less known South Indian filter "kaapi" , served piping hot in steel tumbler with a small dabarah (cannot find a similar word in English) for cooling, has now morphed into  cappuccinos and lattés , finding its way onto menus across India’s burgeoning cities and youth.

India’s coffee is both special and unique  - right from its planting to its traditional style of drinking.  And that is really the idea behind this blog post. It is not to re-tell the well known but bitter history of coffee but more to inform about its current crisis and uncertain future.

Indian coffee is the finest shade growing coffee in the world and it is rare because all the coffee grown in India ,is grown in natural conditions , is dependant on monsoon rain and thrives in shade growing areas. There are close to 250,000 coffee planters in India – of which 98% are small farmers, cultivating on less than 10 hectares. There is almost no mechanization – it is labour intensive , employing about 2 million people  directly thereby generating rural livelihood.

Drive through any coffee growing district in South India – From Coorg to Chikmagalur and what you will discover are verdant coffee forests, acres of coffee estates full of all kinds of   trees with coffee growing under a thick canopy of natural shade, often mixed with ginger, pepper and vanilla . With most of the  coffee estates located in the Western Ghats, coffee forests are located in biodiversity hotspots that have a high level of endemism, bio diversity and wide array of flora and fauna. From Indian mahogany, to teak and  sandalwood , to the silver oak, and white cedar, trees stand majestically  tall . It is almost as if the forests nurture and protect the coffee berries  . Maintaining forests ensure a healthy coffee crop and the coffee planters almost has a sacred relationship with nature. There are wide species of  butterflies and birds . Protected wildlife parks often dot the region. Elephants wander about, sometimes destroying coffee plants  - the  famous langur, slender loris, ,spotted deer are some of the animals that live in the region.

And here’s the other thing – five major South Indian rivers have its origin in coffee estates, the most popular one being the  River Cauvery -that starts in the coffee growing region of Coorg.  Here the river is venerated and worshipped as Goddess Cauvery – as a protector of their land.  Coffee is so closely linked to the elements – and over time the coffee growers have developed  a deep tradition to preserve   rivers and forests.

But the picture is not  about the sweet fragrance of the coffee plant in bloom or misty rolling mountains. It is about a rapid change in climate that has resulted in rising temperatures and unseasonal  rains , sometimes heavier rainfalls , periods of   drought and flooding ,prolonged higher day time temperatures and sudden drop in night time temperature – all climatic impacts  that have resulted in lowered yields that are making coffee cultivation almost economically unviable.  There is a growing need to invest in technology to adapt to changing and unpredictable weather patterns but since the farmer is small, these are not always accessible or possible. There is a shift that is taking place. Slowly growers are selling their estates, part by part, the price the land fetches for the timber it holds, is more profitable than cultivating coffee in a climate changing world. More worrying is that there are no takers in the next generation as high profits on coffee cultivation start to dim.

So is coffee all about  about cash and commerce ? Is its  value limited to   commodity indices  and high menu prices? Does no one recognize its intrinsic value and its role in maintaining  biodiversity, acting as a carbon sink, globally sequestering about 6 billion kgs of carbon,  and  conserving wildlife and ecosystems ?The value of coffee lies way beyond  its economic price tag – its value in providing ecological services is indeed priceless.

During my recent visit to Chikmagalur, I met a coffee planter who said that he himself had personally planted over 100,000 trees in his life time –  this was way before the world was hot on climate change , carbon trading and clean development mechanism. And standing on his coffee estate I thought to myself - indeed these small planters are not Gordon Gekko s children !

The silent coffee planter that protects India s rich biodiversity and forests, does not need   a trading mechanism to protect our natural resources and create a better world. What he needs is for his voice to be heard while a different crisis brews.

It is indeed time to wake up and smell the coffee.