The future of coffee is in limbo. Between the shifting Coffee Belt—the latitudinal band around the globe suitable for coffee production—increasingly unpredictable weather patterns due to global warming, and the volatile commodities market where much of the world’s coffee is traded (and devalued), coffee production is facing multiple existential threats. For coffee to survive, significant investment will be required, and a new report published by World Coffee Research puts that amount at $452 million per year.
We are currently nowhere near that.
Published June 28th, the findings are the work of Dr. Mywish K. Maredia and Jose Maria Martinez of the Department of Agricultural, Food, and Resource Economics at Michigan State University. That annual figure, created by the team using an economic model they developed, would need to go directly to agricultural research and development, focusing particularly on historically underinvested areas like Africa and Latin America. These investments would go to help “preserve origin diversity across many countries and support farmers to adapt to climate change,” per the paper.
According to the authors, the current yearly investment in coffee in the global south is about $115 million. These investments have come heavily from the public sector, by a ratio of roughly 9:1. By their estimates, yearly investments in coffee production need to some over 2.5 times higher than they currently are. Using the general rule that R&D investments should be proportional to market value, coffee production should receive 4.8% of total investments in the 45 countries included in the research. Currently, it is just 1.8%.
“This scale of underinvestment cannot continue if the world wants to continue drinking its favorite beverage,” says economist Mywish Maredia of Michigan State University, lead author of the study. In the paper she writes, “Increasing global investments in coffee R&D to accelerate innovations across multiple countries can help reverse this trend and support the coffee sector to keep up with growing consumer demand and respond to the challenges of climate change and poverty, while avoiding further consolidation of production.”
For those looking to learn more about the disparity and how the research was performed, WCR is hosting a webinar with Dr. Maredia. Taking place Wednesday, July 12th at 10:00 CT, the webinar, titled The Number: Measuring Coffee’s Investment Gap, will be hosted by WCR CEO Dr. Jennifer Long who will be in conversation with Dr. Maredia “to better understand what this number means for our industry at large.” Registration for the event can be made here.
For more information, visit World Coffee Research’s official website.