Being at the bottom of both the food chain and the coffee value chain, coffee farmers are the ones faced with the most challenges and problems. Lack of a voice and a bargaining edge has pushed the coffee production sector to the edge with several  farmers uprooting their coffee bushes and opting for better options such as avocado and macadamia.

Most farmers cannot afford to make a decent living through coffee production compared to a decade or two ago. Coffee farmers used to be respected members of the society who could afford to send their kids to school and afford a decent way of life with comfortable living standards. Those days are long gone and now efforts have to be made to make coffee farming attractive once more.

There have been several challenges facing coffee farmers. In all origins, the problems are almost similar and with little effort from other stakeholders, the situation has worsened. Speaking to different farmers from several origins, they paint a picture of despair and barely holding on. Most of the coffee production in the world is done by subsistence farmers and with the challenge of climate change, the situation calls for radical changes.

Major challenges facing coffee farmers.

Low prices. The coffee sector has been seriously hampered by the dismal payments that the farmers have been receiving over the last 10 – 15 years.

Watson owns Kaga Coffee Estate in Kenya  says, “prices for coffee are really low. It is hard work we do and all we ask for is a fair price. If prices remain this low, we will have to abandon coffee because it doesn’t make any sense at all”. 

In some origins, the coffee prices are so low that farmers are forced to uproot their coffee plants and plant alternative crops such as macadamia and avocado. These plants use less labor, chemicals and attention as the coffee with significantly better returns. It is clear to see why farmers prefer growing these crops.

Lack of access to direct buyers: Direct buyers of coffee guarantee much higher returns for farmers because it is through negotiations and bargaining that prices are determined. This means that the farmer won’t release their coffee until they feel that they have achieved a fair price. This is unlike the alternative which is the auction system.

The auction system has quite a number of loopholes and weaknesses that are regularly exploited by unscrupulous traders to get better prices at the expense of  the farmers and producers. The result is increasingly bad prices for coffee. Traders are able to manipulate the prices to their advantage and to the detriment of the coffee farmers. With the traders holding all the cards, farmers are left at the mercy of these buyers.

Accessing direct buyers has been a problem for the farmers and only a select few can manage to deal directly with their buyers. This has led to the farmers relying on cooperatives and middlemen with significantly lower prices that keep on decreasing which is unsustainable.

Delayed payments under the current system: Coffee farming is time consuming and very labor intensive. From planting, to chemical application to pruning and harvesting, coffee production requires an available and prompt work force.

The workers are not permanently employed, rather they are seasonal workers who need to be paid immediately. After delivery of their coffee to the cooperatives, farmers have to wait up to 3 months before they can receive their payments. This greatly inconveniences them and they end up borrowing money to pay the workers.

Watson adds, “if you manage to sell your produce, again you have to wait for even three months before you get paid. We have to pay the workers and still buy sprays! What do you do? You can only borrow, yet we have sold the coffee”. 

Lack of access to finance and affordable credit: Due to the delays in coffee payments to farmers, it is clear the farmers are in need of affordable credit facilities and access to finance for smooth operations of the farms. Farmers are unable to get loans and advances because they are deemed as risky lending due to the volatile nature of coffee prices. There are limited dedicated credit providers who work exclusively with coffee farmers to ease this burden. This happens to be a global problem for coffee farmers in most coffee producing origins. 

Little to no access to logistics providers: Farmers who have their own produce to sell find it difficult to transport and warehouse their produce in readiness for export or shipping. Lack of logistics services to the small scale coffee farmers means that the farmers are left with little or no choice but to sell their coffee to brokers.

Warehousing is a crucial activity in the coffee value chain where coffee meant for export has to be warehoused in a licensed and approved warehouse. The smallholder farmers find it exorbitant to store their coffee in these warehouses and instead opt to store it in their homes or farms  as natural coffee or parchment until they can sell it.

Kanjole Balunje from Uganda is a coffee farmer. He says, “even though the coffee sector has problems, still some can be solved through goodwill by stakeholders such as buyers. Affording logistics for smallholder producers is a challenge. So they rather the coffee overstays on the trees than harvest and it starts going bad. Storage is an issue that requires urgent attention”. 

Coffee transportation also calls for specialized transport that won’t compromise the quality. This specialized transport has proven to be out of reach of most farmers who turn to middlemen at very high rates that eventually eat into their profits.

Providing solutions through technology.

Market access: AGnimble digital agricultural platforms ease the most pressing needs for the coffee farmers. Market access being a major bottleneck for farmers. The platforms allow the farmers to have a digital storefronts where buyers are able to trade with them directly. With AGnimble farmers don’t only gain access to thriving markets that offer better prices, they also have access to several business tool to manage their team, manage inventory and receive payments from buyers onetime. This business tools allows these producers to run their business more efficiently.

Balunje adds, “if we can be able to get more buyers, I believe the competition would be helpful for prices to improve. Good prices and more buyers is one thing we are looking for, as farmers’ ‘. 

With AGnimble collaboration tools, both the farmers and the buyers communicate, work out convenient deals and sign contracts, all in a seamless centralized place. The prices are agreed upon beforehand which not only enables the farmers to get paid fair amounts but also allow the producers to gain viability of their production efforts.

Simplified Payment: Delayed payments can be reduced because the contract and payment process is streamline using AGnimble. Part of this contract are payment terms and due date, and when payment is due, payment can be sent directly to producers and all payment activities can be tracked on a single platform. This process is a beneficial aspect to the farmers because they are then able to plan out their farming activities and are able to access skilled labor to help out in the farms. 

According to Watson, if coffee could get paid on the spot or within a short period of time, they would even increase production and area under cultivation too. He says, “Of course good prices that are paid within a short time is a dream come true for us. We would have the motivation to not just increase the output but also expand the farming areas”

Warehouse and logistics :AGnimble also provides crucial links to warehouse and logistics providers which greatly eases storage, transport and shipment of the coffee. This greatly assists the farmers not just planning for their production cycles but also the processing periods and cycles. Without these services, farmers have to gamble about when and how to process their coffee to maintain freshness and viability for longer.

Access to finance: access to finance and affordable credit facilities is a possibility with technology. AGnimble has partnered with financial service providers to advance credit to the buyer to enable buyers to pay farmers and producers on-time. The farmers will now be able to focus on producing rather than worrying about loans and the source of capital.

Enhanced Collaboration: Farmers can connect with coffee importers and roasters using AGnimble’s integrated chat and WhatsApp functionality. Collaborate in real-time, discuss specifications, negotiate pricing, and build strong relationships with buyers, all within the platform.

Inventory Management: AGnimble’s inventory management feature allows producers to monitor and share their coffee inventory with potential buyers, receive real-time updates on sales, and effectively plan for replenishment, all from one centralized platform.

New markets: Exposure to new markets will allow farmers to focus on value addition to their green coffee which greatly increases the prices that they are bound to receive. As of now, the majority of coffee producers practise washed process of coffee processing. While this is a proven method, it is faced with several challenges with water availability being the main concern. Experimental processes such as honey processing and naturals not only fetch higher prices, but also reduce labor costs. With the washed process, you need several people to accomplish the process while with the natural, you need just enough to dry the coffee. Cost cutting during the processing stage is a great advantage to the farmers who struggle with already low prices. lower processing costs leads to better profits for sustainability.

With AGnimble, coffee producers can confidently enhance their green coffee production as they can gain access to thriving markets that offer better prices. With AGnimble business tools, farmers can also manage their team, manage inventory and receive payments from buyers onetime. These addresses some of these producers biggest challenge and presents a solution that will significantly help boost coffee production while helping producers earn more income.

Coffee Importers and Roasters, on the other hand, benefit from AGnimble by being able to source green coffee sustainably and with full traceability. They enjoy a reliable supply of premium-quality coffee and a vast selection from various origins. This also gives coffee importers and roasters the opportunity to diversify their offerings, from microlots to single origin blends. Green Coffee Importers and roasters will also have access to AGnimble business tools to manage producers, manage trade documents, pay producers in over 140 currencies, and manage inventory all in one seamless platform.