What Do I Need To Know?

Meeting the R&R need will be crucial to securing coffee supply for 2050 and beyond – but there are no quick fixes. Here are some key considerations.

Farm level investment decisions are highly complex and personal given farmers needs and preferences

Farmers Need And Preferences

“How can I afford to take on a loan when I have school fees, and other commitments?”

“Can I afford to lose the current income that I make from that coffee area for 2-3 years?”

“If the price of coffee changes, will I actually earn more than I do now?”

“Should I risk the increased cost and risk of R&R for potential additional benefits, or simply avoid the risk and rely on my current yields?”

“Should I focus more on coffee and do R&R, or are other crops/economic activities better for me currently and in the future? ”

Those interested in supporting farmers in R&R also have many considerations

Farmers Need And Preferences

“How do I reach these farmers? Is there a cooperative I can work through?”

“Are there local nurseries that can provide seedlings at the quality and volume I need?”

“Who can I partner with to make this work?”

“Is a return on my capital desirable? Feasible?”

“How do I assess risk, when there’s so little track record of long-term lending to these farmers?”

“How do I reconcile that those with the most need, are also the hardest to reach and riskiest to lend to?“

Farmer Pyramid

Different types of farmers typically require different types of R&R support and are easier/harder to serve. Understanding farmer characteristics is important to help determine the most likely financing instrument and capacity to undertake R&R at the farmer level.

Click on the pyramid


Farmers further down the pyramid will tend to have lower financial literacy, less collateral, and there will be fewer ways to accurately understand credit risk (e.g. track record of selling to trader), or to mitigate credit risk (e.g. diversification through a cooperative). Transaction costs will be higher as ticket size will tend to be smaller, access to the farmer will be more expensive (e.g.not aggregated through a coop), and due diligence/risk mitigation is harder (see left). As such, grants may be more suitable than loans.


Estimates of number of farmers in each segment comes from Hans R. Neumann Stiftung, Structure of the coffee sector and implications for R&R, 2017, methodology from: Dalberg, Inflection point: Unlocking growth in the era of farmer finance, 2016.

Key Elements of a R&R Program

We’re getting to know how to conduct crop renovation and rehabilitation even better. Successful programs generally contain three elements…

Inputs

To ensure an optimal return on investment, high quality inputs are critical. This includes planting material (for renovation), trees (timber, fruit, etc.), and other inputs such as nutrition, tools, and herbicide.

Finance

It is necessary to accompany R&R with support on determining the best approach at the farm level, knowledge on good agricultural practices, and management of long-term loans.

Knowledge

There are expenses associated with R&R – both to cover upfront costs and often to cover the ‘valley of death’. Financing either through loans or grants can be critical when farmers can not cover costs from savings.

Inputs

To ensure an optimal return on investment, high quality inputs are critical. This includes planting material (for renovation), trees (timber, fruit, etc.), and other inputs such as nutrition, tools, and herbicide.

Inputs

To ensure an optimal return on investment, high quality inputs are critical. This includes planting material (for renovation), trees (timber, fruit, etc.), and other inputs such as nutrition, tools, and herbicide.

Knowledge

There are expenses associated with R&R – both to cover upfront costs and often to cover the ‘valley of death’. Financing either through loans or grants can be critical when farmers can not cover costs from savings.

Timing Considerations

Investments are not only needed at the onset of renovation or rehabilitation. A mix of inputs and knowledge are needed until the coffee trees are producing. Finance covers the costs of the inputs throughout, though the biggest need for finance is upfront.

Explore the timeline below to better understand what is needed, when.

Drag the timeline
YEAR 0
 
Year 1
Establishment
Year 5
Maintenance

Technical assistance is a continuous process that is relevant for farmers and R&R supporting organizations

Before: Training

  • Implement renovation training programs and select approach
  • Select lead farmers that can function as pilot plots
  • Perform/train farmers to conduct soil analysis

During: Monitoring

  • Monitor replanting efforts and make sure that farmers implement good agricultural practices
  • Implement follow up training programs adjusted to farmers needs (e.g. how to manage nematodes)

After: Evaluation

  • Conduct evaluation of replanting programs and analyze data on failure and success rates

Before: Training

  • In cases where loans are dispersed through local coops, stakeholders must educate coops on how to manage long-term loans
  • Make sure that farmer org./extension service worker is adequately equipped

During: Monitoring

  • Monitoring should take place to ensure that coops (or other farmer organizations) are operating according to required standards

After: Evaluation

  • No technical assistance is likely needed

Before: Training

  • Finance providers without experience in dispersing R&R loans must be trained on how to manage these loans
  • Advocacy efforts to persuade local FIs to lend to farmers for R&R

During: Monitoring

  • No technical assistance is likely needed

After: Evaluation

  • No technical assistance is likely needed

Before: Training

  • Nurseries often need capacity building and training to become certified and be able to produce high quality seedlings in commercial quantities

During: Monitoring

  • Some monitoring is likely required to ensure that nurseries are retain quality standards. Genetic testing should be continued (e.g. through the World Coffee Research nursery certification program)

After: Evaluation

  • No technical assistance is likely needed

Learn more and get involved

There is a lot of work to be done to ensure the long-term supply of coffee from countries where the crop has long shaped the social and economic fabric. Learning to extend the life of their trees and improve yields helps farmers stabilize annual production and in turn, income, while the rest of the world benefits from a steady supply of quality coffee. Continue on to learn more about the immediate attention and action that is required to make this a reality.