Bright prospects for organic coffee.

Organic coffee is more than a way for companies to jump on the "going green" bandwagon. It is a socially conscious and eco-friendly process that benefits every link of the coffee machine: from farmer, to roaster and consumer. As the public becomes more aware of the quality of products they choose to consume, organic coffee will seemingly make a large jump in sales.

The number of consumers in Europe and the U.S. buying organically produced products is on the increase, and the demand for organic products is growing rapidly. In 2006 alone the organic market grew by 16% in Germany, with a sales volume of 4.5 billion. This corresponds to a 3% share of the food market. In 2005 the average growth of Europe's organic markets was 10% to 15%. Experts are expecting similarly high growth rates for the years to come.

The growth rate for organic coffee usually lags behind this trend, and the market share of organic coffee is still smaller than the (total) market share of organic products in most countries. The world production of organic coffee was 1.5 billion bags in 2007. However, we regard the current modest market share of organic coffee as a cause for optimism. We expect the market for organic coffee to grow substantially in the years to come, in the wake of the generally strong growth in organic products.

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What Exactly is Organic Coffee?

Organic agriculture does not simply mean getting rid of synthetic fertilizers and pesticides, with lower yields as a consequence, nor returning to the farming practices of our forefathers, as is often erroneously claimed. On the contrary, organic agriculture means the continued advancement of traditional farming systems and keeping in touch with current know-how. The prime aim is to preserve and increase the fertility of the soil, the basis of sustainable yields. To achieve this, it is critical to give the humus layer sufficient nourishment by providing permanent soil coverage, planting shade trees and legumes and spreading green manure and compost. In addition, it is permissible to apply approved supplementary organic and mineral fertilizers, where necessary. However, synthetic fertilizers remain taboo.

Diseases and pests such as the coffee berry borer are kept tinder control by a combination of mechanical and biological measures, such as the careful collection of fallen coffee cherries and the introduction of the entomopathogenic fungus Beauvaria bassiana.

Organic agriculture is a modern form of land management, and furthermore of land use, performing many positive environmental services. The conservation and expansion of agroforestry systems adapted to coffee cultivation makes an important contribution to erosion control and soil preservation, water pollution control, the conservation and encouragement of biodiversity and forest conservation in the tropics.

What Makes Coffee Organic?

Coffee certified by the Rainforest Alliance cannot be sold either in the U.S. or Europe as organic coffee. Organic coffee must comply with specific requirements. For example, the EU, U.S., Japan and some other countries have set down legal definitions of the minimum requirements all organic products must comply with. Civil organic associations and certifiers have also established requirements even more exhaustive than state legislation. Naturland (www.naturland.de), one of the major certifiers of organic coffee, for example, has developed its own standards for permanent tropical crops. Here is an excerpt of its list of criteria:

* No synthetic fertilizers or pesticides

* The intensity of the cultivation system chosen is directly related to prevalent ecological conditions. For example, it is forbidden for coffee shrubs to be planted so densely that they restrict the growth of shade trees

* Shade trees, comprising diverse tree species, including indigenous and leguminous trees too, are to be integrated into the cultivation system

* Erosion control measures appropriate to the local geography

* Soil coverage with leaf litter from shade trees and greening with legumes and herbs

* Coffee pulp has to be composted so that nutrients can be recycled and returned to the system

* After wet processing, the waste water has to be purified

* The traceability of the product must be guaranteed and appropriate records kept

* The producers and processors of organic coffee certified by Naturland have to adhere to its social standards.

Organic Coffee and The Quality of Coffee

Organic certification is process certification guaranteeing that the goods certified have been organically produced and processed, from production to import, down the whole value chain. However, coffee certified organic does not necessarily mean the quality of the coffee is excellent or even good. Nevertheless, many growers of organic coffee have proven that they are capable of producing outstanding coffee qualities and specialty coffees too.

One reason for the quality consciousness of many organic coffee farmers is a result of the stringent demands organic certifiers make of them regarding quality assurance. One essential prerequisite for organic certification is the uninterrupted traceability of the products down the whole value chain. Measures taken to ensure this include: labelling the bags with a farm code; clear separation of organic from non-organic goods at every stage, from buying, storage and transport to processing; and buying up only in accordance with the Approved Farmers' List.

Besides this, coffee can only be declared organic after a general conversion period of three years. During that period, for example, smallholder cooperatives have to put an efficient internal control system in place, which is inspected regularly by external bodies, to determine if it is working well. For many smallholder cooperatives this poses a great challenge for which they require advice and training. However, this serves to instil in them a feeling for and an awareness of the quality of their coffee. Besides this, during this conversion period they can establish the organization necessary to provide successful advisory services and further training in these fields.

In short, organic coffee fulfils the best requirements for the production of good to outstanding coffee qualities. It can be assumed that the demand for organic coffee will continue to grow in the wake of the dynamic growth of the organic market. Good to excellent coffee qualities combined with organic certification should also yield bright prospects of attaining good market prices. Table 2: Costs for external inspection for small-scale Naturland farmers, who have established an Internal Control System Country Number of Naturland Costs for external

farmers Inspection in USD Bolivia 2,133 32,362 Guatemala 1,896 10,197 Mexico 4,590 38,077 Nicaragua 120 4,711 Peru 10,781 84,426 TOTAL 19,520 169,773 Country Costs per farmer for

external inspection in

USD Bolivia 15.2 Guatemala 5.4 Mexico 8.3 Nicaragua 39.3 Peru 7.8 TOTAL 8.7 How do Naturland Coffee Farmers Control the Coffee Berry Borer? Other methods 1% Cultural Control and 33% Biological Control Biological Control 24% Cultural Control only 33% No Control at all 9% Note: Table made from pie chart. Development of organic markets worldwide: sales volume 1997 10,0 2000 16,0 2001 19,0 2002 23,0 2005 33,0 Minou Yussefi y Helga Willer. The World of Organic Agricultural--Statistics and Emerging Trends 2007 Note: Table made from bar graph. Market Share of Organic Coffee Denmark 2,8% Switzerland 2,4% Austria 2,0% France / Germany 1,2% USA / Canada 1,1% Sweden / Great Britain 1,0% Finland / Italy 0,9% Netherlands 0,8% Spain 0,7% Japan 0,5% Brazil 0,2% Source: Coffee Guide International Trade Center Geneva, 2003 Note: Table made from bar graph.