Medium-sized farms play an important role in specialty coffee

For many consumers and industry professionals, specialty coffee and direct trade are inextricably linked. Building strong and mutually beneficial working relationships between producers and roasters is often seen as a cornerstone of establishing a truly sustainable supply chain.

So with this association between specialty coffee and direct trade, there can be a narrative of smaller-sized roasters forging long-term partnerships with smallholder producers to work closely together. Simultaneously, farmers require capital and resources to grow specialty coffee, so larger farms often have more capacity to invest in improving quality and yields.

Both of these examples are certainly true – with small and large farms playing a huge role in the global production of specialty coffee. So where does that leave medium-sized coffee producers?

To learn more, I spoke with Ana Sofía Narvaez, Relationship Builder at Caravela Coffee. Read on to find out what she had to share about the importance of medium-sized farms in specialty coffee.

You may also like our article on the reality of producing specialty coffee on very small farms.

How can we define a medium-sized coffee farm?

Categorising coffee farms of different sizes can be challenging. When it comes to smaller farms, it’s universally agreed that producers who farm areas smaller than five hectares can be defined as smallholders. This term accounts for around 95% of the world’s 12.5 million coffee farming families which contribute to 67% of global production.

Regarding areas of land larger than five hectares, however, it becomes more difficult to pinpoint exactly what size the farms are. Ultimately, it depends on the origin country itself, as scale of production is an important defining factor.

“A producer in Brazil who has a 25 ha farm is probably considered small scale,” Ana says, who is the Customer Relations Manager at Doselva – an organic spice company operating in Central America. “But in the context of Nicaragua, a farm of that size is medium. 

“However, in the context of the same country, a producer with a 200 ha farm might think that a 25 ha farm is small,” she adds.

Another useful indicator of farm size is whether a producer carries out their own post-harvest processing practices on site, including:

• Processing (such as washed, natural, honey, or more advanced techniques) and drying
• Wet milling (removing the seeds from the flesh of the coffee cherry)
• Dry milling (removing the parchment from the beans)
• Hulling, grading, and sorting 

Some smaller-scale producers may own or use micro mills, or alternatively transport their cherry to larger facilities to be processed by a third party. Medium and larger-sized farms, meanwhile, are more likely to operate or have access to bigger facilities which process and mill higher volumes of coffee.

Geographical context is still important here, however. Ana tells me that in Central America, for instance, many producers process their own coffee regardless of farm size.

Where do these farms “fit” into specialty coffee?

First and foremost, it’s incredibly important to emphasise that every farm that grows coffee scoring 80 points or over has a place in the specialty coffee industry – no matter its size or whether it processes its own coffee.

Specialty coffee often focuses primarily on smallholders – and rightly so. According to TechnoServe, more than 80% of the world’s 12.5 million coffee smallholder families live below the poverty line. Developing more long term, resilient relationships with and buying more coffee from these producers is an important step to improving their income, and thereby supporting them to increase quality and yields.

Meanwhile, it’s usually easier to see where larger farms can fit into specialty coffee. As these producers are considerably more likely to have more resources to hand and better access to capital, they can often invest more into improving the quality – or even trying new and advanced processing techniques more successfully with certain lots.

“In my experience, a producer who has a well-structured processing and drying station has a better chance of maintaining consistent quality standards with larger volumes of coffee sold as either commercial or specialty – depending on the market they operate in,” Ana tells me.

The level of coffee quality is ultimately dependent on each farm, its business goals, and access to resources and finance – so size can play an important role.

“Processing methods, weather conditions and terrain, access to technology, implementing best practices, and available varieties all need to be accounted for as well,” Ana adds. 

Given that they will have more staff, medium and larger-sized farms are more likely to be able to control and manage these different variables more effectively – and thereby increase the volumes of specialty coffee they produce.

The ultra-premium market

Producers looking to enter the ultra-premium coffee market have to continuously innovate – whether it’s honing their processing methods or planting rare varieties. Trial and error is an essential aspect of this, alongside developing a thorough understanding of farming best practices.

Innovation, however, is an investment that not all producers can afford to carry out. Compared to other businesses in the supply chain, producers don’t typically hold much capital at any given time – especially smallholder farmers. This can mean that the risk of not recouping investment is much higher for smaller-sized farms.

Medium and larger-sized farms, conversely, sell more coffee based purely on their size. In turn, they are likely to generate more money and turn a profit to invest back into their businesses – providing them with more leverage to sell coffee in the ultra-premium market.

For producers looking to market their coffees to more high-end buyers, this can be one of the most effective methods. However, medium and larger-sized farms will still inevitably grow low 80-point coffees (or even below this score), which often make up a large portion of their total production volumes.

The advantages of buying coffee from medium-sized farms

There are, of course, benefits to sourcing coffee from farms of any size, but medium and larger-sized producers will naturally sell higher volumes – and potentially a wider variety of coffees, including different varieties and processing methods. 

“These producers may also have more streamlined operations and have greater control over production costs,” Ana tells me. “They can also have better access to financing and credit for coffee production, and may have greater bargaining power when selling their coffee.”

Medium and larger-sized farms can, in theory, also implement changes to their farming practices more efficiently. The task may be too challenging (or even impossible) for some smallholders who have less access to capital, especially those who can’t risk a drop in quality or yields.

That’s not to say, however, that managing larger farms and bigger workforces isn’t difficult, too. With higher production volumes, producers need to hire more employees – including seasonal pickers – which requires more training and investment.

No matter its size, every individual coffee farm will experience its own unique challenges and advantages. And to best support the specialty coffee industry, roasters should endeavour to source coffee from a variety of producers.

But given the focus on smallholders and larger coffee farms, it can be easy to forget that medium-sized producers play an integral role in specialty coffee, too.

Enjoyed this? Then read our article on how we can improve access to finance for smallholder coffee farmers.

Photo credits: Caravela Coffee

Perfect Daily Grind

Want to read more articles like this? Sign up for our newsletter!

The post Medium-sized farms play an important role in specialty coffee appeared first on Perfect Daily Grind.