>> Kevin Check: Good afternoon

and welcome to today's

Global Hot Spots lecture.

My name is Kevin Check.

I'm Senior Director of School

and College Relations at the

Wisconsin Alumni Association.

We're very pleased to continue

to bring this great programming

to you in partnership with the

Division of International

Studies and PLATO

and Continuing Studies.

Today we welcome as our speaker

Jeremy Weber who graciously

agreed to step in for our

originally scheduled speaker,

Brad Barham, a professor of Ag

and Applied Economics who

happens to be starting a new

project in Bolivia.

And Jeremy tells me that he was

communicating with him

this morning in Bolivia.

Jeremy is a PhD candidate

in the Agricultural and

Applied Economics Department

here at UW Madison.

His research covers development

and conservation themes and has

involved projects in Mexico,

Brazil and Peru.

He began studying fair trade

organic coffee arrangements with

a Fulbright grant in Peru in

2005, and has since continued to

explore economics issues

surrounding coffee growing

households.

His dissertation studies the

uneven diffusion of an

innovative pruning practice

among coffee growers in central

Peru.

Please join me in welcoming

Jeremy Weber as he presents

"Is Organic Fair Trade

Agriculture Sustainable?

Observations of Coffee Growing

in Mexico and Peru."

( applause )

>> Jeremy Weber: Thank you,

Kevin, and thank you all

for coming out.

What I'm going to present draws

on several different projects

that have involved a number of

people.

And those projects have been

more narrowly focused.

Brad and I and some others have

looked at schooling outcomes in

coffee growing households in

southern Mexico.

I'm looking at technology in

Peru.

But Brad's a big picture guy,

and he said why don't we take

this opportunity to take a step

back from our narrow focus and

look at some of the broader

themes, some of the comparative

differences between the areas

that we're working and try to

draw some conclusions and

comment on those differences.

So that's the fruit of this

lecture.

The topic of economic scarcity

and economic growth and its

relationship to the environment

is certainly a relevant one

today and that's, I think,

brought out by this quote that

Bill Gates made a couple weeks

ago at the World Food Symposium.

He says, "Environmentalists are

standing in the way of feeding

humanity through their

opposition to biotechnology,

farm chemicals and nitrogen

fertilizer."

I think what this quote really

says or what it shows is the

status of the debate surrounding

economics and the environment.

And I think that the structure

of that debate is one where you

have two poles, one where people

have significant faith in the

ability of technology to resolve

problems of scarcity and also

environmental problems as they

may arise, and then at the other

pole, a group of people that are

very wary of technology and are

environmental purists in

thinking that there's really

only one platform or one way of

producing that's compatible with

environmental sustainability.

And what I'm going to talk about

today and the information that

I'm going to bring to bare on

this argument I think presents a

much more nuanced perspective

and says both of those camps

probably don't have it quite

right and that the details of

these problems that we're

talking about are going to show

why those two ways probably

are not a good way of thinking

about this problem.

Coffee is a great product to

look at when thinking about

issues of the environment and

issues of economics and welfare

and livelihoods.

Latin America, in particular,

has many households, rural

households, that depend upon

growing coffee for their

livelihoods.

And those coffee farms are

located in areas that often are

biodiversity hot spots.

Think of cloud forests, think of

this is the transition zone from

the highlands of the Andes

Mountains into the lowland

tropical area.

In between is this area called,

in some regions, the brow of the

jungle.

This is elevations about 1,000

to 2,000-meters above sea level.

Because slight changes in

elevations are associated with

different microclimates,

different plants and animals.

And this is where coffee is

being grown.

I'm going to start out focusing

on Peru and looking at two

different platforms for growing

coffee both of which have

environmental concerns

integrated into them.

And this is going to be a

broader picture of two different

approaches to growing

sustainable coffee, and then I'm

going to focus in on the

economic side of it.

That is, the economics driving

the livelihoods that households

are able to earn by growing

coffee and I'm going to first

look at southern Mexico and, in

particular, fair trade and

organic growers there,

and then go back into Peru.

The organic certification, and

here I'm just going to focus in

on organic and not fair trade,

but the organic certification is

one where I think many consumers

associate it with, if you want

to be environmentally

responsible, you buy a product

that has an organic label.

Other things are maybe not going

to get the job done.

There's a lot of faith placed on

organic being the best way to

maintain the integrity of the

ecosystems where the product is

being produced.

But there are a number of

competing certifications out

there, especially in the case of

coffee, and some of these

certification may be

complementary to each other and

others may be competing in a

sense that they're offering a

different way, a different set

of standards to ensure the same

outcomes.

So we have the fair trade

certification which is a little

more socially oriented and

that's paired recently with the

organic and in the market now

you see a lot of fair trade

organic labeled coffee.

But they are separate

certifications with different

standards and norms.

But then we have the Rainforest

Alliance is a group that has

created the sustainable

agricultural certification, and

you can see this in your

supermarkets oftentimes,

especially in the coffee aisle,

when a bag that has a label with

a little green frog on the

label.

And then Utz Kapeh, which

I think is good coffee in Mayan,

is again another approach,

another certification out there

that says these norms are

consistent with environmental

sustainability.

The Smithsonian Institute

oversees a bird-friendly

certification, and then there's

an industry set of practices

known as cafe practices that's

another label that's thrown on

coffee.

So a natural question is are

these labels all doing the same

thing?

Does organic, is that really the

only way to go to maintain the

integrity of ecosystems in

coffee growing communities?

To answer this question or to

discuss it a little more

thoroughly, I'm going to look at

a case of certified growing in

central Peru, we're in the

department of Junin.

"Department," maybe I should

have translated that,

and just put state.

But department is equivalent

to a state.

So in the state of Junin.

This is in central Peru.

If you can see on the coast of

Peru, here we've got this

different colored, this

geographic map here that shows

the Andes Mountains and then

coming down into the eastern

side of the Andes Mountains in

this lighter green area is where

that brow of the jungle, that

cloud forest area, and that's

where most of coffee is produced

in Peru.

And this specific region of

central Peru is the coffee

growing region, the capital, the

coffee capital of Peru.

Coffee is also grown in the

south coming down from Cusco,

it's also grown in the north.

But the industry is the best

organized and the strongest and

there's most production from

central Peru and specifically

this region.

It's a beautiful region.

In fact, Brad took this photo

this summer as we were kind of

wandering through the area

visiting these different

growers.

In this area, two privates

companies got together and

decided to fund a coffee

development project.

The two companies were Lavazza,

which is a large Italian

roaster, and Volcafe, which is a

coffee and trading company, and

they had the goal of, a very

broad goal, of improving the

economic and environmental

sustainability of these

communities of small scale

coffee growers in several

communities in Junin.

One of the components of the

project focused on certifying

growers and integrating them

into markets, export markets,

that would pay premiums for that

certification.

And the main certification that

they've been working with is the

Rainforest Alliance sustainable

certification, but they've also

worked with the organic norms

and with Utz Kapeh, and so it

provides a good case study of

comparing these different

platforms for growing coffee.

Now when we go to compare these

different certifications,

it's a bit tricky because

if you go, say, to the website

of one organic certifier,

there are several,

many certifiers,

and you look well what are the

norms that I would have to abide

by to be certified, and you

would find a document that would

look like something that a

lawyer wrote for other lawyers.

Very complicated language,

large document, many pages, and

growers don't read these

documents when they go to enter

certification programs.

There are extension agents,

either as part of a coffee

cooperative or in this case an

NGO, that try to translate these

norms into activities that

they're going to promote among

farmers, and they're going to

say after kind of reading this

document and talking with this

certifier these are basically

the things that you need to do

in order to receive this

certification.

And that's a little bit

different from kind of taking

the document and analyzing it

from a legal perspective as

could you get away with this or

not.

And this comparison is based on

not going to the document but

going to the extension agents

who work with the growers and

say what are the main

differences when you're

implementing the sustainable or

organic program.

I'll start first with the

sustainable.

The norms are very much applied

to the entire property.

So if you've only got coffee on

a corner and on a far other

corner you've got something else

going on, it doesn't matter, all

of that falls into the norms.

And there is equal focus on all

of those areas.

It's not that we look at your

coffee and we kind of pay

attention to the rest, but not

really.

In the case of sustainable, it's

very important, the entire

property.

No forbidden agrochemicals.

So some agrochemicals are

permitted.

There's a green colored band of

products that Rainforest had

said that these, when used

right, have no environmental

negative effects.

So of course a key word is used

right, so there's significant

standards that deal with how

those chemicals are applied,

where they're stored, do the

people applying them know how to

apply them.

And then socially Rainforest

is pretty robust.

They want to make sure that the

coffee growing household has a

working latrine.

They want to make sure that

workers who come to work on that

farm also have access to a

latrine.

For women in the household that

are working in the kitchen also

cooking over wood, there needs

to be a chimney.

There needs to be good

ventilation within the kitchen

so that the health of women is

not being affected.

Clean water, the household needs

to be getting potable water

into it.

Workers, if they're hiring in

workers, there needs to be wage

policies and what to do if

somebody gets sick.

There needs to be a formal

policy of what to do in

different situations.

Waste water is a big deal and

improper treatment of it is a

sure way to not get the

certification.

And that's waste water that's

coming from processing coffee

but also waste water that's

coming from the house.

Reforesting is a big issue.

If coffee on one corner and on

the far other corner, you've

clear cut that a couple years

ago and it's degraded, the

certifier's going to say we need

to come up with a reforestation

plan to recuperate or recover

that degraded area.

And water sources, this is a big

deal, as coffee growing

households or coffee farms are

oftentimes located in the higher

reaches of watersheds,

Rainforest certifiers pay much

attention to nearby creeks and

is there erosion that's

happening, is there proper

buffers to protect against

kind of heavy rains,

or anything like that.

Now moving over to the organic

side, and again right now

I'm only talking about organic,

not the joint organic fair trade

arrangement that is common

to see.

The norms are primarily focused

on the crop that's being

certified.

The other crops also fall into,

the norms apply to the other

crops.

But it varies a bit.

You can have a conventional

field nearby and you have plans

to eventually convert it to

organic and that needs to be

explicit, but the focus is on

if we're going to certify your

coffee this year, that this

coffee is free of agrochemicals

which is the second issue here.

And then the third issue, and

this is really, I think, a core

aspect of the organic

certification, and that is

contamination of foreign

materials either from other

activities on the farm or from

neighboring farms.

There's a transition period

between when I enter an organic

program and when I can start

selling my coffee as certified

organic.

Again this is dealing with the

idea that if you've applied

agrochemicals in the past,

we want to give time for them

to be processed through the soil

and to disappear before we're

going to allow you

to sell your coffee as organic.

Traceability is also a big

issue.

When the coffee leaves your

field, where is it being stored

when it's harvested,

and on the farm.

Is that a clean environment?

When it goes to a processing

plant, what treatment is it

getting there?

So I think it comes out clear

that a big focus is kind of

keeping coffee clean, keeping it

from being contaminated by other

sources.

Whereas with the sustainable,

it's a much broader set of goals

and standards.

The entire property,

reforesting.

And it's not that the organic

and the norms doesn't mention

not cutting down forests and

these other issues, but again,

this is coming from people who

work with, translate those

complicated documents into

advice, recommendations for the

farmers what want to get

certified.

What is it that you most need to

pay attention to for the

certifier at the end of the day

to say okay, looks good enough

or it fulfills the most critical

requirements for certification.

Because the sustainable norms

are much broader, they can serve

as a base for then launching

into an organic program, with

the only exception being that if

you're applying the permitted

agrochemicals under the

sustainable, you would have to

change that to go organic.

It would be much more difficult

to be certified organic and then

expect that you would just need

to do some paper work to get the

sustainable certification.

Most likely you wouldn't be

treating the waste water from,

or in the case of this group of

growers in central Peru, you

wouldn't be treating the waste

water from the house.

You wouldn't have a chimney.

May or may not have

an acceptable latrine.

So there would be a lot of

things that you would need to do

to go from organic to

sustainable.

But not so much the other way

around.

What are some of the possible

issues that extension agents and

people working on the ground and

agronomists have noticed with

the organic norms?

One concern is that the amount

of organic fertilizer that's

available at any given time or

when the farmers need it,

is oftentimes very limited

or costly.

And so farmers, oftentimes, are

not appropriately or providing

enough fertilizer to replace the

nutrients that are being taken

out from the plant.

And so you have this what's been

known as soil mining where over

time, the rate at which

nutrients are being taken out

is exceeding the rate

at which those nutrients

are being replaced.

And one reason is that organic

fertilizer, for example, the

pulp that comes from processing

the coffee cherries, that's used

as an organic fertilizer, that's

not the same as getting a

synthetic pellet that has just

the right mix of nitrogen,

phosphorous and potassium.

This is a much more specific

targeted input.

Whereas with the pulp, there's

organic material there and

there's some nitrogen, but is it

enough, is it in the right mixes

so that it's going to be

efficiently utilized by the

plant?

Probably not.

And then this issue,

substituting herbicides with

other capital inputs, came up

when I was visiting a farmer in

Peru this summer and he had

bought a weed whacker to deal

with the weeds that would grow

up, and this is a major task for

coffee growers to keep their

fields clean.

And so instead of applying a

herbicide, which would break

down in the soil and which would

keep the ground free of weeds,

he was going through with his

weed whacker every now and then.

And I'm thinking well I'm not

convinced that we've come out

ahead with this, because that

weed whacker is using, it's not

very clean, there's certainly

noise pollution associated with

it.

It doesn't do as good a job

as the herbicide would.

So are we better off

environmentally?

And that's a question I want to

leave you with and that's a

question that needs a lot of

research that has not been done

in a thorough, rigorous way.

And that is, given these

different norms, what type of

environmental outcomes

are we seeing?

And this is a point that I want

to hit on more in the

conclusion, and that is,

it's not enough just to say

we've certified growers, we've

certified so many growers in the

head waters of the Amazon so

we're protecting the ecosystem.

Well, I want to know,

well what's changed?

If before they weren't certified

and now they are, does that mean

that we could go and see that

the quality of the water that's

coming out of those watersheds

is better?

Does that mean that there's more

bird species because of the

shade cover?

I want to see some quantitative

evidence that there's

improvements as opposed to just

saying, well, they're certified

so we know everything's okay.

This is a picture that I think

this is the only time Brad's

going to appear in this

presentation.

Here he is, we're meeting with a

grower that is under the

sustainable group or working

with the sustainable

certification in Peru.

And this is a what it says here

in Spanish is a biological

micro-corridor conservation of a

water resource.

Now this is a creek that runs

along the side of this

gentleman's property, and you

can see that there's quite a bit

of vegetation here.

And that wasn't the case a

couple of years ago.

And this is a change that's been

brought about because the

certifier says you have a

waterway over there, we need to

see that that buffer zone around

it is there and is protecting.

And also, for example, the steps

going up from across the creek

and then up over the hill are

terraced.

Before, without those there, you

get a heavy rain and that water

has nothing to slow it down and

it's going to carve a big ravine

right down into the creek.

So that would be something else

that he would probably do

as part of fulfilling

the sustainable norms.

Uh-oh, I'm cut off

up at the top.

Anyway, so that's a very broad

brush picture of the organic,

sustainable or other

certifications issued.

And I think the thing to keep in

mind is that it's not clear that

organic is promoting

environmental sustainability

better than alternative

programs.

And that's really something that

needs to be researched better.

Because there certainly are

alternatives that may be doing a

better job.

We're not sure.

Moving on to the economic side.

What do growers get out of

participating in these certified

programs?

So you have to not use

agrochemicals or maybe you have

to put a chimney in, or do

any number of things, how is

that fitting in to your overall

economic well-being?

To look at this for the case of

fair trade organic markets,

we're going to southern Mexico.

Southern Mexico is a region

that's been at the forefront of

the growth and fair trade and

organic markets from the

beginning.

We're using information from a

survey of 845 coffee growing

households randomly selected

from Oaxaca and Chiapas, these

are two states in southern

Mexico.

The data collection was

supported by the Rockefeller

Foundation.

In this data set, if you're

participating in fair trade, you

generally are also participating

in organic markets and you are

also a member of a cooperative.

So these three kind of concepts

are merged together in the case

of southern Mexico.

We have in the sample

357 conventional growers.

These are growers who are

generally not a part of a

cooperative, they're not a part

of fair trade organic.

And then within fair trade,

we have 417 organic, this is

they've passed that transition

period, generally three years,

and now can sell their coffee

as certified organic.

And then there's 71 growers who

are in transition to receiving

organic certification.

And again, both of these groups

would be working under the fair

trade, working with fair trade

arrangements.

To give you a sense of

the economic contents of these

households, the percents on the

outside of the circle represent

the number of households that

are deriving some income from

that income source.

For example, 96% of households

have some positive income from

coffee.

Which isn't surprising because

we're sampling coffee growing

households.

About a third of households are

having remittances.

They're participating in this

exodus of labor northwards,

sending a family member there

and getting remittances in

return.

Subsidies are also something

that's prevalent for many

households, as well as

nonagricultural activities.

This would be working for a wage

in a local job.

Now the inside percents

in the distribution of the pie

represents how important,

for the average household,

is that income source.

So we see here remittances are

by far what dominate the incomes

for these households.

Which is interesting because

there are only 35% of the

households that are getting any

remittance.

So that means those households

that are getting remittances

are getting quite a bit.

And then next we have subsidies,

these would be several kind of

support programs for coffee

growers that the Mexican

government has and that's on par

with the amount of actual income

that coffee growers make

by growing and selling coffee.

And then just behind is

nonagricultural activities.

So a point that I want to drive

home is that these households

have a lot going on.

They're participating in

migration networks, they're

participating in government

programs, they're participating

in the non-coffee local economy.

And I'm going to later contrast

this with the case of central

Peru.

How much are these growers

earning from coffee?

So if we look at what's the

average net revenue, this is

their total sales of coffee

minus their cash costs, that

would be either for hired labor

or for any purchased inputs.

If we break that down by

certification status, we see

that these conventional growers,

things are not going well

for them.

Certainly in comparison to the

transition growers who have more

than double the net revenue of

conventional growers per

hectare.

And then organic growers are

slightly behind the transition

growers.

What's driving these

differences?

This is a big question because

if we think about why are some

coffee growing households poor,

and some less poor,

or maybe doing all right,

we've got to understand

where these differences

are coming from.

Are they coming from the prices

that these growers are receiving

for their coffee?

Or are they coming from how much

coffee that household is able to

produce on their given land

with their given plants?

If we look at prices received

we see, as we would expect, that

the conventional are getting

slightly lower prices than the

transition who have access to

the fair trade but cannot yet

sell their coffee as organic.

And they're not doing as well

as the organic, which can sell

their coffee with fair trade

certification and with the

organic certification.

So the differences are about,

we've got 67 cents

for the conventional,

about 78 cents,

and then about 83 cents

for the organic growers.

Productivity.

This is how many kilograms of

coffee these growers are getting

out of their land.

The conventional growers

are lagging far behind.

They're only about 175 kilos

per hectare.

And the transition growers have

about twice that and then the

organics again are a little bit

behind that.

A key question, as I mentioned

before, what is causing these

productivity differences?

Is this because the organic

norms, there's something about

them that raises the

productivity of coffee growers?

Or perhaps, the type of growers

who decide to go organic and

participate in cooperatives,

they had higher productivity

beforehand, that's the type of

growers, and so then higher

productivity growers are the

ones who select into the organic

and fair trade markets.

So in other words, the organic

and fair trade markets are

drawing in the more progressive,

more productive farmers.

We're not sure.

In other words, we can't say

that participating in a

cooperative or participating in

organic fair trade causes

increases in productivity.

All we can really say is that

this productivity difference

exists, and the point that this

next slide makes, it's what's

causing differences, most of the

differences, in income among

groups of growers.

This is a thought experiment to

help drive that point home.

Conventional coffee grower

net revenue on average

is about $203.

If we keep everything else the

same and we just say

conventional grower we're going

to give you the price that a

transitional grower receives,

how much will your net revenue

per hectare increase?

And it's going to increase

to $247.

So yes, there's an income

increase associated with selling

to fair trade.

That's clear.

But let's say now we give you

the conventional market price,

you as a conventional grower,

but we're going to give you the

productivity of a transition

grower.

Suddenly, still getting the

conventional price but getting

the productivity of a transition

grower, the income goes up

by up to $398.

Basically doubles their income.

Whereas it's only increasing it

by about 20% in the case of the

prices.

And then this is the actual

transition net revenue.

So if we just gave them the same

productivity as the transition

group we would bring them pretty

close to making about the same

amount of money as the

transition growers.

If we go back to this question

of fair trade organic,

is this improving livelihoods

in southern Mexico?

It's difficult to say because

we're not sure if that's the

cause of these productivity

differences.

But what we can say is that

coffee is really just one

activity in the mix of several

that these households are

pursuing.

Including migration networks and

getting remittances, subsidies

and non-ag income.

We can also say that the higher

prices from fair trade and

organic markets, which is

something you often hear about

in the popular press, getting

higher prices, getting a fair

price through fair trade,

is not having that big

of an effect on income.

Or at least it's not having

nearly as big of an effect

as productivity is having.

But an important question is how

generalizable are these results?

Do we observe this finding

that the productivity effect

dominates the income effect

from certification premiums?

Do we see that

in other countries?

And to answer that question

we're going to dive now, we're

going to return to central Peru,

where in the sample of growers

that we're looking at,

they had, this is pounds

of coffee per hectare.

So the top row is for our sample

of about 200 growers, how many

pounds of coffee were they

producing per hectare?

And this is for the state of

Junin, and the two match

each other pretty well.

And then here, we see our sample

from Oaxaca, our sample from

Chiapas, and then later what are

the state numbers for those

areas.

And it should stand out right

away that both the department of

Junin and the growers in our

sample have doubled the

productivity of growers

from the Mexico sample.

And the Chiapas growers are

under the average for their

state, whereas the growers from

Oaxaca are about on par.

Now if we go forward in time,

that's in 2005 when the Mexico

data was collected, if we go

forward in time, we don't have

data for 2008 from these

specific growers in Mexico,

but we do have from those states

and we can see that Junin and

the Peruvian sample is now

four times, in the case of

Oaxaca versus central Peru,

central Peru is growing four

times the amount of coffee for

the same amount of land.

And if we compare from 2008 to

2005 in different places,

the differences are striking.

And those circles draw that out.

So now let's take a little more

detailed look at these different

growers and different countries.

So here in this column

we're looking at

just the organic growers.

Now these are organic and also

fair trade growers because

the two are joined together

in the case of southern Mexico.

And then these are the

sustainable growers in Peru.

Sustainable growers are a little

bigger, that's not super

interesting.

This is an interesting

statistic.

The coffee growers, the organic

coffee growers in Mexico are

only getting about a third of

their income from coffee.

Again, it's just one activity

in the mix of many.

In the case of the Peru, they're

getting most of their income

from coffee.

Coffee is what determines what

they can consume in a year.

Now, let's take a look at

incomes.

In terms of productivity, we're

seeing that growers in Mexico in

2005, organic growers, have a

much lower productivity than the

sustainable growers in Peru.

Sustainable growers in Peru have

about four times that

of the organic growers.

Correspondingly, growers in Peru

have about four times the net

revenue per hectare as

the organic growers in Mexico.

So this is consistent with our

comparisons between transition

and organic growers in

conventional grower incomes, and

we're finding that really it's

about productivity, that's

what's driving differences

in net revenues.

And when we compare between the

organic growers in Mexico

and the growers in Peru

we also find that.

That the differences in income

between these groups is

an artifact of how much coffee

they're able to get

out of a given amount of land.

How much are these growers in

Peru, how much of their increase

in revenue comes from getting a

premium for being certified?

Here we see this is the premium

in US dollars per pound in 2007

and 2008 for growers that sold

to their cooperative in the

project.

It's about 7-cents in 2007

and about half that in 2008.

And that translated in 2007

about an additional $147

in income for those growers.

But that additional, that

increase in income from selling

to a higher valued market

per hectare was pretty small and

really only represents about 3%

of the net revenue per hectare.

So it's really not about prices.

At least for these growers.

And it seems to be the case

in Mexico as well.

That it's not prices that drive

the differences in income,

it's productivity.

And productivity is something

that this project in central

Peru focused on.

The project, Proyecto Teirra,

Project Land,

didn't just focus on, we want

to certify you to get a higher

price and that will solve your

livelihood issues.

They also said you know what,

it's really important that these

farmers are managing their

resources well, that they're

getting the most out of their

plants, that they're keeping

track of their costs, keeping

track of productivity and

managing it like a business.

And one practice that they

introduced to further these

goals was systematic pruning.

This is where a grower

cuts his tree off,

now a coffee tree can grow

up about--

If you let it go, it can grow

quite tall.

And he cuts it off

at about a meter in height

or about waist height,

and he does that to a section of

his farm each year in a rotating

fashion.

And the idea is that you can

stabilize production

through that practice.

Stabilize and increase because

when you prune the plant

it stimulates the plant to fill

out, to produce more branches

and leaves from which then

lots of berries come forth.

And this is very important

because the growers in central

Peru, they had older trees.

And as trees get older, their

productivity drops dramatically.

Systematic pruning, in effect,

gets an older plant to produce

like a new one.

But growers, before I get into

this, the growers in this

project were initially

very skeptical of this idea.

They're deriving their

livelihoods, most of their

income, as I showed before, is

coming from coffee growing.

What happens if I cut my plants

down?

This is ludicrous they said.

In one case, the agronomist in

the project came into a

community and said we're going

to cut your plants down and they

kicked him out.

They wouldn't let him finish the

meeting.

They said this is crazy.

In another case, it's a great

story that some growers like to

tell, is that there was one guy

who was thinking this might

work.

He was thinking about it.

And his wife said if you cut our

plants down I am leaving you.

You do not touch our plants.

And I think that gives you the

sense these are households that

are dependent on coffee, this

idea seemed very risky.

You're cutting your plant down.

And, in fact, you don't get

production from the plant in the

following year, it's only

in the year afterwards

when it comes back.

So there is that year in which

if you don't have much savings

to go on maybe you can't make

that jump; maybe you can't deal

with that short drop in income.

How much production or how does

the pruning affect yields?

This is just a statistical

exercise that I did where I

looked at changes in yield,

that's kilograms of coffee per

hectare, between 2008 and 2009,

controlling for what your change

in yields were last year and

then whether or not you pruned

in 2006, 2007 and 2008.

The way to interpret these

numbers is that if I pruned in

2006 and then didn't do anything

in the following years, the

immediate effect is to decrease

my production, I'm taking that

plant out of production.

But then the following year I'm

going to get some of it back,

in fact most of it back.

And in the year afterwards

I'm going to get it back

in a big way,

about 865 kilogram increase

is what's associated with that.

So the key note here is that

this is a method that although

it lowers production initially,

it brings it back in a big way.

So I think one of the

conclusions that we can draw

or perhaps a better way to say

that is one thing that these

observations suggest is that

environmentally sound

alternatives to organic may

exist.

In fact, there may be

environmentally superior methods

but that this really needs more

evaluation of connecting

specific practices

with outcomes.

If farmers aren't allowed to use

herbicides or they're not

allowed to use synthetic

fertilizers, does soil quality

fall?

Does productivity fall?

Is there contamination?

Is there really negative effects

to using any type of

agrochemical?

Or is that perhaps a knee-jerk

extreme reaction to synthetic

inputs in general?

It comes out pretty clear.

On this side, I think that's

where Brad and I have the least

concrete information to go on.

But this is a conclusion that we

can stand behind quite firmly,

and that is the effect of

productivity on income dominates

the effect of higher prices on

income.

And now this is a provocative

point.

A passive low-intensive

management of crops, and you

could think of having an organic

system that's intense, but you

could also think, and I think

it's true for a lot of cases in

Peru especially, that organic is

associated with a passive

management of the crop.

No inputs or low inputs,

some labor spent on cleaning,

on weeding, but we're not going

to buy fertilizers, we're not

going to buy synthetic inputs,

herbicides.

That may have negative effects

on both ecosystems

and livelihoods.

Why could that be?

Why would one think that?

Well, lower productivity means

that there's less goods coming

out on the market, less coffee

on the market, that's going to

raise the price of the final

good, but it's also going to

increase demand for the raw

materials that go into making

coffee, particularly land.

If you have very low

productivity, you're getting

little coffee out of the land

that you have, to produce a lot

of coffee, you need a lot of

land.

So you bring more coffee land

into production.

So that's one mechanism

through which the organic

may have some negative

environmental consequences.

And if a household is getting

very little coffee out of the

hectares that they have,

to reach some adequate income to

meet their basic needs they may

need to expand the scale of

their operation.

Again, bringing more land into

coffee production.

Which, in the cases of, I don't

think in the case of Peru,

but in the case of Mexico,

it may mean cutting down

virgin forests or expanding

into areas where coffee

previously was not grown.

What are some recommendations or

some thoughts going forward for

what people and organizations

that are working with rural

coffee growing communities

should keep in mind?

I think an important role that

nongovernment organizations and

cooperatives could play to

increase incomes and

livelihoods, improve

livelihoods, is to perhaps shift

their focus, in some cases

obsession, on getting certified

and getting a higher price to