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>> 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
more on management, innovation,
using the best practices, best
agronomic practices, because I
think currently that's something
that's been superseded by this
obsession with let's get you
certified and let's get you
selling, exporting, to a higher
value market.
And in some cases, cooperatives,
their extension agencies are the
people that work with their
member growers have now been
turned into agents of
certification.
All their time is spent taking
the norms that are handed down
from the certifier and going,
running around and making sure
that they can check off the
boxes.
And so they're not spending time
thinking about what are better
ways of producing, what are
agronomical practices that are
going to raise productivity.
Instead, they're thinking
what do we need to get people
to do, so that the certifier
is going to say, okay
he can sell to this market.
This role for NGOs and
cooperatives to improve the
management of coffee farms,
promote the best practices and
in that way improve the
livelihoods and the ecosystems
of these areas could be critical
because, in Latin America
especially, after the mid-'80s
the state governments in these
countries have really retreated
from extension services.
So they've, in many cases,
kind of let the especially
smaller-scale farmer
to face his fate by himself, and
that these extension services
that connect and spread
innovations and best practices
are not there anymore.
And so there needs to be some
vehicle or agents in the rural
areas that are promoting these
innovations that are going to
allow for coffee growing
households to get more out of
the plants that they have, more
out of the land that they have
and do so in a way that's not
degrading to their ecosystems.
Thank you.
And I'm looking forward
to questions.
I'm sure you have many.
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