Prakruthi is working with more than 6.000 coffee farmers in South India, to improve their coffee quality and quantity in a sustainable manner. These projects empower small coffee growers by creating producer groups and facilitating UTZ and Fair-trade certification. Companies like Amalgated Bean Company (ABC), ECOM and Nedcommodities are actively involved in the projects, to create a relationship with the coffee producers at the beginning of the supply chain. This helps the companies to source certified quality coffee beans to meet their market demand. In return these companies support the farmers to produce better quality certified coffee, create a long-term relationship and earn a higher and more stable income.
Coffee is the second biggest commodity in the world after oil, and is produced in 70 tropical countries, most of it in Brazil, Colombia and Vietnam. In South India coffee is an important crop for smallholder farmers and a source of direct employment for almost half a million people. Large volumes of coffee are produced by smallholders in India. Kerala has the largest number of smallholder farmers numbering 63.000 (80% of the total small holdings in Kerala) followed by Karnataka 32.000 (60% of the total small holdings) and Tamilnadu 11.500 (35% of the total small holdings). Most of these plots are less than 5 hectares in size; as per the government’s definition these are smallholdings. Of these smallholdings 75 per cent are of less than 2 hectares in size, constituting one third of the total planted area of coffee in India.
In recent years, the international coffee market has begun to recover, as reflected in higher international prices for coffee. Nevertheless, the recovery has not led to an end of the rural poverty in the coffee producing areas. Smallholder coffee farmers and farm workers are still vulnerable to the coffee market’s price swings and the disproportionate market power of local buyers, international traders and multinational coffee companies. Research conducted in India shows that the information flow and sharing of market demands, such as quality, price, sustainability and good farm practices, is limited for smallholders. It also highlights the low level of organisation through cooperatives and other dedicated institutions hindering their representation in relevant institutions, knowledge and skill sharing and ultimately their bargaining position.
The smallholdings in India, unlike in other coffee producing regions, have been a challenge for all certification and standards setting bodies. The volumes of certified coffee coming from smallholders are very limited. There have been some attempts from Fair Trade organisations (e.g., Equal Exchange, Fair Trade Original) in India but these initiatives have been too small to have a real impact.
The reasons for the exclusion of smallholdings are a lack of smallholder organisations, the costs of improvement and certification, and low quality of coffee produced. From a sector sustainability point of view, the smallholder segment needs to be addressed with priority. Hence, the coffee program has the following components:
Strengthening small coffee growers’ organizations in India and build their capacity to improve their market position and increase and stabilize their income from coffee production
Improved competitiveness and higher income for the smallholders through access to higher-value markets by means of certification and better adherence to social and environmental standards leading to improved living and working conditions in the coffee fields.
Link up with quality coffee market in India and increase awareness and consumption of sustainable coffee.