Thematic Paper | Coffee
Why is MDF involved in the Coffee Industry?
Coffee is an important cash crop for many farmers and coffee exports are a source of foreign exchange. MDF works in the coffee industry in Papua New Guinea (PNG), Sri Lanka and Timor-Leste to promote a shift from commodity grade to specialty and premium grade coffee. As global demand for coffee has grown, low-volume producers like PNG, Sri Lanka and Timor-Leste have struggled to compete in commodity-grade coffee markets with more efficient, high-volume producers such as Brazil and Vietnam.
Consistency and quality are the key requirements for specialty and premium coffees – and that entails enhanced cultivation, harvesting, processing and storage practices.
The coffee industries in each country share key characteristics: they are dominated by smallholder cultivation, productivity is declining, quality is compromised by inappropriate cultivation and processing practices and returns to smallholders are low or unstable. The intrinsic profile of their coffees, however, is sought after in speciality and premium coffee markets, which are growing. These niche but expanding markets present an opportunity for low-volume producers. Speciality and premium coffees attract premium prices. This creates incentives for coffee firms to invest in their supply chains and pay higher farm-gate prices, so long as farmers can produce a consistent quality.
MDF works with coffee firms to adopt new business models that support the upgrading of smallholder production and more quality-focused processing. This includes extension services, sourcing and processing models, processing equipment and techniques, sensory analysis, quality assurance, and hermetic storage of beans. At an industry level, MDF promotes collaboration and coordination to improve industry marketing and certification.
Over time, MDF has built up a rich experience and detailed understanding of how specialty and premium coffee market systems operate, their opportunities and constraints, and innovative solutions to improve competitiveness and inclusion. MDF is increasingly recognised as a credible, value-adding partner by industry stakeholders, which is yielding new opportunities and partnerships.
