Agri Business

India emerging a certified coffee hub

A. Srinivas Bangalore | Updated on January 27, 2011 Published on January 11, 2011

Certified coffee is emerging as a global trend, with major roasters planning to set aside 25 per cent of their budgets over the next 3-4 years. Major buyers in India are Swiss and Belgian roasters, apart from US-based Sara Lee.

Nespresso, which currently sources about 1,500 tonnes of certified coffee from India annually, is looking to increase this ten-fold, in view of India's diverse tree cover and habitat which render it an advantageous region for certified coffee, industry sources said. The output crisis in Central America has added to India's appeal, they said.

‘Marketing tool'

Mr Rajeev Gupta, head of exports, ABC, said: “Certified coffees have become a marketing tool for the marketers/roasters to communicate to consumers that coffees have been produced in a responsible way and the people lower most in the chain have been taken care of. For this, the roasters are willing to pay a premium. Marketing ability would play a bigger role in the sales of certified coffee, when supplies increase substantially.”

According to industry sources, the final goal is to turn all coffee into certified so that coffee roasters do not suffer the kind of embarrassment that a major shoe manufacturer went through over alleged sweat shop conditions. In the event of any controversy, the roasters can pass the blame on to certifying agencies.

Ms Sunalini Menon, CEO, Coffee Labs Private Ltd, said: “Certification should be seen as a process of systems improvement, encompassing crop management, processing and documentation practices. This leads to a higher proportion of quality coffees produced from an estate.”

On how certification will shape up if export houses stop extending support in terms of sharing costs and buying growers' produce, Dr Philippe Vaast, a project leader with the CAFNET programme, said: “The scheme of financial assistance to help certify wasn't there in Central America. In spite of that, 50 per cent of the coffee area of Costa Rica is certified, and in Nicaragua and Guatemala it is probably in the range of 15-20 per cent but growing. So, it doesn't look like the cost of certification is such a difficulty for those farmers.”

Dr Vaast elaborated: “One of the keys to the expansion of sustainable coffee in India is cooperatives. There aren't many cooperatives, especially in the Kodagu region. Certified coffee is confined to the very large, corporate coffee producer. But it also started this way in other parts. In Central America, it was large farms, except for organic, that started the certification process, and now we have gone up to a stage where certified coffee farmers in Costa Rica are small, medium and large.”

Prof C. G. Kushalappa, Professor, University of Agriculture Sciences, Ponnampet, and a coordinator in the CAFNET programme, said: “After a support period of three years, farmers will realise the benefits, as in Costa Rica and Kenya where growers bear the costs. Certification will work to the benefit of small growers if they organise themselves into groups.”

Dr Kushalappa said: “The challenge with respect to small farmers is book-keeping. Internal audits can help improve production.”

On its potential, he said: “Some certificates can be used for tourism purposes. The only way to get the young generation back into farming is to do it as an agri-business.”

Dr Kushalappa, however, observed: “There has been a shift from shade coffee to sun coffee in Kodagu. There is a loss of native trees and their replacement with silver oak.”

Medium and large growers are sceptical of the economic benefits of certifying coffee, not appreciating the medium-to-long-term gains in terms of systems improvement, industry sources said.

Eco-labels such as Rainforest Alliance, UTZ, Fairtrade, Organic, Nespresso, Starbucks, among others, need to be adapted to the ecological and social environment, Dr Vaast said.

“In India, we need to go a bit higher than in terms of tree diversity. The norms applicable to South America may not hold true here,” Dr Vaast said.

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Published on January 11, 2011
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