Barriers to Entry & Encouraging Opportunities in Tech Used in Coffee

Generally speaking, small farm operations, no matter the commodity, struggle with

resource availability and barriers to entry into the market. Harvard economist Jeffrey

Sachs’ 2001 work, “Tropical Underdevelopment” examines many of the factors of

underdevelopment which constitute threats to sustainability measures for economic

viability in tropical regions. Sachs’ work found that of the five top reasons for tropical

underdevelopment, the lack of technology ranked first. At first glance, we think of tech

primarily in light of computers, phones, etc. Electronic forms of technology certainly play

a role sustainability along the supply chain it is important for those of living in consuming

nations to first take a step back and examine more foundational forms of technology in

order to gain a broader understanding of the extent of the problem. According to the

“coffee price risk Ninja”, Ryan Delany over at the Coffee Trading Academy, “The

geography is unfortunate because the conditions that are conducive to growing coffee

are also significant barriers to economic development.” This truth grossly impairs the

economic capacity of coffee producers in contrast to their temperate zone peer groups

for outputs. While the “conducive conditions” Delany speaks of are varied, today, I will

share a few, beginning with the foundational and moving towards the type of technology

that is conjured when the word is currently used.

In his writing, Delany offers insight on the most integral of tech issues...infrastructure.

This includes roadways. He discusses the impacts of what happens in tropical regions

to roadways, even when funding has been applied and utilized properly. Even when

governments appropriate funds, carry out repairs... heavy rains, winds, flooding, often

destroy what was just built. Therefore, that which was temporarily functional, safer, and

offering hope of products arriving at market with minimal or no damage, has now been

stripped away once more. Unfortunately, this is not the exception in tropical regions,

rather it a consistent threat to economic stability. As is the case with most all things, if

stability cannot be established, viability is impossible.

On the other side of the tech spectrum, there are many, many other very interesting

technological implements that can improve profitability to the farmer along the supply

chain, such as ProfilePrint’s AI based properties which test for moisture content, taste,

and density. This allows for cupping profiles of coffee before it even makes it to the cup!

This is very important to the small farm holders, as the better a Q-grade their coffees

can score, the greater the possibility of the crop being sold. Other innovations are

Sucafina’s partnership with Trade in Space to develop technology which allows for tracking of coffee through the supply chain through the use of satellite tracking. This

becomes important for many reasons, security of delivery and quality through the

shipping process are among them. It also offers the opportunity for greater transparency

as the shipments move along the supply chain.

One last fascinating development is GRAS, Global Risk Assessment Service. In this

case, a satellite is used to track tree coverage and any changes that occur over longer

periods of time, while also surveying changes due to deforestation. There are many

implications to poverty reduction for farmers in this technology, as well. Tree coverage is

important to shade grown coffees. The shade helps reduce unhealthy sun exposure to

these particular cultivars, while the falling leaves also provide much needed fertilizer for

the soil. Both of these provisions are low or no cost necessities to farmers. If

deforestation occurs, the economic impact upon small farm holders can be devastating.

Next week, we will take a peek into more factors contributing to poverty in regions of

coffee production and why they occur and how, as consuming countries, we can

encourage a way forward. It is far more complex than at first glance.

If you have any questions on this topic, please reach out and let us know. I’d love to

hear from you. Or if you have some awesome insight to tech that is out there, let me

know! I will give you shout out in future writings as it relates to the topic!

Thanks for joining us on El Camino...Happy sipping!

Ronda