We have been asked this question on a number of occasions since we’ve been exporting coffee out of Timor-Leste, so let’s try to shed some light on this topic now but before we do, let’s consider a few points.
Plot size and coffee tree health
The size of a farmers’ forest (farm) and how healthy the coffee trees are within will make a significant impact on the amount of potential household income. Clearly, healthy, well-maintained trees will produce a greater yield and it could be the case that a farmer with a 1-hectare farm that has been well looked after can often produce more coffee than his neighbour with a 2-hectare plot which has been neglected. For this reason, a focus on coffee tree rehabilitation has been a priority for many companies here with the specific goal of increasing yield.
Selling cherry or parchment
The second variable to consider is whether or not farmers are selling coffee cherries to a wet-mill or processing coffee in their households and selling the subsequent parchment. Selling mixed grade cherries to a commercial buyer garnered a price of $0.55c to $0.60c per kilo this year whereas farmers who sold to us would have received $0.85c for their red cherry. Of course the work involved in sorting to the standard required for speciality coffee would have been very labour intensive which our increased price acknowledges.
Our price for speciality grade parchment was $4.00 this year and in comparison, commercial parchment varied from between $2.25 to $2.75. If you are curious to see what this means in a difference of quality, have a look at the video we posted on the 24th September on our Instagram account.
How much does a farmer earn through sales of coffee to Karst?
|
Parchment top seller |
Sold: 1,089kg |
Paid: $4,356 |
|
Average quantity across 144 farmers |
Sold: 244kg |
Paid: $976 |
|
Parchment lowest seller |
Sold: 35kg |
Paid: $140 |
Note: 345kg parchment needed to receive $1,380, equivalent to Timor-Leste’s yearly national minimum wage. 32 of 144 farmers earnt above this amount from sales of their coffee.
|
Cherry top seller |
Sold: 7,565kg |
Paid: $6,430.25 |
|
Average quantity across 67 farmers |
Sold: 657kg |
Paid: $558.45 |
|
Cherry lowest seller |
Sold: 23kg |
Paid: $19.55 |
Note: 1,623kg cherry needed to receive $1,380, equivalent to Timor-Leste’s yearly national minimum wage. 7 of 65 earnt above this amount through sales of their coffee.
It is worth mentioning that some farmers sold parchment in addition to their cherry and vice versa. All farmers would have also sold some lower grade coffee to commercial companies as well which would have meant an increase in income from the sale of their coffee.
Is the amount of money a farmer earns during the harvest enough to support their household for the year?
As we can see from the above figures, earnings from coffee offer a steady annual income for the minority but not yet for the majority. If a farmer is lucky enough to have 2.5 – 4 hectares of well-maintained trees, then yes, coffee can offer a decent income relative to Timor-Leste’s economy. For those farmers with 1.5 to 2.5 hectares, it’s possible to receive a modest income but only if farmers are invested in their plots and serious about maintenance and rehabilitation. For those farmers with less than 1.5 hectares, it is very difficult to earn enough money from coffee to support a household for a year and more likely than not, incomes will need to be subsidised, if possible.
Slowly but surely, some farmers are realising they cannot rely on coffee alone as their sole crop and many have diversified their earning potential through growing other crops such as vanilla and konjac.
Trying to give context to this question
It’s difficult to measure how much is ‘enough’ for a smallholder coffee farmer so one comparison that we can make to try to give some context is to consider the government’s national minimum wage as a marker for economic stability. This was set by the government here in 2011 and still stands at $115 per month ($1,380 per year). Just to be clear, we do not advocate this as a worthy salary and we hope that current campaigns will see the national minimum wage increased next year (current negotiations suggest this could be increased to $150 which is still low) but for the purposes of this article, the $115 per month baseline salary gives some context to the economical situation here in Timor-Leste.
Slow and steady improvement
There’s still a long way to go but things are moving in the right direction with regards to the earning potential of our partner farmers. Increased yields are a direct result of farmers willingness to now rehabilitate their coffee trees (this was initially met with some resistance) and as volumes have gone up each year, so has our price.
A final mention to our exceptional partner roasters who have never squeezed us down on pricing over the years. Simply put, we could not continue to come back to Timor-Leste year-on-year and continue to increase our pricing (quality dependent of course) if we were pushed down on our margins. Thanks for your support and understanding the context of Timor-Leste.