Around the world, 2.3 million cups of coffee are consumed each minute. In Asia, where more than one third of all coffee is produced, drinking coffee has emerged as a cultural phenomenon. Early birds flock to neighbourhood kopitiams around Singapore to get their morning boost, while young professionals in Jakarta and Bangkok share lattes at the corner cafe.
Most Asians still drink instant, 3-in-1 coffee in the comfort of their homes. After all, it is the cheapest, most convenient coffee on the market. However, the flux of modernisation and proliferation of Western-style specialty coffee joints has made cafe culture a thing in Asia, especially among the urban young. Nevertheless, coffee consumption in the region has to a large extent remained authentic to its unique flavors and forms.
Coffee’s flavour profiles are often specific to the farms or estates where the coffee plants were grown—and can even show traits of their countries and regions of origin. With its mild temperatures, abundant rain, rich soil, Asia is a prime location for coffee cultivation.
Colonialism brought coffee to Asia
Like many other coffee-producing regions, Asia’s coffee history began with colonisation. From the 1600s to the 1800s, the Dutch and British introduced arabica coffee plants and other tropical commodities, such as sugar and tea, to be cultivated as cash crops. Where native farmers used to grow a variety of plants for subsistence, colonisers replaced their diverse agricultural land with large plantations under a monoculture system for the European market.
This made these places far more vulnerable to plant diseases. In 1876, a bout of coffee rust crippled Asia’s budding coffee industry, as it swept through entire arabica plantations and decimated most of the crop.
In Indonesia, an exploitative system of cheap labour known as Cultuurstelse was introduced by the Dutch East India Company. Local farmers were forced to either farm cash crops on 20 percent of their land or provide sixty days of free labour. Much like today’s coffee plantations, these workers had to meet high quotas to avoid brutal punishment. They received paltry incomes—five cents per pound of coffee—for their labour.
With Cultuurstelse, the Dutch became the world’s leading coffee producers at the time—challenging the Arab world, where commercial coffee production first took root—due to their colonisation of Java.
Coffee’s post-colonial spread in Asia
Although imperialism and colonial empires spread coffee to Asia, in some places the cultivation and consumption of coffee took off much later and for different reasons. Many farmers in Myanmar and Thailand had been growing opium poppy before they were introduced to coffee as a less precarious trade. The rulers of both countries hoped that the agricultural shift towards more sustainable cash crops would bring more stability and prosperity to the region.
Meanwhile, Vietnamese coffee only appeared on the global map after the government had liberalised land ownership and invested in agricultural production under the 1980s Doi Moi reforms. Coffee exports from Vietnam boomed, and the country has adapted its style of coffee according to the times, and to its own taste. Its famous egg coffee, for example, came out of a wartime milk shortage in 1946.
Asia’s poorest produce; wealthier Westerners consume
Coffee is grown in more than 20 countries that make up the Bean Belt, a horizontal strip straddling the Equator. This tropical zone is ideal for growing coffee, and it links producing countries —largely concentrated in the Global South—to consuming countries in the Global North. After Brazil, which leads the pack in coffee production for both the arabica and robusta species, Vietnam and Indonesia produce the most coffee for the world. Coffee is also grown in Malaysia, India, the Philippines, Papua New Guinea, Thailand, and Laos.
Almost 75 percent of global coffee production is exported to the international market. While the global coffee supply chain begins in many labour-abundant countries in Asia, most of the coffee grown there is consumed elsewhere. The United States, Germany, Japan, and France are among the biggest importers of coffee.
As roasters and retailers profit, farmers see deficits
Although Asia is a major coffee producer, money is rarely made at the source. Roasters and retailers in importing countries capture the lion’s share of the gross value addition and profits in the coffee supply chain. As the labour intensive stages of coffee production occur in remote areas in Asia, the more capital-intensive steps of roasting and branding coffee are typically performed once green coffee beans have been exported to more industrialised countries.
The average export value of green coffee is thought to make up less than 10 percent of the global coffee retail market, estimated at around US$200–250 billion. Roasters, retailers, and coffee shops further down the value chain profit the most from the sale of each cup. And even among them, some profit far more than others—a full 40 percent of the world’s roasted coffee is dominated by just ten roasters based in the United States and Europe.
Multinational corporations such as Nestle, Kraft General Foods, Proctor & Gamble, and Sara Lee are household names in Asia, popularly known for supplying cheap and common coffee products in supermarkets. These “Big 4” roasters purchase around half of all coffee produced worldwide.
Without market regulation, these companies are able to control the price of coffee and protect their stocks through the coffee futures market, traded on exchanges in New York and London. The prices pegged to these stock exchanges reflect the commodity, or ‘C, price of coffee, which relies heavily on speculation and is extremely volatile.
For coffee buyers, futures contracts enable them to buy huge bulks of coffee at a cheaper price than the going rate. On the flip side, small coffee farmers are forced to tank heavy losses when they make deals with giant players. Farmers have no say over when and at what price to sell their coffee. While growing global demand for coffee has funneled billions of dollars into coffee companies in the U.S. and Europe, small farmers across Asia still struggle to earn a living.
So yes—cheap instant coffee is a common fixture in many households, but it might just be the least ethical coffee to drink. Corporations aiming to make a quick buck and keep production costs low rarely take into account how the market affects farmers and others producing these coffees.
Smallholder farmers get the short end of the stick
The coffee traded on the C market is grown on approximately 12.5 million (mostly smallholder) farms. Around 84 percent of these farms are smaller than two hectares, but collectively they produce up to 73 percent of the world’s coffee. Without them, we would not be able to have coffee on the regular—or treat ourselves to diverse coffee flavours from all over.
According to the International Coffee Organisation, coffee prices in 2020 remained up to 30 percent below the average price level over the past decade. Increasingly low and volatile prices have squeezed farmer incomes so much, smallholder coffee farmers still cannot lift themselves above the poverty line even if their yields improve or if they sell coffee at a premium. At current prices, even the most efficient producers in Vietnam and Brazil are reporting thin profit margins.
As farmers struggle to access capital and infrastructure, many find it hard to innovate and become more efficient. These farmers invest in their own equipment, irrigation, land, and seeds, but face constant pressure to cut costs as global coffee prices dip.
To make matters worse, decades of deforestation from rapid, large-scale coffee farming in many Asian coffee-producing countries have eroded soils and contaminated available water resources. This not onlytaints the quality of coffee but also endangers the welfare of farmers and those who depend on the environment for their sustenance and livelihoods.
Climate threat in Asia will hurt farmers, and disrupt coffee supply
Low revenues from the international coffee trade have pushed many farmers to the city. This threatens Asia’s role as one of the world’s biggest coffee suppliers—an issue that climate change is exacerbating even now.
By 2050, climate change is expected to shrink the areas suitable for coffee production by half. Warmer weather invites more pests and plant diseases, making it even more challenging for farmers to keep up production.
Already, Indonesia’s farmlands yield just an estimated 800 kilograms of coffee beans per hectare compared to 2,000 kilograms in Brazil. Commercial agriculture has depleted close to half of Indonesia’s rainforest over the past three decades, with deforestation leaving lands less fertile. The country’s coffee production is among the lowest in the world. Today, Indonesian farmers survive on as little as US$1.50 a day.
While coffee drinkers worldwide are not yet feeling the knock-on effects of climate change’s supply chain pressures, producers at origin are feeling the heat. The livelihoods of smallholder farmers in Asia and across the Bean Belt are at stake. Increasingly, consumers will find lower quality coffee expensive and premium beans hard to come by.
Making Asia’s coffee scene ethical takes a whole world
Exploitation and inequality are not new in the long history of coffee in Asia. Where European colonisers once subjected farmers to harsh labour for meagre wages, today’s coffee commodity market and futures system, controlled by large Western companies, continues to exploit Asian coffee producers.
What does it take to tackle the exploitation rife in coffee supply chains? As with many of our much loved commodities, addressing the capitalistic system underlying the sector is critical for lasting and genuine change to occur. For the coffee industry to shed it’s exploitative roots, long-term changes have to occur across the industry’s institutions and norms. These reforms will also fail if farmers are not given a seat at the table.
For those who love coffee but can’t bear to get a cup at the expense of farmers worldwide, things might seem bleak. Challenging corporate control of the coffee industry is a task both massive and necessary, but here are some smaller ways individuals can hold coffee companies to account and pressure them towards increasing fairness in the industry.
What is ethical coffee, and where can I get a cup?
When we think of becoming more ethical or sustainable in our coffee choices, international certifications such as Fairtrade and Organic come to mind. These schemes assure coffee lovers that environmental and labour exploitation are not mixed into their favourite cup of joe.
However, before you beam smugly over your mindfully chosen, fair trade coffee, keep in mind that the economic benefits of producing fair trade coffee are often offset by the price farmers have to pay to get certified. The restrictions imposed by certification requirements might in some cases also raise production costs, putting impoverished farmers under even more financial pressure.
Riding the third wave with specialty coffee
So yes, certification models are flawed. But if you’re looking for more alternatives to commodity coffee, specialty coffee is where it’s at today.
Specialty coffee is usually linked to a specific region, cooperative, or farm, with carefully controlled growing conditions and methods that assure quality. Both the costs of production and a premium profit margin are factored into the selling price. This helps provide farmers with enough revenue to meet basic needs in healthcare, food, shelter, and education—even re-invest funds into their farms.
Roasters source coffee beans directly from these farmers and are intimately involved in the whole coffee process—from farming to processing and roasting. A coffee roaster who deals with the farmers directly—bypassing middlemen and certification boards—should be able to answer questions about supply chain transparency.
As with all efforts to make the coffee industry more sustainable and ethical, the specialty coffee trade is not perfect. Research on Indonesia’s specialty coffee farms reveals that producing quality coffee does not necessarily translate to higher incomes, and might instead generate more costs and risk for farmers.
Still, growing interest in high quality coffee—the Third Wave—in Asia is turning the tide against homogenised commodity coffee. Across metropolises such as Jakarta, Bangkok, and Denpasar, cafes are popping up to promote the richness of native flavours and their direct links to local farmers.
Remembering the hands that pick your coffee
So, the next time you indulge in a latte, consider the multilayered global supply chain—and the people who labour to bring your coffee from bean to cup. In their bid to improve the industry, both specialty and certified coffee are steps forward to ensuring that our love for coffee is less harmful to the land and more ethical to the people behind it.
If you’re not sure where to begin, supporting local businesses and small coffee roasters instead of large coffee chains is a good start. Some fair trade coffees and specialty cafes offer more information than others about where their beans come from, so seek them out and ask away!
Updated on 3 May, 2021, with a new section on structural change in the coffee industry.