{"id":13535,"date":"2016-11-04T17:41:31","date_gmt":"2016-11-04T21:41:31","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/juan-the-girl-and-the-beetle-how-humanity-may-run-out-of-coffee\/"},"modified":"2016-11-04T17:42:51","modified_gmt":"2016-11-04T21:42:51","slug":"juan-the-girl-and-the-beetle-how-humanity-may-run-out-of-coffee","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/juan-the-girl-and-the-beetle-how-humanity-may-run-out-of-coffee\/","title":{"rendered":"Juan, the girl and the beetle: How humanity may run out of coffee"},"content":{"rendered":"

\u00a0<\/strong><\/p>\n

Many people, including myself, would not be able to start the day without a cup of coffee. Well, there may be some bad news for us. Unfortunately, world\u2019s supply of coffee may not be able to satisfy its demand in the future. The reasons behind it: industry structure and climate change. Using the Colombian Coffee sector \u2013 one of the worldwide most recognized coffee industries \u2013 as an example, I will illustrate the industry composition, describe the impact of climate change on the sector, and explore potential solutions to the problem.<\/p>\n

As I said that industry structure is a part of the problem, let\u2019s start with some industry basics. Simplifying its chain [1], there are six important actors in Colombia\u2019s coffee sector:<\/p>\n

    \n
  1. Juan, the coffee grower*.<\/strong> One of the 500.000 small producers, owns less than 6 acres [2].\u00a0<\/strong> Juan\u2019s main challenges are coping with plagues, unpredictable weather, lack of infrastructure and very low individual negotiation power.<\/li>\n
  2. Distributors<\/strong>: Consolidates production of every Juan, test quality and send for processing. There are also input distributors selling seeds and other inputs to Juan.<\/li>\n
  3. Processors (thresh, grind, toast): <\/strong>Only Juan\u2019s good quality coffee is processed<\/li>\n
  4. Government: <\/strong>Ensures proper conditions for Juan to go to the market (e.g., infrastructure) and regulates quality and safety of Juan\u2019s product.<\/li>\n
  5. Research organizations: <\/strong>Invest in creating new kinds of seeds and processes to improve Juan\u2019s productivity. Colombia has strong research centers in coffee and agriculture (CIAT and Cenicaf\u00e9).<\/li>\n
  6. Coffee growers\u2019 association: <\/strong>Defends Juan\u2019s interests, supports his commercial efforts and shares best practices [3]. The Colombian Coffee Growers Federation (FNC) is one of the most important organizations in Colombia.<\/li>\n<\/ol>\n

    One of the main challenges of the industry is to implement at scale. Recently, the industry had to deal with a decrease in production due to the excess in precipitation, producing 32% less coffee in 2009 than in 2008, a downturn that continued until 2013 [4]. The FNC knew the root cause of the problem: ~80% of the cultivated land had not fungus resistant trees to respond to extreme rainy seasons (called \u201cLa Ni\u00f1a\u201d \u2013 \u201cThe Girl\u201d). Easy: change the trees, change the seeds, right? Well, it took ~5 years to do it, and the reason was that every Juan had no scale nor financial resources to invest in technology, nor training on the new seeds. Significant government and industry aid was required. The challenge is coordination between every Juan in Colombia, \u201cyou have to make them work like an orchestra\u201d, said Luis Samper, former CMO of FNC [5].<\/p>\n

    Climate change imposes a big risk for Juan in this context. By 2050, Colombia\u2019s temperature will increase 2.5 \u00b0C and weather variability will increase substantially (between 3-5% in 64% of the coffee cultivated lands) [6], having more extreme episodes of \u201cLa Ni\u00f1a\u201d. This poses a challenging scenario for Juan, as he will need to deal with:<\/p>\n

      \n
    1. The beetle:<\/strong> With increasing temperature levels, there is a risk of having a devastating plague of a Beetle called Coffee Berry Borer in Colombia. [7]<\/li>\n
    2. The girl: <\/strong>Have more and more extreme La Ni\u00f1a seasons. Excess of humidity and less sunshine will contribute to more fungus crisis in the future. [8]<\/li>\n
    3. Changes in land: <\/strong>Deal with variations in the lands that are cultivable due to increasing in temperature and lack of access to water. It is estimated that an increase in 1\u00b0C will require to move the plantations by 167 meters to maintain levels of productivity and quality. [9]<\/li>\n<\/ol>\n

      A lot of thought has been put into how to adapt to climate change in agriculture, both in Colombia and internationally. These are four of the most accepted adaptation measures suggested:<\/p>\n

        \n
      1. Change part of the process using \u201cClimate-Smart Agriculture\u201d:<\/strong> Many suggestions in this front, one of the most common being implementing a Coffee \u2013 Banana Intercropping to make both crops more resilient. [9]<\/li>\n
      2. Invest in plague resistant varieties of coffee: <\/strong>Just as Colombia did it in 2009-2013, continue developing plague resistant varieties that could deal with fungus and beetles. The challenge will be to adapt very quickly to new mutating plagues. [6]<\/li>\n
      3. Invest in heat resistant varieties of coffee: <\/strong>Let\u2019s face it, an orchestra of Juans will not be able to move plantations every time temperature increases. The only remaining option is to find coffee varieties that are heat resistant. [6]<\/li>\n
      4. Have an insurance policy at scale for Juan: <\/strong>Create a financial infrastructure to support Juan survive to extreme weather seasons. [6]<\/li>\n<\/ol>\n

        The problem is that climate change issues, combined with an increase in demand (population expected to reach 9.7 bn by 2050) [11] and incentives to use agriculture for biofuel-production, may require Juan to apply these solutions, and more, simultaneously. Will the orchestra be able to adapt together? Sounds like a challenging symphony to play.<\/p>\n

        Word Count: 799<\/strong><\/p>\n

        [1] Garcia Caceres, et al. \u201cCaracterizaci\u00f3n de las cadenas de valor y abastecimiento del sector agroindustrial del caf\u00e9 (2006). Cuad. Adm. <\/em>Bogot\u00e1, Colombia.<\/p>\n

        [2] Leonardo Pinzon, \u201cGlobal Agricultural Information Network: Colombia\u201d. (June, 2010). USDA Foreign Agricultural Service. http:\/\/gain.fas.usda.gov\/Recent%20GAIN%20Publications\/Coffee%20Annual_Bogota_Colombia_6-10-2010.pdf<\/a>. Accessed November 2016<\/p>\n

        [3] Colombian Coffee Growers Federation (FNC) Web Page. About us. https:\/\/www.federaciondecafeteros.org\/particulares\/es\/quienes_somos<\/a>. Accessed November 2016<\/p>\n

        [4] BMI Research. A Fitch Group Company. \u201cColombia Agribusiness Report Q1 2016\u201d (November,2015).<\/p>\n

        [5] TedX Talks. \u201cLa Orquesta Cafetera: Luis Fernando Samper at TEDx Guatavita\u201d. (February, 2013). http:\/\/tedxtalks.ted.com\/video\/La-Orquesta-Cafetera-Luis-Fer-3<\/a>. Accessed November 2016<\/p>\n

        [6] Charlotte Lau et al. \u201cAgricultura Colombiana: Adaptaci\u00f3n al Cambio Clim\u00e1tico\u201d. (February, 2013). CIAT: International Center for Tropical Agriculture.<\/p>\n

        [7] Jaramillo J, Chabi-Olaye A, Kamonjo C, Jaramillo A, Vega FE, et al. (2009) Thermal Tolerance of the Coffee Berry Borer Hypothenemus hampei: Predictions of Climate Change Impact on a Tropical Insect Pest. PLoS ONE 4(8): e6487. doi:10.1371\/journal.pone.0006487<\/p>\n

        [8] Colombian Coffee Growers Federation (FNC). \u201cSostenibilidad en Accion 2013\u201d.<\/p>\n

        [9] Jaramillo A (2005) \u201cAndean climate and coffee in Colombia\u201d. Colombian National Federation of Coffee Growers. Centro Nacional de Investigaciones de Cafe\u00b4 \u2013 Cenicafe\u00b4. Colombia: Chinchina\u00b4, 192p. (in Spanish).]<\/p>\n

        [10] Pieten van asten et al. \u201cCoffee-Banana Intercropping: Implementation guidance for policymakers and investors\u201d. Global Alliance for Climate-Smart Agriculture \u2013 FAO. https:\/\/cgspace.cgiar.org\/bitstream\/handle\/10568\/69017\/CCAFSpbCoffee-Banana.pdf<\/a> Accessed, November, 2016<\/p>\n

        [11] United Nations. Department of Economic and Social Affairs. \u201cWorld population projected to reach 9.7 billion by 2050\u201d. http:\/\/www.un.org\/en\/development\/desa\/news\/population\/2015-report.html<\/a> Accessed November 2016<\/p>\n

        *Calling the small grower Juan in honor of \u201cJuan Valdez\u201d the symbol of the FNC and the coffee growers and one of Colombia\u2019s most recognized brands.<\/p>\n

        **Sad Cup of Coffee picture taken from blog post posted on September \u00a0 22, 2015 by lizzyyarwood. https:\/\/orfailingthatfood.wordpress.com\/2015\/09\/22\/the-coffee-shop-crisis\/<\/a>, Accessed November 2016<\/p>\n","protected":false},"excerpt":{"rendered":"

        Many people, including myself, would not be able to start the day without a cup of coffee. Well, there may be some bad news for us,<\/p>\n","protected":false},"author":1813,"featured_media":13580,"comment_status":"open","ping_status":"closed","template":"","categories":[1243,1218,614,1939,17],"class_list":["post-13535","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-agribusiness","category-climate-change","category-coffee","category-insects","category-supply-chain"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nJuan, the girl and the beetle: How humanity may run out of coffee - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/juan-the-girl-and-the-beetle-how-humanity-may-run-out-of-coffee\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Juan, the girl and the beetle: How humanity may run out of coffee - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Many people, including myself, would not be able to start the day without a cup of coffee. 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