Unlocking the economic potential of specialty coffee in Nepal

Photo credit: Dieuwertje Bravenboer

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“Sometimes I wonder out loud: what am I doing here?” says Ben Kostwinder when asked what it is like to work in Nepal. “At the same time, there are so many beautiful and rewarding aspects to it.”
 

Kostwinder and his wife Linda founded 80days in 2016, a year after a devasting 7.3 magnitude earthquake killed nearly 9,000 people and left many more thousands homeless. After seeing the huge potential of coffee to stimulate the economy and provide vital income for rural communities, 80days works with Nepalese farmers to hone production and provide a direct export route to the Dutch market.

With the slogan ‘coffee without aftertaste,’ 80days is working to create economic opportunities for farmers and improve the lives of communities. According to Kostwinder, that mission is sorely needed. “Nepal is a beautiful country with great nature and a rich culture, but it also has a downside,” he says.

Landlocked Nepal is one of the poorest countries in the world, with an average income of less than a dollar per person per day. According to the UN Development Program (UNDP), poverty in the Asian country has increased over the past three decades, especially in rural areas. The poorest 40% of the population is worse off today than thirty years ago and since 1991, the country has been the largest recipient of foreign aid in all South Asia.

 

High unemployment
 

With few employment opportunities, more than two million Nepalis are working abroad and nearly 1,500 leave the country to seek employment every day. They leave their families behind, usually for many years, and are too frequently at the mercy of employment agencies and middlemen, who often charge large fees for Nepalese migrants.
 

In many cases, Nepalese workers struggle to pay back loans taken out to fund the trip. Estimates of the number of migrant workers range between two and three million, roughly 10% of the population.

“They often work under unpleasant conditions,” says Kostwinder.

“Everyone knows the stories about the football stadiums in Qatar.” In a previous life, Ben worked as a manager for the EO Metterdaad Foundation. When Nepal was hit by a major earthquake in 2015, Metterdaad raised significant funds for the victims and Ben visited the disaster area. His wife Linda followed, and together they saw the challenges many in Nepal face from poverty and unemployment.

 

“We later found that coffee cultivation was still in its infancy and quickly saw the enormous potential”
Ben Kostwinder, Co-founder, 80days

“My wife and I were deeply affected, not only because of the consequences of the earthquake, but also because of unemployment and its consequences. We decided to quit our jobs in the Netherlands and travel to Nepal.”
 

After a few false starts, it became clear that coffee could be a major catalyst for employment and economic development.

“We hesitated for a long time about what we could do. Initially, we thought we would do something with solar energy… We later found that coffee cultivation was still in its infancy and quickly saw the enormous potential.”

Reducing the knowledge gap
 

According to the Nepalese government’s National Tea and Coffee Development Board, coffee was not grown on a commercial scale in the country until the 1990s. Partly because coffee production started so late, a knowledge gap emerged, says Vidur Ghimire, Programme Officer at the Nepalese International Trading Center (ITC). With various projects, and with financial assistance from the European Union, the ITC is trying to catch up and get exports going. “There is a shortage of coffee cultivation knowledge and skills in Nepal.”
 

“Think of managing a plantation, dealing with diseases and pests and guaranteeing consistent quality. But we can also improve in the areas of marketing, branding and packaging. Unlike tea, coffee is much less developed in Nepal.”
 

According to Ghimire, approximately three tons of coffee is produced in Nepal every year, around 80% of which is specialty grade. “We do not yet export large quantities, but according to the Specialty Coffee Association (SCA), most Nepalese coffee now achieves a cupping Score between 80-85.”
 

“Farmers often do not know the sales potential of specialty coffee”
Audrey Gavard-Lonchey, Programme Officer, Agri-food Value Chain, International Trading Center (ITC)

Given the current small-scale of exports, Nepal’s high-quality coffee industry has great untapped potential. Because many men leave the country to work in the Gulf states, much of the work is done by women and young people. Research by Specialty Coffee Nepal, an organisation that promotes specialty coffee in the country, shows that approximately 45% of farmers are women.
 

“In Nepal, women are mainly involved in the production side. For example, picking berries, processing them and sorting,” says Ghimire. An important part of the ITC programme is reducing the knowledge gap among women through education.

“We would like women to have opportunities to play a greater role in the upper echelon of the sector. It would be great if women could participate in sales, marketing and branding.”

The coffee conversation
 

Meanwhile, 80days, a reference to the days needed in the production process from berry to cup has expanded its network to 180 coffee farmers who cultivate a combined 40,000 coffee trees in four districts: Lamjung, Gorkha, Tanahun and Kavre.
 

“We will hold a presentation in an area where we know there is interest in starting coffee cultivation,” says Kostwinder, explaining how 80days approaches new partner farmers.

“Farmers can then register for a one-on-one interview, in which our team gets a good idea of the farmer. What is the family composition like? What is their income? Which family members will do the work? Is there a business plan? Coffee growing aspects are also discussed: What does their soil look like? Do they have enough shade for coffee? Is there a water source nearby?”

When a farmer proves suitable, the planting process starts. The coffee plant produces cherries after three to four years for a period of 25 years. “In the first years, a farmer can grow other crops between the coffee plants.”
 

At the same time, 80days is making investments to improve yields, quality and crop resilience. “In addition to the plant itself, we provide farmers with, among other things, irrigation systems and compost, but also with vocational training. During such a training course, farmers learn, for example, how to make biological pesticides from cow urine, says Kostwinder.

Ben and Linda Kostwinder, founders of the 80days coffee initiative

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Increasing exports
 

A further 2,000 farmers in the country were helped by ITC in various areas, says Audrey GavardLonchey, Programme Officer, Agrifood Value Chain, at ITC.
 

“We work with ten local governments in different parts of Nepal. Together with them, we help educate potential and existing farmers with knowledge and awareness training. For example, lessons are given to connect with the market through marketing and branding.”

Another important goal is to increase coffee quantity. “To increase production and exports, we make farmers aware of the volume they can produce. Farmers often do not know the sales potential of specialty coffee, Gavard-Lonchey adds.”

To this end, the ITC also educates farmers on raising quality and sustainable agriculture through cupping workshops and field training.
 

“There is now a Nepalese sustainability certification. We train Nepalese trainers in the field of sustainability, who then transfer their knowledge to the farmers.”

ITC also carried out DNA sequencing to identify the presence of different coffee varieties, which is particularly useful for strategising in the future, says Gavard-Lonchey.

“We discovered that there are mainly bourbon berries. Together with the Tropical Research Institute, we are working on a strategy to diversify the supply,” she adds.
 

“We would like women to have opportunities to play a greater role in the upper echelon of the sector”
Vidur Ghimire, Programme Officer at the Nepalese International Trading Center (ITC)

Partly due to the efforts of ITC and 80days, Nepalese coffee exports increased by 11.5% in the 2022/23 financial year and today a kilogram of coffee fetches about $16 on the international market. During the same period, coffee imports also grew by 155% and consumption continues to increase in Nepal.
 

“Nepal is a beautiful country to produce coffee. Yet a huge volume of what is consumed comes from India despite the fact it can easily be grown here,” says Kostwinder, pointing to the challenging logistics that have so far held back production.
 

“That is really one of the biggest challenges, also for us. Access to the villages is a disaster. To get to the farmers, we had to walk long distances in the beginning. There are now more buses running, but the roads are often in poor condition.”
 

An uphill task
 

Inadequate infrastructure poses significant challenges to Nepal’s budding coffee industry, says Kostwinder. “After we ordered a peeling machine, we ran into all kinds of walls – paperwork, corrupt customs officers and energy problems. To get the machine to its destination, we even had to build our own road,” he says.
 

Diseases and pests also pose a challenge. In 2016, the Gulmi district suffered an epidemic of white stem borers, an insect that attacks the coffee plant, causing it to stop growing and die. Some farmers in the district lost up to 60% in annual yields.

And Nepal faces an even bigger challenge – the climate emergency. Global heating brings unpredictable rainfall, frost and damage to berries and blossoms is commonplace, which strongly affects coffee quality and yield.

More worrying are the long-term effects of climate change. Research from China’s Kunming University shows that Nepal will experience a significant shift in its agroclimatic zones in the coming decades. This could result in as many as 72% of Nepal’s coffee-growing areas becoming unsuitable by 2050. If coffee production is to continue to grow in the long term, farmers must know how to adapt by practising climate-resilient agriculture.
 

“It is clear that Nepal has enormous potential,” says ITC’s Ghimire. “To continue to grow, the country desperately needs external help and knowledge in the field of sustainable cultivation, infrastructure and climate change in the coming years.”
 

Kostwinder agrees and emphasises the positive social impact of development aid. “We remain committed to the farmers – 80days believes it is important that families can stay together and build a good future for generations to come.”
 

This article was first published in Issue 21 of 5THWAVE magazine.

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