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World Coffee Research launches check-off fund

From the September 2013 issue.

World Coffee Research has launched a new program to raise money for research into the many issues affecting coffee cultivation.

World Coffee Research (WCR) is calling on roasters and importers around the world to join the effort to improve the quality and supply of coffee globally. 

By paying a small levy on every pound of green coffee they purchase, the organisation says that coffee roasters across the entire spectrum of the coffee industry can contribute to the WCR’s work on genetics, disease treatment and prevention, and variety trials, among other goals.

The Check-Off Fund enables roasters to contribute US$0.005 cents per pound of coffee purchased to WCR. The inspiration for the Check-Off Fund comes from long-standing financial support systems utilised by other agricultural industries in the United States.

“Almost all commodities in the US have a check-off fund,” says WCR’s Executive Director, Dr Timothy Schilling. “They utilise that fund on research or for promotion. The ‘Got Milk?’ campaign [a famously effective advertising campaign promoting milk consumption in the US] was paid for with check-off funds.”

Christy Thorns is the Director of Sourcing and Quality Control for US roasters Allegro Coffee, which was the first roaster to sign on for the program. She says the recent coffee leaf rust crisis in Central America, which has affected more than 50 per cent of the region’s coffee growing areas and cost more than US$500 million so far, is a prime example of why a check-off program is needed.

Christy Thorns“I think this current rust situation should be a wake-up call to us all to work on solutions to the high quality coffee shortages that are sure to come in the future,” she says. “WCR’s focus on coffee variety development certainly seems like the right place to focus first.”

The program will be facilitated by importers, who will apply the levy to individual itemised invoices that are submitted to the roasting partner. That way, WCR says, the cumulative, incremental contribution will seem nominal to the roasting company. The funds are collected, managed, invoiced, and delivered to WCR by the importing company once or twice annually, and will be eligible as ‘cost of doing business’ tax write-offs for participating companies.

Schilling says that WCR’s immediate priority is to address the crisis in Central America.

“For focused research on rust in Central America we are working on a special program with USAID [the US Agency for International Development] where we hope every dollar put in by a roasting company will be matched by a dollar from USAID,” he says. “That program is a US$4 million program over four years to get things where they need to be in Central America and prevent other disasters like that [rust] from happening.”

To raise the US$1 million per year required for this project, the check-off would need to be applied to just 1.4 per cent of the 110 million 60-kilogram bags of coffee that were imported between May 2012 and April 2013, according to the International Coffee Organization.

Schilling says that this is achievable, but only if the industry acts now.

Tim Schilling“This is urgent,” he says. “Everybody is talking about it but nobody is doing very much. Time is a-wasting. Farmers are going out of business. There is a real threat of losing some incredible specialty coffees.”

Alan Nietlisbach is the Senior Vice President of the Specialty Coffee Division at green bean importer, Olam Americas. Olam will not only be facilitating the payment of the levy by roasters, but has also pledged to match the contributions on coffee that they import, dollar for dollar.

“I believe this program will be more successful than others I have seen come and go,” he says. “The main reason being the variety, size and quality of companies that have joined so far, and the leadership of the WCR’s board of directors that has pushed the agenda forward. Another main difference is the current curiosity around conscience-based consumption. Never before have our industry’s consumers been more empowered to demand information about where their coffees come from and how they are contributing to the health of the supply chain.”

Nietlisbach says that the average cost for a medium-sized roaster that goes through 500 69-kilogram bags per year would be $US380. While he acknowledges the need for every business to tightly manage their expenses, he says that this contribution will help ensure a healthier quality supply chain in the future. “If you think about it, it’s really one and the same,” he says.

Christy Thorns says that Allegro Coffee made the decision to be the first roaster to sign on out of concern for their industry.

“We looked at the challenges facing the future of our coffee supply chain, the possibility of a diminishing availability of specialty coffee, as well as the ongoing sustainability of small coffee farmers. The decision to support WCR’s research seemed like the right bottom-line approach,” she says. “WCR research is largely focused on developing higher-yielding, great tasting, disease-resistant Arabica varieties, which potentially would address many of our concerns. ”

So far six roasters have signed on to the program, and WCR’s Schilling says that new roasters can easily join through the organisation’s website.

He says that the program needs contributions of US$3 million per year to fund WCR’s programs in variety development, climate change, genetic diversity and sensory research. This equates to the check-off being applied to just 4 per cent of the coffee imported in the year between May 2012 and April 2013, based on ICO figures.

If the program is able to raise this level of funds, Schilling says that it could draw attention from government agencies and private backers who could see fit to match contributions.

“There is also great potential for coffee roasters in their packaging of check-off coffees,” he says. “They could include a message declaring: ‘This coffee supports coffee research’.”

Christy Thorns says that she believes the program will be accepted by small to medium-sized roasters. “I think everyone will accept that we need to look at this type of research funding as a cost of doing business,” she says. “We can’t stick our heads in the sand forever and hope the challenges facing coffee regions like disease and diminishing natural resources will just go away.”

For more information about the Check-Off Program, visit www.worldcoffeeresearch.org

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