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Kevin Check

Good afternoon and welcome to today's Global Hot Spots lecture. My name is Kevin Check. I'm Senior Director of School and College Relations at the Wisconsin Alumni Association. We're very pleased to continue to bring this great programming to you in partnership with the Division of International Studies and PLATO and Continuing Studies. Today we welcome as our speaker Jeremy Weber who graciously agreed to step in for our originally scheduled speaker, Brad Barham, a professor of Ag and Applied Economics who happens to be starting a new project in Bolivia. And Jeremy tells me that he was communicating with him this morning in Bolivia. Jeremy is a PhD candidate in the Agricultural and Applied Economics Department here at UW Madison. His research covers development and conservation themes and has involved projects in Mexico, Brazil and Peru. He began studying fair trade organic coffee arrangements with a Fulbright grant in Peru in 2005, and has since continued to explore economics issues surrounding coffee growing households. His dissertation studies the uneven diffusion of an innovative pruning practice among coffee growers in central Peru. Please join me in welcoming Jeremy Weber as he presents "Is Organic Fair Trade Agriculture Sustainable? Observations of Coffee Growing in Mexico and Peru." ( applause ) >>

Jeremy Weber

Thank you, Kevin, and thank you all for coming out. What I'm going to present draws on several different projects that have involved a number of people. And those projects have been more narrowly focused. Brad and I and some others have looked at schooling outcomes in coffee growing households in southern Mexico. I'm looking at technology in Peru. But Brad's a big picture guy, and he said why don't we take this opportunity to take a step back from our narrow focus and look at some of the broader themes, some of the comparative differences between the areas that we're working and try to draw some conclusions and comment on those differences. So that's the fruit of this lecture. The topic of economic scarcity and economic growth and its relationship to the environment is certainly a relevant one today and that's, I think, brought out by this quote that Bill Gates made a couple weeks ago at the World Food Symposium. He says, "Environmentalists are standing in the way of feeding humanity through their opposition to biotechnology, farm chemicals and nitrogen fertilizer." I think what this quote really says or what it shows is the status of the debate surrounding economics and the environment. And I think that the structure of that debate is one where you have two poles, one where people have significant faith in the ability of technology to resolve problems of scarcity and also environmental problems as they may arise, and then at the other pole, a group of people that are very wary of technology and are environmental purists in thinking that there's really only one platform or one way of producing that's compatible with environmental sustainability. And what I'm going to talk about today and the information that I'm going to bring to bare on this argument I think presents a much more nuanced perspective and says both of those camps probably don't have it quite right and that the details of these problems that we're talking about are going to show why those two ways probably are not a good way of thinking about this problem. Coffee is a great product to look at when thinking about issues of the environment and issues of economics and welfare and livelihoods. Latin America, in particular, has many households, rural households, that depend upon growing coffee for their livelihoods. And those coffee farms are located in areas that often are biodiversity hot spots. Think of cloud forests, think of this is the transition zone from the highlands of the Andes Mountains into the lowland tropical area. In between is this area called, in some regions, the brow of the jungle. This is elevations about 1,000 to 2,000-meters above sea level. Because slight changes in elevations are associated with different microclimates, different plants and animals. And this is where coffee is being grown. I'm going to start out focusing on Peru and looking at two different platforms for growing coffee both of which have environmental concerns integrated into them. And this is going to be a broader picture of two different approaches to growing sustainable coffee, and then I'm going to focus in on the economic side of it. That is, the economics driving the livelihoods that households are able to earn by growing coffee and I'm going to first look at southern Mexico and, in particular, fair trade and organic growers there, and then go back into Peru. The organic certification, and here I'm just going to focus in on organic and not fair trade, but the organic certification is one where I think many consumers associate it with, if you want to be environmentally responsible, you buy a product that has an organic label. Other things are maybe not going to get the job done. There's a lot of faith placed on organic being the best way to maintain the integrity of the ecosystems where the product is being produced. But there are a number of competing certifications out there, especially in the case of coffee, and some of these certification may be complementary to each other and others may be competing in a sense that they're offering a different way, a different set of standards to ensure the same outcomes. So we have the fair trade certification which is a little more socially oriented and that's paired recently with the organic and in the market now you see a lot of fair trade organic labeled coffee. But they are separate certifications with different standards and norms. But then we have the Rainforest Alliance is a group that has created the sustainable agricultural certification, and you can see this in your supermarkets oftentimes, especially in the coffee aisle, when a bag that has a label with a little green frog on the label. And then Utz Kapeh, which I think is good coffee in Mayan, is again another approach, another certification out there that says these norms are consistent with environmental sustainability. The Smithsonian Institute oversees a bird-friendly certification, and then there's an industry set of practices known as cafe practices that's another label that's thrown on coffee. So a natural question is are these labels all doing the same thing? Does organic, is that really the only way to go to maintain the integrity of ecosystems in coffee growing communities? To answer this question or to discuss it a little more thoroughly, I'm going to look at a case of certified growing in central Peru, we're in the department of Junin. "Department," maybe I should have translated that, and just put state. But department is equivalent to a state. So in the state of Junin. This is in central Peru. If you can see on the coast of Peru, here we've got this different colored, this geographic map here that shows the Andes Mountains and then coming down into the eastern side of the Andes Mountains in this lighter green area is where that brow of the jungle, that cloud forest area, and that's where most of coffee is produced in Peru. And this specific region of central Peru is the coffee growing region, the capital, the coffee capital of Peru. Coffee is also grown in the south coming down from Cusco, it's also grown in the north. But the industry is the best organized and the strongest and there's most production from central Peru and specifically this region. It's a beautiful region. In fact, Brad took this photo this summer as we were kind of wandering through the area visiting these different growers. In this area, two privates companies got together and decided to fund a coffee development project. The two companies were Lavazza, which is a large Italian roaster, and Volcafe, which is a coffee and trading company, and they had the goal of, a very broad goal, of improving the economic and environmental sustainability of these communities of small scale coffee growers in several communities in Junin. One of the components of the project focused on certifying growers and integrating them into markets, export markets, that would pay premiums for that certification. And the main certification that they've been working with is the Rainforest Alliance sustainable certification, but they've also worked with the organic norms and with Utz Kapeh, and so it provides a good case study of comparing these different platforms for growing coffee. Now when we go to compare these different certifications, it's a bit tricky because if you go, say, to the website of one organic certifier, there are several, many certifiers, and you look well what are the norms that I would have to abide by to be certified, and you would find a document that would look like something that a lawyer wrote for other lawyers. Very complicated language, large document, many pages, and growers don't read these documents when they go to enter certification programs. There are extension agents, either as part of a coffee cooperative or in this case an NGO, that try to translate these norms into activities that they're going to promote among farmers, and they're going to say after kind of reading this document and talking with this certifier these are basically the things that you need to do in order to receive this certification. And that's a little bit different from kind of taking the document and analyzing it from a legal perspective as could you get away with this or not. And this comparison is based on not going to the document but going to the extension agents who work with the growers and say what are the main differences when you're implementing the sustainable or organic program. I'll start first with the sustainable. The norms are very much applied to the entire property. So if you've only got coffee on a corner and on a far other corner you've got something else going on, it doesn't matter, all of that falls into the norms. And there is equal focus on all of those areas. It's not that we look at your coffee and we kind of pay attention to the rest, but not really. In the case of sustainable, it's very important, the entire property. No forbidden agrochemicals. So some agrochemicals are permitted. There's a green colored band of products that Rainforest had said that these, when used right, have no environmental negative effects. So of course a key word is used right, so there's significant standards that deal with how those chemicals are applied, where they're stored, do the people applying them know how to apply them. And then socially Rainforest is pretty robust. They want to make sure that the coffee growing household has a working latrine. They want to make sure that workers who come to work on that farm also have access to a latrine. For women in the household that are working in the kitchen also cooking over wood, there needs to be a chimney. There needs to be good ventilation within the kitchen so that the health of women is not being affected. Clean water, the household needs to be getting potable water into it. Workers, if they're hiring in workers, there needs to be wage policies and what to do if somebody gets sick. There needs to be a formal policy of what to do in different situations. Waste water is a big deal and improper treatment of it is a sure way to not get the certification. And that's waste water that's coming from processing coffee but also waste water that's coming from the house. Reforesting is a big issue. If coffee on one corner and on the far other corner, you've clear cut that a couple years ago and it's degraded, the certifier's going to say we need to come up with a reforestation plan to recuperate or recover that degraded area. And water sources, this is a big deal, as coffee growing households or coffee farms are oftentimes located in the higher reaches of watersheds, Rainforest certifiers pay much attention to nearby creeks and is there erosion that's happening, is there proper buffers to protect against kind of heavy rains, or anything like that. Now moving over to the organic side, and again right now I'm only talking about organic, not the joint organic fair trade arrangement that is common to see. The norms are primarily focused on the crop that's being certified. The other crops also fall into, the norms apply to the other crops. But it varies a bit. You can have a conventional field nearby and you have plans to eventually convert it to organic and that needs to be explicit, but the focus is on if we're going to certify your coffee this year, that this coffee is free of agrochemicals which is the second issue here. And then the third issue, and this is really, I think, a core aspect of the organic certification, and that is contamination of foreign materials either from other activities on the farm or from neighboring farms. There's a transition period between when I enter an organic program and when I can start selling my coffee as certified organic. Again this is dealing with the idea that if you've applied agrochemicals in the past, we want to give time for them to be processed through the soil and to disappear before we're going to allow you to sell your coffee as organic. Traceability is also a big issue. When the coffee leaves your field, where is it being stored when it's harvested, and on the farm. Is that a clean environment? When it goes to a processing plant, what treatment is it getting there? So I think it comes out clear that a big focus is kind of keeping coffee clean, keeping it from being contaminated by other sources. Whereas with the sustainable, it's a much broader set of goals and standards. The entire property, reforesting. And it's not that the organic and the norms doesn't mention not cutting down forests and these other issues, but again, this is coming from people who work with, translate those complicated documents into advice, recommendations for the farmers what want to get certified. What is it that you most need to pay attention to for the certifier at the end of the day to say okay, looks good enough or it fulfills the most critical requirements for certification. Because the sustainable norms are much broader, they can serve as a base for then launching into an organic program, with the only exception being that if you're applying the permitted agrochemicals under the sustainable, you would have to change that to go organic. It would be much more difficult to be certified organic and then expect that you would just need to do some paper work to get the sustainable certification. Most likely you wouldn't be treating the waste water from, or in the case of this group of growers in central Peru, you wouldn't be treating the waste water from the house. You wouldn't have a chimney. May or may not have an acceptable latrine. So there would be a lot of things that you would need to do to go from organic to sustainable. But not so much the other way around. What are some of the possible issues that extension agents and people working on the ground and agronomists have noticed with the organic norms? One concern is that the amount of organic fertilizer that's available at any given time or when the farmers need it, is oftentimes very limited or costly. And so farmers, oftentimes, are not appropriately or providing enough fertilizer to replace the nutrients that are being taken out from the plant. And so you have this what's been known as soil mining where over time, the rate at which nutrients are being taken out is exceeding the rate at which those nutrients are being replaced. And one reason is that organic fertilizer, for example, the pulp that comes from processing the coffee cherries, that's used as an organic fertilizer, that's not the same as getting a synthetic pellet that has just the right mix of nitrogen, phosphorous and potassium. This is a much more specific targeted input. Whereas with the pulp, there's organic material there and there's some nitrogen, but is it enough, is it in the right mixes so that it's going to be efficiently utilized by the plant? Probably not. And then this issue, substituting herbicides with other capital inputs, came up when I was visiting a farmer in Peru this summer and he had bought a weed whacker to deal with the weeds that would grow up, and this is a major task for coffee growers to keep their fields clean. And so instead of applying a herbicide, which would break down in the soil and which would keep the ground free of weeds, he was going through with his weed whacker every now and then. And I'm thinking well I'm not convinced that we've come out ahead with this, because that weed whacker is using, it's not very clean, there's certainly noise pollution associated with it. It doesn't do as good a job as the herbicide would. So are we better off environmentally? And that's a question I want to leave you with and that's a question that needs a lot of research that has not been done in a thorough, rigorous way. And that is, given these different norms, what type of environmental outcomes are we seeing? And this is a point that I want to hit on more in the conclusion, and that is, it's not enough just to say we've certified growers, we've certified so many growers in the head waters of the Amazon so we're protecting the ecosystem. Well, I want to know, well what's changed? If before they weren't certified and now they are, does that mean that we could go and see that the quality of the water that's coming out of those watersheds is better? Does that mean that there's more bird species because of the shade cover? I want to see some quantitative evidence that there's improvements as opposed to just saying, well, they're certified so we know everything's okay. This is a picture that I think this is the only time Brad's going to appear in this presentation. Here he is, we're meeting with a grower that is under the sustainable group or working with the sustainable certification in Peru. And this is a what it says here in Spanish is a biological micro-corridor conservation of a water resource. Now this is a creek that runs along the side of this gentleman's property, and you can see that there's quite a bit of vegetation here. And that wasn't the case a couple of years ago. And this is a change that's been brought about because the certifier says you have a waterway over there, we need to see that that buffer zone around it is there and is protecting. And also, for example, the steps going up from across the creek and then up over the hill are terraced. Before, without those there, you get a heavy rain and that water has nothing to slow it down and it's going to carve a big ravine right down into the creek. So that would be something else that he would probably do as part of fulfilling the sustainable norms. Uh-oh, I'm cut off up at the top. Anyway, so that's a very broad brush picture of the organic, sustainable or other certifications issued. And I think the thing to keep in mind is that it's not clear that organic is promoting environmental sustainability better than alternative programs. And that's really something that needs to be researched better. Because there certainly are alternatives that may be doing a better job. We're not sure. Moving on to the economic side. What do growers get out of participating in these certified programs? So you have to not use agrochemicals or maybe you have to put a chimney in, or do any number of things, how is that fitting in to your overall economic well-being? To look at this for the case of fair trade organic markets, we're going to southern Mexico. Southern Mexico is a region that's been at the forefront of the growth and fair trade and organic markets from the beginning. We're using information from a survey of 845 coffee growing households randomly selected from Oaxaca and Chiapas, these are two states in southern Mexico. The data collection was supported by the Rockefeller Foundation. In this data set, if you're participating in fair trade, you generally are also participating in organic markets and you are also a member of a cooperative. So these three kind of concepts are merged together in the case of southern Mexico. We have in the sample 357 conventional growers. These are growers who are generally not a part of a cooperative, they're not a part of fair trade organic. And then within fair trade, we have 417 organic, this is they've passed that transition period, generally three years, and now can sell their coffee as certified organic. And then there's 71 growers who are in transition to receiving organic certification. And again, both of these groups would be working under the fair trade, working with fair trade arrangements. To give you a sense of the economic contents of these households, the percents on the outside of the circle represent the number of households that are deriving some income from that income source. For example, 96% of households have some positive income from coffee. Which isn't surprising because we're sampling coffee growing households. About a third of households are having remittances. They're participating in this exodus of labor northwards, sending a family member there and getting remittances in return. Subsidies are also something that's prevalent for many households, as well as nonagricultural activities. This would be working for a wage in a local job. Now the inside percents in the distribution of the pie represents how important, for the average household, is that income source. So we see here remittances are by far what dominate the incomes for these households. Which is interesting because there are only 35% of the households that are getting any remittance. So that means those households that are getting remittances are getting quite a bit. And then next we have subsidies, these would be several kind of support programs for coffee growers that the Mexican government has and that's on par with the amount of actual income that coffee growers make by growing and selling coffee. And then just behind is nonagricultural activities. So a point that I want to drive home is that these households have a lot going on. They're participating in migration networks, they're participating in government programs, they're participating in the non-coffee local economy. And I'm going to later contrast this with the case of central Peru. How much are these growers earning from coffee? So if we look at what's the average net revenue, this is their total sales of coffee minus their cash costs, that would be either for hired labor or for any purchased inputs. If we break that down by certification status, we see that these conventional growers, things are not going well for them. Certainly in comparison to the transition growers who have more than double the net revenue of conventional growers per hectare. And then organic growers are slightly behind the transition growers. What's driving these differences? This is a big question because if we think about why are some coffee growing households poor, and some less poor, or maybe doing all right, we've got to understand where these differences are coming from. Are they coming from the prices that these growers are receiving for their coffee? Or are they coming from how much coffee that household is able to produce on their given land with their given plants? If we look at prices received we see, as we would expect, that the conventional are getting slightly lower prices than the transition who have access to the fair trade but cannot yet sell their coffee as organic. And they're not doing as well as the organic, which can sell their coffee with fair trade certification and with the organic certification. So the differences are about, we've got 67 cents for the conventional, about 78 cents, and then about 83 cents for the organic growers. Productivity. This is how many kilograms of coffee these growers are getting out of their land. The conventional growers are lagging far behind. They're only about 175 kilos per hectare. And the transition growers have about twice that and then the organics again are a little bit behind that. A key question, as I mentioned before, what is causing these productivity differences? Is this because the organic norms, there's something about them that raises the productivity of coffee growers? Or perhaps, the type of growers who decide to go organic and participate in cooperatives, they had higher productivity beforehand, that's the type of growers, and so then higher productivity growers are the ones who select into the organic and fair trade markets. So in other words, the organic and fair trade markets are drawing in the more progressive, more productive farmers. We're not sure. In other words, we can't say that participating in a cooperative or participating in organic fair trade causes increases in productivity. All we can really say is that this productivity difference exists, and the point that this next slide makes, it's what's causing differences, most of the differences, in income among groups of growers. This is a thought experiment to help drive that point home. Conventional coffee grower net revenue on average is about $203. If we keep everything else the same and we just say conventional grower we're going to give you the price that a transitional grower receives, how much will your net revenue per hectare increase? And it's going to increase to $247. So yes, there's an income increase associated with selling to fair trade. That's clear. But let's say now we give you the conventional market price, you as a conventional grower, but we're going to give you the productivity of a transition grower. Suddenly, still getting the conventional price but getting the productivity of a transition grower, the income goes up by up to $398. Basically doubles their income. Whereas it's only increasing it by about 20% in the case of the prices. And then this is the actual transition net revenue. So if we just gave them the same productivity as the transition group we would bring them pretty close to making about the same amount of money as the transition growers. If we go back to this question of fair trade organic, is this improving livelihoods in southern Mexico? It's difficult to say because we're not sure if that's the cause of these productivity differences. But what we can say is that coffee is really just one activity in the mix of several that these households are pursuing. Including migration networks and getting remittances, subsidies and non-ag income. We can also say that the higher prices from fair trade and organic markets, which is something you often hear about in the popular press, getting higher prices, getting a fair price through fair trade, is not having that big of an effect on income. Or at least it's not having nearly as big of an effect as productivity is having. But an important question is how generalizable are these results? Do we observe this finding that the productivity effect dominates the income effect from certification premiums? Do we see that in other countries? And to answer that question we're going to dive now, we're going to return to central Peru, where in the sample of growers that we're looking at, they had, this is pounds of coffee per hectare. So the top row is for our sample of about 200 growers, how many pounds of coffee were they producing per hectare? And this is for the state of Junin, and the two match each other pretty well. And then here, we see our sample from Oaxaca, our sample from Chiapas, and then later what are the state numbers for those areas. And it should stand out right away that both the department of Junin and the growers in our sample have doubled the productivity of growers from the Mexico sample. And the Chiapas growers are under the average for their state, whereas the growers from Oaxaca are about on par. Now if we go forward in time, that's in 2005 when the Mexico data was collected, if we go forward in time, we don't have data for 2008 from these specific growers in Mexico, but we do have from those states and we can see that Junin and the Peruvian sample is now four times, in the case of Oaxaca versus central Peru, central Peru is growing four times the amount of coffee for the same amount of land. And if we compare from 2008 to 2005 in different places, the differences are striking. And those circles draw that out. So now let's take a little more detailed look at these different growers and different countries. So here in this column we're looking at just the organic growers. Now these are organic and also fair trade growers because the two are joined together in the case of southern Mexico. And then these are the sustainable growers in Peru. Sustainable growers are a little bigger, that's not super interesting. This is an interesting statistic. The coffee growers, the organic coffee growers in Mexico are only getting about a third of their income from coffee. Again, it's just one activity in the mix of many. In the case of the Peru, they're getting most of their income from coffee. Coffee is what determines what they can consume in a year. Now, let's take a look at incomes. In terms of productivity, we're seeing that growers in Mexico in 2005, organic growers, have a much lower productivity than the sustainable growers in Peru. Sustainable growers in Peru have about four times that of the organic growers. Correspondingly, growers in Peru have about four times the net revenue per hectare as the organic growers in Mexico. So this is consistent with our comparisons between transition and organic growers in conventional grower incomes, and we're finding that really it's about productivity, that's what's driving differences in net revenues. And when we compare between the organic growers in Mexico and the growers in Peru we also find that. That the differences in income between these groups is an artifact of how much coffee they're able to get out of a given amount of land. How much are these growers in Peru, how much of their increase in revenue comes from getting a premium for being certified? Here we see this is the premium in US dollars per pound in 2007 and 2008 for growers that sold to their cooperative in the project. It's about 7-cents in 2007 and about half that in 2008. And that translated in 2007 about an additional $147 in income for those growers. But that additional, that increase in income from selling to a higher valued market per hectare was pretty small and really only represents about 3% of the net revenue per hectare. So it's really not about prices. At least for these growers. And it seems to be the case in Mexico as well. That it's not prices that drive the differences in income, it's productivity. And productivity is something that this project in central Peru focused on. The project, Proyecto Teirra, Project Land, didn't just focus on, we want to certify you to get a higher price and that will solve your livelihood issues. They also said you know what, it's really important that these farmers are managing their resources well, that they're getting the most out of their plants, that they're keeping track of their costs, keeping track of productivity and managing it like a business. And one practice that they introduced to further these goals was systematic pruning. This is where a grower cuts his tree off, now a coffee tree can grow up about-- If you let it go, it can grow quite tall. And he cuts it off at about a meter in height or about waist height, and he does that to a section of his farm each year in a rotating fashion. And the idea is that you can stabilize production through that practice. Stabilize and increase because when you prune the plant it stimulates the plant to fill out, to produce more branches and leaves from which then lots of berries come forth. And this is very important because the growers in central Peru, they had older trees. And as trees get older, their productivity drops dramatically. Systematic pruning, in effect, gets an older plant to produce like a new one. But growers, before I get into this, the growers in this project were initially very skeptical of this idea. They're deriving their livelihoods, most of their income, as I showed before, is coming from coffee growing. What happens if I cut my plants down? This is ludicrous they said. In one case, the agronomist in the project came into a community and said we're going to cut your plants down and they kicked him out. They wouldn't let him finish the meeting. They said this is crazy. In another case, it's a great story that some growers like to tell, is that there was one guy who was thinking this might work. He was thinking about it. And his wife said if you cut our plants down I am leaving you. You do not touch our plants. And I think that gives you the sense these are households that are dependent on coffee, this idea seemed very risky. You're cutting your plant down. And, in fact, you don't get production from the plant in the following year, it's only in the year afterwards when it comes back. So there is that year in which if you don't have much savings to go on maybe you can't make that jump; maybe you can't deal with that short drop in income. How much production or how does the pruning affect yields? This is just a statistical exercise that I did where I looked at changes in yield, that's kilograms of coffee per hectare, between 2008 and 2009, controlling for what your change in yields were last year and then whether or not you pruned in 2006, 2007 and 2008. The way to interpret these numbers is that if I pruned in 2006 and then didn't do anything in the following years, the immediate effect is to decrease my production, I'm taking that plant out of production. But then the following year I'm going to get some of it back, in fact most of it back. And in the year afterwards I'm going to get it back in a big way, about 865 kilogram increase is what's associated with that. So the key note here is that this is a method that although it lowers production initially, it brings it back in a big way. So I think one of the conclusions that we can draw or perhaps a better way to say that is one thing that these observations suggest is that environmentally sound alternatives to organic may exist. In fact, there may be environmentally superior methods but that this really needs more evaluation of connecting specific practices with outcomes. If farmers aren't allowed to use herbicides or they're not allowed to use synthetic fertilizers, does soil quality fall? Does productivity fall? Is there contamination? Is there really negative effects to using any type of agrochemical? Or is that perhaps a knee-jerk extreme reaction to synthetic inputs in general? It comes out pretty clear. On this side, I think that's where Brad and I have the least concrete information to go on. But this is a conclusion that we can stand behind quite firmly, and that is the effect of productivity on income dominates the effect of higher prices on income. And now this is a provocative point. A passive low-intensive management of crops, and you could think of having an organic system that's intense, but you could also think, and I think it's true for a lot of cases in Peru especially, that organic is associated with a passive management of the crop. No inputs or low inputs, some labor spent on cleaning, on weeding, but we're not going to buy fertilizers, we're not going to buy synthetic inputs, herbicides. That may have negative effects on both ecosystems and livelihoods. Why could that be? Why would one think that? Well, lower productivity means that there's less goods coming out on the market, less coffee on the market, that's going to raise the price of the final good, but it's also going to increase demand for the raw materials that go into making coffee, particularly land. If you have very low productivity, you're getting little coffee out of the land that you have, to produce a lot of coffee, you need a lot of land. So you bring more coffee land into production. So that's one mechanism through which the organic may have some negative environmental consequences. And if a household is getting very little coffee out of the hectares that they have, to reach some adequate income to meet their basic needs they may need to expand the scale of their operation. Again, bringing more land into coffee production. Which, in the cases of, I don't think in the case of Peru, but in the case of Mexico, it may mean cutting down virgin forests or expanding into areas where coffee previously was not grown. What are some recommendations or some thoughts going forward for what people and organizations that are working with rural coffee growing communities should keep in mind? I think an important role that nongovernment organizations and cooperatives could play to increase incomes and livelihoods, improve livelihoods, is to perhaps shift their focus, in some cases obsession, on getting certified and getting a higher price to more on management, innovation, using the best practices, best agronomic practices, because I think currently that's something that's been superseded by this obsession with let's get you certified and let's get you selling, exporting, to a higher value market. And in some cases, cooperatives, their extension agencies are the people that work with their member growers have now been turned into agents of certification. All their time is spent taking the norms that are handed down from the certifier and going, running around and making sure that they can check off the boxes. And so they're not spending time thinking about what are better ways of producing, what are agronomical practices that are going to raise productivity. Instead, they're thinking what do we need to get people to do, so that the certifier is going to say, okay he can sell to this market. This role for NGOs and cooperatives to improve the management of coffee farms, promote the best practices and in that way improve the livelihoods and the ecosystems of these areas could be critical because, in Latin America especially, after the mid-'80s the state governments in these countries have really retreated from extension services. So they've, in many cases, kind of let the especially smaller-scale farmer to face his fate by himself, and that these extension services that connect and spread innovations and best practices are not there anymore. And so there needs to be some vehicle or agents in the rural areas that are promoting these innovations that are going to allow for coffee growing households to get more out of the plants that they have, more out of the land that they have and do so in a way that's not degrading to their ecosystems. Thank you. And I'm looking forward to questions. I'm sure you have many. ( applause )