The title, “Youth in Coffee: Why Producers Remain Poor While Non-Producers Grow Rich,” points directly to the core paradox of the coffee industry. Here’s a breakdown of the reasons behind this phenomenon.

The Core Problem: The Value Chain vs. The Supply Chain

Coffee farmers are at the beginning of a supply chain, but they capture very little of the value chain. The value chain is where money is made, and it’s dominated by actors far removed from the farm.

The Journey of a Coffee Cherry and Its Value:

  1. Producer/Farmer (Stays Poor):
    · Inputs & Labor: Bears the cost of land, seedlings, fertilizer, pesticides, and intensive labor for planting, pruning, and harvesting.
    · Price Takers: They often sell their coffee as unprocessed “cherry” or parchment to a local mill or cooperative at a price dictated by the global “C-price,” over which they have no control.
    · Small Scale & Lack of Bargaining Power: Individual smallholder farmers (who produce most of Kenya’s coffee) cannot negotiate prices effectively.
    · Climate & Risk: They bear all the risks of drought, frost, pests, and diseases, which can wipe out an entire season’s income.
  2. Millers, Exporters, and Importers (Start to Get Rich):
    · Consolidation & Margin Addition: These actors buy from thousands of farmers, aggregate the coffee, and sell it in large volumes. They add value through milling, grading, and logistics.
    · Fixed Fees: They often operate on a fee-based model, guaranteeing themselves a profit regardless of the final price of coffee.
  3. Roasters (Grow Very Rich):
    · The Biggest Value Addition: This is where the real transformation happens. Green coffee beans are transformed into a consumable product. A kilogram of green coffee beans multiplies 5-10 times in value once roasted and packaged.
    · Brand Power: Companies like Nestlé (Nescafé), JDE, and Starbucks build immense brand value and customer loyalty, allowing them to command high prices.
    · Marketing & Margins: The cost of marketing, packaging, and distribution is built into the price, resulting in high profit margins.
  4. Retailers & Cafés (Grow Rich):
    · Final Markup: A café sells a cup of coffee for the price the farmer received for an entire pound of raw coffee. The margin on a single espresso or latte is enormous.

Specific Issues in the Kenyan Context

The “Youth in Coffee,” highlighting that this systemic problem is a major deterrent to the next generation.

  1. Outdated Cooperative & Marketing Systems: Kenya’s coffee is often sold through the Nairobi Coffee Exchange. While designed for transparency, the system can be slow, and farmers feel disconnected from the final sale and its price. Delayed payments are a major issue, killing a young entrepreneur’s cash flow.
  2. The “Middleman” Culture: A proliferation of intermediaries between the farmer and the miller/exporter syphons off value, leaving the producer with a smaller share.
  3. Lack of Direct Market Access: Most young farmers lack the knowledge, capital, and connections to bypass the traditional system and sell directly to international specialty roasters or consumers, which is where the premium prices are.
  4. High Cost of Production: The cost of inputs in Kenya is high relative to the fickle income from coffee, making it an unattractive, high-risk business for the youth.
  5. Land Fragmentation: As families grow, farms are subdivided, making it even less economically viable for the next generation to rely on coffee as a sole source of income.

Why Non-Producers “Grow Rich”

The “non-producers” are the actors in steps 2, 3, and 4 above. Their wealth grows because:

· They operate on volume and margin, not commodity price volatility.
· They control the brand and the customer relationship.
· They add tangible, marketable value (convenience, experience, consistency).
· They have diversified income streams and can hedge against price fluctuations.

The Path Forward: How to Make Coffee Attractive for Youth

key takeaways: KCS Training on :

  1. Vertical Value Chain (VVC) Integration: Encourage young farmers to move beyond just growing. This means learning to process (washing, drying), roasting, and packaging their own coffee. This allows them to capture more value from the same raw material.
  2. Direct Trade & Specialty Markets: Bypass the traditional auction system by building direct relationships with specialty roasters abroad or at home. This often leads to higher prices, transparency, and long-term partnerships.
  3. Branding and Storytelling: Youth are digitally native. They can use social media to tell the story of their farm, their process, and their passion, creating a brand that consumers are willing to pay a premium for.
  4. Diversification: Encourage intercropping with other cash crops or setting up an on-farm café or tourism experience (“agritourism”) to create multiple revenue streams.
  5. Modernizing Farming: Adopting technology for better farm management, financial tracking, and accessing real-time market information to make smarter decisions.
  6. Stronger Cooperatives: Reforming and modernizing cooperatives to be more transparent, efficient, and focused on adding value (e.g., building their own roasting facilities) rather than just being a collection point.

Impact, : The Kenya Coffee School Vertical Value Chain course is teaching that the way to break the cycle of poverty for producers is to stop being just a producer at the bottom of the chain. The future for youth in coffee lies in becoming agri-entrepreneurs who control their product from “seed to cup,” thereby capturing a fair share of the immense wealth that coffee generates globally.