Annual Report 2023
Global Coffee Sector Faces Climate and Economic Pressures in 2023, Urging Sustainable Solutions for Smallholder Farmers
In 2023, the global coffee sector encountered multifaceted challenges, ranging from climate change-induced crop failures to market fluctuations. Extreme weather events disrupted coffee production in key regions like Brazil and Central America, leading to diminished yields and quality. Ethiopia reported heavy rainfall mixed with snow in some areas. Tanzania was highly impacted by El Niño, contributing to infestation of pests and diseases, flooding, and soil erosion. On the other hand, there were droughts, which triggered a reduction in yields and compromised coffee quality.
These adversities disproportionately affected smallholder farming families, whose livelihoods heavily depend on coffee cultivation. With decreased incomes from reduced harvests and volatile market prices, many smallholders faced heightened financial insecurity, hindering their ability to invest in their farms, access resources, and support their families. Such circumstances underscored the urgent need for sustainable practices, resilience-building initiatives, and equitable market mechanisms to safeguard the welfare of coffee-dependent communities worldwide.
Rising Production Costs Threaten Profitability Despite Increased Coffee Prices
At the same time, a significant overarching trend observed was the dramatic increase in coffee production costs across all program countries, outpacing the growth of household incomes. This cost escalation was primarily attributed to rising input costs, notably chemical fertilizers and labor. Despite improvements in coffee prices, particularly in Brazil, Indonesia, and Tanzania, they were insufficient to offset the surge in production costs, resulting in diminished profitability for coffee farmers.
ICP Focused on Agroecological Practices and Income Diversification to Foster Farmer Resilience against Challenges
In our projects, we aimed to counterbalance the rise in production costs and enhance the livelihoods of coffee farming households. With our implementing partner Hanns R. Neumann Stiftung (HRNS), we fostered agroecological practices and the diversification of crops and income sources as a potential resilience strategy against poverty, food insecurity, and climate vulnerability among coffee farming families.
The projects have gained momentum in systematically addressing negative macroeconomic trends and climate change impacts in all focus countries: There was increased interest in joining the program by smallholder farming communities. However, while yields increased, rising production costs were not offset by coffee prices. Therefore, continuing efforts to promote climate-smart practices, income diversification, and food security measurements, especially for vulnerable groups like female-headed households, are being focused on in 2024.
ICP's activities from 2001 to 2023
projects have been implemented since ICP's foundation in 2001.
countries have been hosting ICP activities since 2001.
households have been reached throughout all regions since ICP's founding in 2001.
Euros have been invested by the ICP shareholders since 2001.
Empowering Smallholder Farmers through Diversification and Inclusive Practices Across Countries
In 2023, we placed a strong emphasis on income and crop diversification as a core strategy to build resilience among smallholder coffee farming communities. This approach not only helps farmers mitigate the financial risks associated with fluctuating coffee markets and climate change but also strengthens food security and economic empowerment. In addition to improving the livelihood situation, our work focuses on promoting gender equality and youth involvement, ensuring that all members of farming families contribute to, and benefit from, sustainable development.
In the ICP project in Brazil, several income generation strategies were introduced, such as beekeeping and soybean cultivation, to supplement coffee farmers' incomes. Online training sessions reached 536 participants, demonstrating how these practices can coexist with coffee cultivation. In addition, farmers participated in webinars on waste management and water conservation with special attention given to utilizing natural resources more efficiently. Notably, the adoption of blackberry and dairy production offered additional revenue streams for families, improving household resilience. Furthermore, farmers in Brazil have seen improved coffee quality, with specialty coffee providing access to more profitable markets.
Similarly, in Honduras, ICP worked with over 2,400 farming families to foster their resilience against economic and climate shocks. By supporting 67 plots that integrate crops like avocado and plantain, and establishing 170 household gardens primarily led by women, the program empowered communities to secure better food and financial stability. Other new business ventures included fish farming programs with tilapia. Women were particularly supported through the creation of 153 new businesses in 2023, with 80% of these ventures led by women. This focus on gender inclusion has not only enhanced economic empowerment but also strengthened food security, as many families began producing their own food alongside coffee.
In Tanzania, youth entrepreneurship played a critical role in ICP's strategy to diversify income sources. Youth groups were equipped with the knowledge and resources to enter various agricultural value chains based on their interests e.g., vegetable production, poultry and livestock keeping, farm input shops, coffee, cereal trading, production and supply of clean cooking stoves, resulting in 56 youth successfully launching businesses. Moreover, ICP mainstreamed gender inclusion, increasing women’s participation in training programs to 57% in 2023, up from 46% the previous year. Women also took up more leadership roles within producer organizations, further embedding gender equality in local communities. The introduction of micro-irrigation techniques supported the cultivation of additional crops, enabling farming families to venture into vegetable production despite changing climate conditions.
In Uganda, a similar focus on household-level diversification helped coffee farming families improve both their income and food security. Over 400 farmers were trained in establishing nutritional gardens–kitchen gardens, sac gardens, or mandala gardens, complemented by local seed collection and the formulation of organic pesticides– providing them with access to fresh vegetables while reducing their dependency on external food sources. The program also facilitated the set-up of over 100 demonstration plots to showcase the different types of gardens. Alongside improved nutrition, coffee yields in Uganda saw a significant increase, rising from 1kg per tree to 1.8kg, thanks to better farming practices introduced through the program.
In Indonesia, although food security was not a pressing issue due to the availability of fruit and tubers, ICP's diversification efforts focused on increasing household cash flow. Women in particular embraced alternative income-generating activities such as mushroom farming, fruit juice production, vegetable and spice cultivation, and producing organic liquid fertilizers. These efforts provided much-needed cash for essentials such as school fees and medical expenses. Moreover, ICP's couples training highlighted gender disparities in daily tasks and working location, leading to separate training sessions for men and women, tailored to their specific interests and skills.
Lastly, in Ethiopia, ICP supported coffee farming families in adopting modern farming techniques and financial literacy. By diversifying their income sources and developing savings habits, families have been able to better plan for the future. The gender household approach proved particularly successful, encouraging families to engage in joint decision-making and resource allocation. This model has strengthened family businesses, with all members contributing to the shared vision and goals. Through such collaboration, Ethiopian coffee farming families have been able to better weather economic and environmental challenges.
Global Progress in ICP Projects
households were reached in 2023.
was the rate of women participating in project activities and trainings in 2023, compared to 35% in 2022.
was the adoption rate for Good Agricultural Practices, compared to 71% in 2022.
was the adoption rate for climate-smart agricultural practices, compared to 88% in 2022.
Participation is Key to Adoption
In Uganda, the new concept of Participatory Monitoring and Evaluation (PM&E) gained momentum. It is to be rolled out in all ICP project regions over the next few years. PM&E is a steered process through which stakeholders at various levels, including farmers, engage in monitoring and evaluating a particular project or program. Through PM&E, the stakeholders will also share control over the content, the process, and the results of their activity and engage in taking or identifying corrective actions.
In 2023, two PM&E exercises were conducted for 48 youth couple households in Uganda. The couples hosted demonstration and trial plots. A total of 364 participants comprised cooperative leaders and local government officials for the respective districts and sub counties where the 12 cooperatives are located. These meetings served to assess the level of adoption of Good Agricultural Practices (GAPs), climate-smart practices, household energy use, hygiene and sanitation, and gender household planning, using the PM&E assessment form and criteria. During the exercise, on-farm trainings and technical advice were also given to the host couples.
The demo host couples expressed the importance of the technical advice and guidance offered by the local government technical teams. They also appreciated the PM&E exercise as it gave them a chance to discuss, share their on-farm experiences and identify areas of improvement. The data was compared, and the findings indicated adoption of GAPs and climate-smart practices increased significantly.
Conclusion
Across all countries, ICP’s focus on income and crop diversification, gender equality, and youth empowerment in 2023 has helped smallholder farmers not only cope with immediate challenges but also build a foundation for long-term resilience. By providing farmers with the tools and knowledge to diversify their income streams, ICP has contributed to more stable livelihoods, better climate resilience, greater food security, and increased economic opportunities for all members of the farming community.