Mr. Appa Sherpa
Director, Nuwa Estate Coffee
As the global economy comes to a standstill, various sectors have suffered setbacks that only worsens as the pandemic prolongs. Like many other sectors, agriculture also has its fair share of issues owing to the current crisis. Nepal, which is an agricultural country with the sector contributing highest to the nation’s economy, has to overcome various challenges ahead in order to recover from the devastating effect of the current crisis. In the past few years, within the agriculture sector, coffee production in Nepal has been getting immense attention. In 2018, Nepal exported coffee worth approximately USD 1 million. With an aim to understand the impact of the current situation in agriculture, particularly Nepal’s coffee sector, NEF sought insights from Mr. Appa Sherpa, Director of Nuwa Estate Coffee. Along with this, the future of the global coffee market post the current pandemic and initiatives required from various stakeholders in the coffee sector of Nepal was highlighted.
Impact on the coffee sector due to the Covid-19 pandemic and ensuing lockdown
Like most businesses, the coffee sector too has seen an immense dip in sales both locally and internationally. The lockdown implementation (a positive step by the government for our own well-being and safety) has forced the coffee industry to be limited to supermarket shelves and door deliveries, all planned exports have come to a standstill with an uncertain future to international demand. While, on a positive note we are doing our utmost to not let the farm activities be hindered as a result of the current pandemic. Our estate workers are taking care of the coffee plants, simultaneously the estate managers are monitoring the health of the estate workers, implementing social distancing, hygiene norms and health checks at the start of each day.
Business’s support to farmers and aggregators in managing their activities
Nuwa Estate Coffee has been supporting local coffee farmers and aggregators since 2007. We have worked closely with all coffee related activities in Nuwakot region, educating people about coffee, purchasing outputs from small-scale farmers to aggregators, creating origin trips for our international buyers and copious strides to enhance both local and international demand for Nepali coffee.
Nepal Green Tara Foundation (NGTF) the spearhead of our company’s CSR has been pivotal for us to continue maintaining a healthy relationship with the locals in the region. The motto of NGTF is to “Fight Poverty with Education” till date NGTF has constructed six schools in Nepal. For around two years, we have been working along the same ideals and principles with coffee farmers in Solukhumbu region, so they too can reap the benefits of farming coffee.
We will continue to support all the farmers and aggregators in our supply chain as well as the communities through our initiatives. Activities and work at the estate have not been disturbed but the lockdown may present a situation with returnee migrant workers and we would be happy to employ them to support their livelihoods. However, despite providing knowledge and training to the farmers and aggregators on crop management and coffee farming as a business, adoption of such practices is still weak. Therefore, support on strengthening the farmers’ capacities is an area where other technical knowledge partners could provide a value add.
Future of global coffee market post the Covid-19 pandemic
This is completely new territory for the coffee industry; coffee consumption is now reformed from out-of-home consumption to online purchases and at-home consumption. In a recent publication by the International Coffee Organization (ICO) in relation to the impact of COVID-19 on the global coffee sector, the ICO depicts a scenario rendering a decline in consumption worldwide but have emphasized that coffee demand is not sternly affected by deviations in consumer income. In my personal opinion, coffee consumption, globally, will remain fairly resilient and coffee prices may fluctuate depending on the market. Consumer loyalty will be one of the key tools for most coffee companies to overcome this crisis.
Support initiatives by the government for the coffee sector as a priority cash crop
The government have issued various grants towards Nepal Tea and Coffee. Such grants are crucial for technological advancements, implementation of new farming practices, employment of international quality coffee consultants and other various steps to improve the Nepali coffee industry. We strongly feel that the government should roll out strenuous and diligent practices when working with grants, so as to impede and end the abuse of such positive steps taken by the government.
Intervention needed from the private sector and the government to manage demand for Nepal’s special coffee
In the international market, majority of the coffee buyers view Nepal as a new origin crop and the requirement for Nepali coffee is mounting every year. This statement adheres to both domestic and international market. With growing demand and limited supply of quality beans, we feel that Nepal needs to have more coffee planters rather than aggregators and middle-men. Private sector investment and admittance into this cash crop commodity will not only benefit the individual but also our nation. As for government intervention, they should provide financial and knowledge based incentives to existing coffee companies in order to rectify, convalesced and enrich the Nepali coffee industry.
The above Expert Speak edition is based on the conversation with Mr. Appa Sherpa. He is the Director at Nuwa Estate Coffee.