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A European research team has found a link between coffee price volatility and psychological distress among farmers.
When it comes to future-proofing coffee, discussions often focus on strengthening the supply chain to ensure farmers, buyers, roasters, and consumers can continue to enjoy the commodity without concerns about scarcity. Yet, very few discussions have addressed the impact of market volatility on the mental health of those within the supply chain who depend on it for their livelihoods.
Dr Saurabh Singhal from Lancaster University in the United Kingdom and Co-Author Professor Finn Tarp from the University of Copenhagen in Denmark have published a study exploring the link between commodity price volatility and the psychological wellbeing of coffee farmers in Vietnam.
Coffee production in Vietnam has grown rapidly over the past three decades, from growing just 1.2 per cent of the world’s coffee in 1989 to today being the second-largest producer globally behind Brazil.
“It’s the top producer of Robusta coffee, and so the coffee sector is central to the country’s economy and dominates much of its labour market,” says Dr Singhal. “The supply chain is estimated to employ more than 34 per cent of working-age adults in coffee producing regions.”
Dr Singhal, with Prof Tarp and in collaboration with local partners in Vietnam, conducted the Vietnam Access to Resources Household Surveys (VARHS), a survey of rural households every two years from 2006 to 2020. It gathered in-depth data on rural life including land ownership, crop types, inputs, yields, wage employment, and household businesses.
It was through his involvement with the VARHS and interactions with Vietnamese coffee farmers that sparked Dr Singhal’s interest in the mental health challenges they face. He says understanding this is key to developing effective support systems and sustaining agricultural productivity.
As part of the study, Dr Singhal and Prof Tarp collected data on the mental health of the household head or spouse from the 2016 to 2020 period, using the Center for the Epidemiological Studies of Depression (CES-D) scale, which is widely used for screening depressive symptoms with questions on experiences of sadness, hopelessness, concentration issues, and sleep disturbances.
To measure income uncertainty, the duo quantified fluctuations of monthly international Robusta prices in the period leading up to each survey.
“Since coffee farmers cannot easily adjust their production in response to price changes as coffee trees take years to mature and are costly to replace, price instability directly translates to income uncertainty,” says Dr Singhal.
From this, Dr Singhal and Prof Tarp found strong evidence that rising volatility in international coffee prices leads to increased psychological distress, poorer overall health, and lower happiness levels among coffee farmers.
“When coffee price volatility rises by roughly 11 per cent of a typical farmer’s household income – the prevalence of depressive symptoms increases by 15 per cent,” he says.
“This uncertainty makes it hard to plan and budget, which leads to constant worry. This ongoing mental strain can exhaust mental resources, impairing memory, focus, and overall cognitive function.”
Additionally, decreased cognitive function and the stress of economic uncertainty often lead to individuals withdrawing from social gatherings, creating a flow-on effect. Dr Singhal says this may be because they want to save money or simply do not want to socialise during challenging times.
To mitigate the effects of commodity price volatility and economic uncertainty, he says providing social safety nets is crucial to protect small farmers from unpredictable price changes.
“Market tools such as futures, forward contracts, and price or revenue insurance could help farmers manage these risks, but they are often not accessible in developing countries,” he says.
“Governments should explore ways to make these financial instruments available and offer training programs to help farmers use them effectively, thereby stabilising their incomes.”
He adds that supporting initiatives such as Fairtrade certification can also play a significant role.
“By guaranteeing a minimum price that covers the cost of sustainable production, Fairtrade reduces income uncertainty and offers farmers a financial safety net,” he says.
With climate change a major source of income uncertainty for agricultural communities, Dr Singhal believes more research needs to be done to explore its potential impact on farmers’ mental health.
“Evaluating the psychological impact of tools like crop insurance, forward contracts, and community-based support programs would provide valuable insights into what works best to support farmers’ mental wellbeing,” he says.
“Research should also consider the role of digital financial services and innovations that could help farmers better manage risks.”
This article was first published in the January/February 2025 edition of Global Coffee Report. Read more HERE.
The post The impact of price volatility on coffee farmers appeared first on Global Coffee Report.
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