Pricing Coffee Cherry to Incentivize Farmers and Improve Quality


August 2, 2017 - FSP AGLC Team

FSP AGLC Team. 2017. Pricing Coffee Cherry to Incentivize Farmers and Improve Quality. Feed the Future Innovation Lab for Food Security Policy Research Brief 43. East Lansing: Michigan State University


Given the higher prices paid for specialty coffee, the growing demand for fully-washed Arabica, and Rwanda’s own comparative advantage, the country is shifting the focus of its coffee industry away from low-priced, commodity grade coffees (Source: NAEB, Medium Term Strategic Plan, 2013-2018, pg. 9). Unfortunately, some structures and policies are not designed to maximize Rwanda’s potential for quality coffee—but there is room to develop new, beneficial policies. NAEB annually sets a cherry price in consultation with key coffee sector stakeholders, some of whom are heavily invested in trading lower grades of coffee. Buyers of low-grade coffee have few, if any, quality requirements. Their need for low-cost cherry sometimes drags down the minimum cherry floor price from what it could be if it were set to truly incentivize farmers to produce high-quality cherry for the specialty coffee market. Therefore, policies to allow and promote new ways to price cherry, allowing separate prices for low- and high-grade coffees, could be considered for testing and evaluation.



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