Ag Department should go back to the drawing board for proposed coffee standards

I have no confidence in the public testimony model the Hawaii Department of Agriculture is using to seek public input and to make changes to the grading rules for Kona coffee. They set up the meeting, farmers come with different opinions, the press writes a story and the HDOA goes off and does whatever they want to do because there is no obvious consensus. In addition, this amendment change was sprung on the industry with no forewarning. Coffee growers are in the middle of the coffee harvest season and they are busy in the field, with little time for thought and participation in a public process. The HDOA should put this rule making change on hold and give some thought to include growers, processors, coffee organizations and academia in a consensus building process that will address a much-needed rule change that will ensure coffee quality and provide a strong basis for integrity within the industry.

The HDOA has submitted a long laundry list of proposed changes to the administrative rules for Standards of Coffee. The list includes new requirements, new fees, new amendments and repeal of some existing rules. It appears that the Quality Assurance division of HDOA thinks it can micro-manage the many small coffee growers by giving them an increased burden of bureaucratic nonsense. The entire coffee industry should stand together and reject these proposals. It does nothing to assure quality and integrity of the Kona coffee industry. It needs to go back to the drawing board.

Public testimony pointed out that wording in the Standards for Coffee is misleading. It clearly is not intuitive. Does anyone associate extra-fancy or fancy with size? Why is estate not a grade in the Standards for Coffee? Estate coffee contains the full range of bean sizes and can meet all of the other criteria for coffee grade. In addition, estate roasts have won many statewide cupping contests. It should be included as a grade.

Washington apple grading standards would be an excellent source for study to bring clarity to the wording of the coffee standards. It was the first and most rigid standard to be adopted in the nation going back to 1915. It deals with the internal condition and appearance for a diverse array of apple varieties in what has become a $1 billion worldwide business for the state.

This year is the third harvest season following discovery of the coffee berry borer in Hawaii and the quality of Kona coffee is being negatively impacted. This was clearly pointed out in the Greenwell White Paper published earlier this year. During the past two years, some processors have paid top dollar for coffee that was 100 percent infected with the pest. Many bags were never opened and inspected when purchased. This junk coffee is finding its way into the marketplace as either green or roast and will erode the reputation of the Kona coffee industry. In some ways, the effect will be no different than when fraud was used to sell counterfeit coffee during the Kona Kai debacle. Quality and integrity are important to maintain high market prices.

In July, 1989, the HDOA received a 64-page final report titled: “The Markets and Marketing Issues of the Kona Coffee Industry” authored by economists from the University of Hawaii. In chapter IV of the report, the authors summarized the importance of quality to the industry. “Quality is a cornerstone of the Kona Coffee Industry. Without high quality, it is doubtful that the current industry would survive for very long. We can trace out a likely scenario: High prices are a powerful temptation to sell lower-quality product, but if enough producers sell low-quality coffee, consumers will learn to associate low quality with the product. The practice will alienate consumers, who will switch to other coffees of equal quality but lower price. The consumer will not believe claims of high quality, so will not continue to pay a premium. Without high prices, the incentive to produce and maintain high quality is eliminated, and most of the current growers, processors, roasters and related entities would find it unprofitable to handle Kona coffee. Only low quality coffee would be produced and sold. For the industry in general, bad coffee will drive out good coffee.”

The Kona Kai connection? Some four years later over 3 million pounds of cheap coffee was bought and resold as “Pure Kona Coffee.” The resulting fraud seriously damaged the reputation of the Kona coffee industry. One of the suggested changes in the HDOA laundry list was to increase the per page certification fee a whopping 4,800 percent. There is a better way to raise necessary funds for HDOA. Virtually all of the foreign green coffee imported to Hawaii comes into Oahu. Simply impose an import duty tax on every foreign pound of green beans entering the state at a rate of $1 per pound. If 1 million pounds are imported, that would fund a $1 million budget. Yes, the blenders will cry foul and threaten to move their roasting facility out of Hawaii if the duty is implemented. The politicians will wring their hands and equivocate, but in the end it would be a relatively painless way to provide a huge boost to the Kona coffee industry. The benefits to the industry and state are compelling:

c Funds would be available to hire inspectors to properly implement consistent coffee certification in a timely manner.

c It would narrow the price disparity between 10 percent Kona blend and 100 percent Kona.

c Funds would be available to educate and clarify coffee grading standards with the consumer markets.

c Finally, it could be a funding source used to support efforts to control the coffee berry borer in the Kona coffee land and to prevent its spread to other coffee growing regions in the state.

Ray Anders is a coffee farmer and a past board member of the Kona Coffee Farmers Association. He lives in Captain Cook.

Viewpoint articles are the opinion of the writer and not necessarily the opinion of West Hawaii Today.