China is renowned as the Land of Tea, but fewer people know that it is also an exporter of coffee. The country ships Arabica coffee beans to overseas markets, including the U.S., Japan, and Singapore. China also supplies coffee beans to multinational companies like Nestle and Starbucks, which provide many coffee drinkers with their daily fix.
It was French missionaries who first brought coffee to China in the late 19th century. The earliest coffee plantations are in the foothills of the Gao Li Gong Mountains in Yunnan province near the border with northern Myanmar. At an altitude of 3,000 meters to 4,000 meters above sea level, this is a conducive environment for growing quality Arabica coffee beans, with its fertile soil and a year-round average temperature of 21.3 degrees Celsius.
Many of the coffee farmers belong to the Li Su ethnic group. The name Li Su means "those who have come down from the roof of the world." Historians believe that the Li Su originated from a Tibetan kingdom in the 10th century before moving down to Yunnan. They were skilled hunters and slash-and-burn growers who lived in the dense forests of the mountains. But the steep terrain and soil erosion made it difficult to support themselves on agriculture.
The Li Su made their way down to the gentler plains of the Lujiang valley in search of land they could rent to grow cash crops. However, even with decades of experience in cultivating coffee, they found it difficult to make ends meet.
Yan Xiu Deng, 29, is a member of the Li Su ethnic group who lives together with his uncle and younger brother in Baoshan, Yunnan. They grew corn, sugar cane, and later, coffee. But falling prices in recent years have made cultivating coffee much less profitable. Yan made less than 3,000 yuan a year after deducting the costs of fertilizer and labor.
The problem lies in the coffee supply chain. Growers get about 17.1 yuan per kg for the coffee beans, according to data from Jing Daily. In comparison, the middlemen who process the coffee beans receive 83 yuan per kg. By the time the coffee gets to downstream retailers, the coffee fetches a whopping 1,567 yuan per kg.
In other words, upstream farmers received only 1% of the value of the coffee that consumers enjoy. Unless this changes, these farmers will find it difficult to escape poverty, no matter how hard they work.
As the leading online agricultural marketplace in China, Pinduoduo has worked to raise farmer incomes so that they can invest in boosting productivity and quality. At the same time, Pinduoduo seeks to ensure its close to 700 million users receive high-quality and value-for-money products.
Through its Duo Duo Farm initiative, Pinduoduo tackles the two seemingly contradictory goals by partnering with local authorities and agricultural institutes to raise farm productivity, build premium brands, and improve market access through e-commerce.
By connecting the "first mile" of the coffee production supply chain with the consumers at the "last mile," farmers can bypass the middlemen and gain more of their labor value.
In Baoshan, Pinduoduo worked with the Yunnan Institute of Tropical Cash Crops to select high-quality coffee varieties suitable for the climate and soil conditions. The farmers at the inaugural Duo Duo Farm in Baoshan received training from agronomists on how to change their coffee variety with minimal disruption. They also learned about different methods for the initial processing of coffee beans.
At the same time, Pinduoduo facilitated these coffee farmers' partnerships with nearby coffee processors and provided data and marketing support to help these coffee farmers kickstart their sales on the platform.
Pinduoduo also provided training to the farmers on how to sell on the Pinduoduo platform. It also gave farming suggestions such as the predicted purchase pattern for crops and delivery schedules. With more information available, farmers can better plan their planting schedules and become merchants on Pinduoduo. They can also form co-ops with neighboring farmers to ensure more control over pricing and earn more from their harvest.
By doing so, coffee farmers can enjoy more of the fruits of their labor bringing millions of people their favorite beverage.