UNCW Researcher Part of NSF Grant to Explore Economics of Sustainable Coffee

Thursday, May 26, 2022

UNCW Economics Professor Peter Schuhmann has been awarded $55,278 as part of a more than $3 million grant from the National Science Foundation to investigate a new sustainable system for coffee cultivation.  
The grant, “GCR: Collaborative Research: Designing a Sustainable Agriculture Production System through Convergence Research Using a Multi-Scale Ecosystems Approach,” is funded for two years with an additional three years possible. It is part of the NSF’s support of convergence research, which brings together knowledge, methods and expertise from different disciplines to solve complicated societal problems.  
“That's the most exciting part about this—it's a truly interdisciplinary team,” Schuhmann said. 
Five universities and two outside groups have banded together to experiment with an innovative approach to coffee farming in Honduras. The grant study is led by Caz Taylor, an ecologist at Tulane University, and includes experts in biology and economics from University of Massachusetts Amherst, Indiana University of Pennsylvania, and the Universidad Nacional Autonoma de Honduras, as well as support from the Mesoamerican Development Institute and Birding Coffee. 
Called integrated open canopy cultivation, the approach integrates the natural forest into the coffee farm landscape. “Not purposefully planted banana trees or other fruits and vegetables that coffee farmers might grow to supplement their income or to supplement their food,” Schuhmann clarified, “but rather, the native forest plants that would naturally grow there.” 
The researchers believe that this could help coffee cultivation in at least three ways. First, the forest acts as a wind buffer, which stops the spread of wind-borne pathogens such as the leaf rust fungus, which can destroy a coffee farm. The forest also attracts birds, which will feed on the destructive coffee borer beetle, and bees, which will increase pollination. 
“A big part of this NSF project is doing sort of natural science experiments on coffee farms in Honduras to test those three hypotheses,” Schuhmann said. 
To reduce forest clearing, the IOC method also calls for using solar panel dryers to dry the coffee beans rather than wood-fired kilns. By allowing the native forests to regenerate and by slowing the rate of deforestation, landowners can earn marketable carbon credits.  
“Our goal is to model this entire system mathematically and statistically,” Schuhmann said, “and try to find the trade-offs.” 
Schuhmann will use choice experiments to understand the decisions people make in running the coffee farms and in wholesale coffee purchases. The methodology highlights how a variety of factors affect adoption of sustainable practices and how coffee production characteristics affect wholesale coffee prices. 
“This is my part, the economics of it,” Schuhmann said. “Basically, trying to figure out what goods and services provided by the natural environment are worth in dollars.” 
Schuhmann has worked throughout his career to answer variations on that question.  
“He’s built a nice set of tools for determining non-market valuation,” said Adam Jones, chair of the Economic and Finance Department in the Cameron School of Business. “If you want to know what gets people to make changes, you have to find a way to put numbers to that.” 
Schuhmann has been involved in more than 20 studies involving choice experiments in different contexts since a research assignment in Barbados in 2007. 
Dr. Schuhmann’s NSF-funded work is a good example of a faculty member putting their research and scholarly expertise to work,” said Stuart Borrett, associate provost for research and innovation. “In this case, the project will generate new knowledge about the adoption of sustainable coffee production in Honduras, which may help improve the coffee production and the producers.” 
The IOC method is already seeing success, with about 20 farms in the Yoro region of Honduras producing coffee now sold under the name Café Solar. 
“This is really sustainable coffee,” Schuhmann said. “How much more are you willing to pay?” 
-- Stacie Greene Hidek