Translating the Adaptation of Ethiopian Coffee Farmers to Higher Temperatures into Economic Costs and Price Premiums: A Community-Based Breakeven Cost Approach

A broad spectrum of climate models predict substantial changes in coffee landscape configurations that will disproportionately affect 25 million smallholder coffee farmers in the Global South. Most studies and modeling, however, do not inform farmers who struggle with low yields, insufficient market instruments, and climate vulnerability, nor stakeholders -i.e., importers, retailers, and consumers- interested in supporting smallholders who provide around 70% of the coffee supply. Smallholders' input is rarely part of climate risk assessments, and general conclusions and scenarios overlook local context, farmers' capabilities, and their contributions to identifying solutions ¹ . To better connect farmers' needs with research, we go back to the basics of cost analysis and incorporate their knowledge and reported climate adaptation strategies. In particular, and in collaboration with 202 Ethiopian smallholder coffee farmers, we assessed farmers' capacity to adapt to perceived higher temperatures across all stages of coffee production based on the real costs they face, the practices they implement, and the associated profitability. Limitations in farmers' economic ability to increase short-term productivity suggest that a 35-cent price premium may compensate for the extra costs borne by farmers due to higher temperatures. This premium is comparable with other voluntary sustainability standards supporting social and conservation goals. Our research advances the integration of smallholder coffee growers' knowledge for grounded climate action, suggesting actionable and context-based strategies.