Coffee farming in Nepal is proven as promising due to the availability of soil with fragile nature and appropriate climate in the mid hills at an altitude of 1100 meter and above from where the series of Himalayas with fresh and cool air can be viewed - suitable for high grown specialty coffee. Coffee is produced in more than 30 districts in Nepal. The Commercially significant districts are: Lalitpur. Syangja, Gulmi, Kaski, Palpa, and Kavrepalanchowk The areas with commercial orientation are Nuwakot, Parbat, Tanahun, Gorkha and Lamjung. Other areas emerging as coffee producing area in Nepal are Ilam, Sankhuwashawa, Dhading, Baglung, Makwanpur, Jhapa, Panchthar, Surkhet, Terhathum, and Sindhupalchowk. Arabica and Robusta are the commercial varieties of coffee grown in the world. Where Arabica shares more than 65 percent and the rest are Robusta. Bourbon and Typica are the known varieties for the specialty quality with in the Arabica which are the major variety grown in Nepal.

More than 20,000 small holders have planted coffee in about 1450 ha of land with a production of 265MT dry parchment in the year 2007-08. Majority of growers are small and poor farmers, usually no chemical fertilizer and insecticide/ pesticide applied. Majority does not even weed and manure coffee plants. As the Coffee originates from the subtropical forest eco-system of the Ethiopian high lands, where it grows under the shade of a variety of trees. Farmers have created coffee’s original growing conditions on diversified agro-forestry systems creating the foundations for organic coffee cultivation. For its vibrant quality, Nepali coffee have been exported to different parts of the world mostly to Japan, America, and Korea and European countries since last many years. Of the total production 65% is exported and the rest consumed in the domestic market. There is increasing demand for Nepal Coffee for its specialty quality.

Coffee produced in Nepal is Organic and fair trade.

Coffee is relatively a new cash crop started growing in Nepal almost with no inorganic fertilizers and pesticides use. It could be an important occupation in the rural economics with massive participation of marginal, poor and down trodden class of the rural communities. Additionally, it could be an important means for the soil conservation, biodiversity maintenance and watershed management in the mid-hills of Nepal.

Initially, coffee was planted as a contour plant for soil erosion control and other environmental protection practices. So the farmers regard coffee as an easy crop to grow, and agronomic ally less demanding. Usually no chemical fertilizers and insecticides/pesticides are applied. However, in those areas where infrastructure (roads, communication and other services) is well developed farmers might be using some external inputs like chemical fertilizer and pesticide in companion/inter crops specially in vegetables and fruits where commercial production of these crops exist. In Nepal, the majority of coffee producers are resource poor smallholder farmers. Coffee is predominantly planted in upland area as an additional/extra crop without disturbing the existing cropping system and on steep hillsides where other crops do not perform well under low input and low management conditions. There are few farmers who have started planting coffee under shade in larger number replacing the maize crop. The coffee production management system in Nepal can be categories according to the following :

Production, processing and marketing of coffee in Nepal

After the introduction of coffee in Nepal by the Monk Hira Giri in Aanpchaur, Gulmi in 1938 AD, the crop remained unnoticed as a curiosity crop until 1970s. In late seventies, expansion of coffee as commercial crop to some extent took place when HMG imported coffee seed from India for distribution. The major shift to commercial coffee production took place in mid eighteens when the coffee producers were able to sell coffee after the establishment of Nepal Coffee Company (NeCCo) in Manigram, Rupandehi district, in 1983/84 who collected dry cherry from the coffee producers and processed the coffee for domestic market. Until early 2000, coffee producers were not very sure of coffee being a source of income or income generating crop due to the market problem. However, after the year 2002, substantial increase in the export and also increase in domestic market consumption to some extent motivated coffee producers to consider coffee as a major income generating crop.

Nepalese coffee is readily accepted as a specialty coffee in specific international markets. However, the challenge is to improve the quality of coffee and produce coffee in a sustainable way.

Area and Production of Coffee in Nepal

Coffee is presently known to be grown in about forty districts in Nepal. However, the coffee growing districts in Eastern Development Region (EDR) are not very suitable for coffee due to higher rainfall and probability of higher incidence of diseases and pests. Since coffee producers do not use chemical pest control measures, incidence of any disease in the eastern region could spread the diseases to other parts of the country too. Besides, EDR is the tea producing area and expansion of coffee in EDR will have to compete with tea for available resources and market. The districts in far-west and mid-west development regions have low potential for coffee production due to the frequent drought problem. The major coffee growing districts where substantial amount of coffee being traded lie in Central and Western Development Regions namely Gulmi, Palpa, Arghakhanchi, Baglung, Syangja, Parbat, Kaski, Lamjung, Gorkha and Tanahu in the Western Region and Lalitpur, Sindhupalchowk, Kavre, Dhading and Ramechhap in Central Development Region.

Coffee Processing in Nepal

Quality of coffee produced not only depends on the coffee production management, but also post-harvest processing management at village and processor’s (central) level. Preparing the harvested coffee cherries for market requires that the cherries be processed to separate the beans from the fruit. Coffee is processed mainly by either the wet or the dry method to produce green beans. Until the year 2001, dry processing of coffee was predominantly practiced in Nepal where cherries are harvested and dried at the farm level enabling the producers to store the dry cherry for longer time without deteriorating the quality. The processors/traders procure the dry cherries from the producers and process (drying, hulling and sorting) the dry cherry to produce green beans for international market and roast and grind the beans for domestic market.

In the wet processing, the coffee is pulped, fermented, washed and dried to produce dry parchment at the village level. Dry parchment is collected and transported to the central processing centre. Then the processors hull the parchment to produce green beans.

Estimation of dry and wet processed green beans marketed in 2004 and 2005 (Table 1) shows that the production of wet processed green beans has more than doubled from 2004 (27% of total green bean marketed) to 2005 (58% of total). The trend on increase in amount of wet processed green beans will be continued until the international buyers are interested on it and continuous effort will be done to improve the quality of coffee at village and processor level.

To further improve the quality of coffee, study on wet processing needs to be done and the technology used at present should be improved. Monitoring of the pulping centers are also essential to provide on the spot technical assistance and collect information on collection of fresh cherry and production and sale of dry parchment. Testing of different types of pulpers in 2004 and 2005 has shown that drum pulper is appropriate for pulping bigger amount of fresh cherry (CoPP 2004 and 2005).

Coffee marketing in Nepal

In Nepal, coffee is predominantly consumed in the form of imported instant coffee, which is easy to prepare. The consumption of Nepali/filter coffee in Nepalese society is so far limited to elite groups. The domestic Nepali/filter coffee market relies on the tourists, expatriates and higher income Nepalese. The present situation of the domestic market is not stable, and it is highly dependent on the number of tourists visiting Nepal. The sale of Nepali coffee varies proportionately with the increase or decrease in the number of incoming tourists.

Though quality of coffee produced in Nepal has potential both for domestic and international market, there is still much has to be done to upgrade and bring consistency in the quality of coffee. Nepal can not compete with other coffee producing countries by producing regular coffee. Nepal is producing limited quantity of high quality specialty coffee and regular coffee produced else where are cheaper as compared to Nepalese coffee. Target of the Nepal should be the niche market by producing better quality coffee. Research and analysis done by Mr. Daniel Giovannucci for The Nepal Tree Crop Global Development Alliance, Winrock International recommended to focus on quality and consistency than volume of production with greater attention on productivity ( Giovannucci 2005).

Targeted market and requirements of coffee production and processing of the major processor/traders in Nepal shows that Arabica coffee grown with shade under organic management system and processed with wet processing system need to be the focus to develop coffee sub-sector.

Scope for organic coffee production in Nepal

Western countries have developed extensive legislation for organic products. The conditions that must be met before coffee may be marketed as organic are both comprehensive and well defined. No coffee may be brought to the marketplace and labeled organic unless it is proved to conform to the regulations. In other words, coffee can be marketed as organic only when it is certified as such by a recognized organization or certifier, based on regular inspection of all stages of production, processing, transporting and roasting of the coffee.

Growing any organic product, including organic coffee, is more than just leaving out fertilizers and other agro-chemicals. Coffee produced in this way should instead be called 'natural' coffee and, to the surprise of many, the industry looks upon this as non-sustainable production. This is because, in the long run, the soil will be depleted by natural production, which is often referred to also as 'passive cultivation' or 'organic by default'.

For production of organic coffees i.e. to achieve sustainable production, a high level of technology is not required, but a commitment to improve the productivity and quality of coffee through use of locally available resources at right time is required. In organic coffee production, agronomic practices like soil conservation, composting, manual weeding, recycling of organic wastes, shade management, etc., form the essential requirements, which demands larger amount of labor. The principle of sustainable agriculture is that a value corresponding to that harvested should be returned to the soil. All possible methods have to be used to enhance the fertility of the soil. This is why passive production of coffee, even when no chemicals are used, is viewed as non-sustainable and not as organic. As the demand for animal manure is high, appropriate measures like sufficient live stock with fodder and forage crops is essential which again demands greater labor requirement. Thus labor is an important investment in organic coffee production.