STiR coffee and tea magazine

42 STiR coffee and tea | 2025 Quarter 3 Autumn (Sep/Oct/Nov) By Mainbayar Badarch C Nepal Coffee: Scaling New Heights Much of Nepal's coffee is grown at high altitudes, on small plots of land surrounded by other crops, mainly using organic and regenerative methods. Photo credit: NCPA offee production in Nepal has increased tremendously over the last few decades. In 2005, it was only produced in 19 districts; now, around 44 districts out of 77 grow coffee. As cultivation areas and production expand, there have been some shifts in Nepal's coffee value chain. Previously, cooperatives and district-level collectors managed organized sourcing. However, the traditional sourcing model is dissolving at the up- stream level. Instead of a coordinated collection system, traders now directly engage with farmers, often in remote areas, offering spot payments. In other words, the supply chain has become more competitive. Today, multiple traders often compete directly in villages, offering high prices but disrupting consistency and traceability. While this shift creates more options for farmers, it also exposes structural weaknesses, leading to increased volatil- ity and a tendency towards short-term thinking. In an interview with STiR Coffee and Tea Media, Birgit Lienhart-Gyawali, founder of Kar. maCOFFEE shop, said, "We face the challenge of high demand and limited supply, which has led to unhealthy price developments and supply insecu- rity. To adapt, we've shifted our focus away from green bean exports and toward serving the domes- tic market with roasted coffee, supporting nano- lots, and developing direct trade relationships with producers." Lienhart-Gyawali is a German national who has been working in Nepal for over 20 years. Cur- rently, Kar.ma collaborates with coffee farmers in six villages and diverse local artisans to promote the country's offerings globally. According to her, a major ongoing challenge is the lack of transpar- ency and shared understanding in the value chain. Farmers are often unaware of how value is added after harvest, what drives quality, and how consistent supply and processing affect long-term partnerships. For them, coffee remains a side busi- ness that helps cover basic needs. To address this challenge, she has been in- vesting in a new model focused on transparency, education, and long-term collaboration along the supply chain. This approach provides farmers with access to financing, enhances quality and income, and encourages diversification into other crops or value-added products. Digital Payment Platform In 2023, Kar.maCOFFEE began piloting a cus- tomized digital payment and traceability model specifically designed for the needs of Nepal's cof- fee value chain. This initiative was developed in collaboration with a local fintech partner to ensure the system works in a rural context, is accessible offline and via mobile devices, and is user-friendly for both farmers and processors. There are 7,000 coffee shops in Nepal, many of which are starting to roast in-house or source from micro-roasters, helping to establish Nepal as a specialty coffee destination. Photo credit: Kar.maCOFFEE

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