Regenerative agriculture in coffee, part 1: livelihoods

Regenerative agriculture in coffee production · Part 1

Regenerative agriculture and living income

Concepts, empirical evidence and what they mean for coffee farmers in Thailand's highlands

The structural vulnerability of smallholders

Today, smallholder coffee farmers in producing countries face two pressures that reinforce each other structurally. The first is volatile world market prices (price volatility), over which farmers have almost no bargaining power. The second is climate variability — longer droughts, shifting rainfall and rising temperatures — which erodes both the quantity and the quality of the crop. In northern Thailand there is a further layer: air pollution (PM 2.5), tied to burning and the intensive use of highland land, which adds still more pressure.

Hillkoff, a local coffee company that promotes highland farmers' livelihoods and has produced Thai coffee for more than 50 years, has found that the current coffee model may not be secure or sustainable in the long run. The company has long supported its member farmers through regenerative and organic farming, and so it studied how the problem is being tackled in many countries.

Sustainable Food Lab and TechnoServe (2026) show that farmer poverty and unsustainable production are linked problems, and propose that “regenerative agriculture” and “living income” each act as both an enabler and an outcome of the other.

Framework: the reinforcing loop

The key mechanism the report presents is a reinforcing relationship between three elements: (a) adopting regenerative practices, (b) higher and more stable income, and (c) savings and farm resilience. When a household has enough income and savings, it can make multi-year investments and carry the risks of the transition period. In turn, restoring the ecosystem lowers costs, raises yields and returns a stable income.

Figure 1 — The reinforcing loop between regenerative practices, income and farm resilience (adapted from SFL & TechnoServe, 2026)

Evidence from seven countries

The modelling uses representative households (archetypes) of smallholder coffee farmers in seven countries — Honduras, Kenya, Uganda, Ethiopia, Vietnam, Peru and Indonesia — and compares household income with the living income benchmark under the Anker methodology (Anker Research Institute).

+62% average net farm income -38% greenhouse gas emissions +30% exports

Source: TechnoServe (2025)

Kenya (A) +196% Indonesia (R) +175% Uganda (R) +101% Peru (A) +92% Ethiopia (A) +88% Honduras (A) +84% Vietnam (R) +36% Sector-wide average net farm income +62%

Figure 1 — Estimated increase in coffee income by country (range +36% to +196%)

Figure 1 shows that the size of the return varies: the representative households' coffee income rises by about 36% (Vietnam) to 196% (Kenya), while the sector-wide average net farm income rises by about 62%. The spread shows why the analysis has to be done area by area, rather than applying one average to every context.

3.1 Time to return: when do these figures happen?

The income gains in Figure 1 do not arrive in the first year. They are an “elevated steady-state income” reached after a transition. TechnoServe's model (2025) frames the investment as a 7-year cycle, with part of the transition funding meant to “cushion the drop in income in the early years before all the practices take full effect”. In most cases income falls first (the “J-curve” examined in depth in Part 2), then recovers and climbs to a higher level than before.

The time to return differs by species, by how far the practices change, and by country context. The chart and table below summarise the approximate timings from the report's country annexes.

Vietnam (R) year 4 Kenya (A) year 5 Uganda (R) year 5 Peru (A) year 5 Honduras (A) year 6 Ethiopia (A) year 6 Indonesia (R) year 7 Income dip Recovery and growth Steady-state income

Figure 1b — Approximate time until income reaches the higher steady state, by country

Practices centred on nutrient management and pruning (as in Kenya and Vietnam) pay off quickly with almost no negative-income period, while approaches that require replanting or new shade trees (as in Peru, Honduras and Indonesia) bring a deeper dip and take longer to pay back. Overall, farmers should plan on a horizon of about 5–7 years before a new, stable level of income appears.

Technical definitions: living income and living wage

The two terms are often used interchangeably by mistake, although they apply to different groups. Both are “target benchmarks” used to measure a household's progress.

Living income

The annual net income of the whole household from all sources combined that is enough for a decent standard of living for every member.

Applies to: the self-employed, such as farmers who own their farm

Living wage

The wage an employee earns for a standard working week that is enough for a decent standard of living for the worker and their family.

Applies to: hired labour, such as cherry pickers or processing workers

Both differ from the “legal minimum wage” and the “poverty line”, which reflect a “survival” level rather than a level at which people “live with dignity”, and both rest on the same Anker methodology (Living Income Community of Practice; Anker Research Institute).

Closing the living income gap

The living income gap is the difference between the benchmark and a household's actual income. The chart below compares household income as a share of the benchmark before and after adopting regenerative agriculture.

Benchmark 100% 26 50 Indonesia

(R) 26 53 Peru

(A) 35 46 Uganda

(R) 51 89 Honduras

(A) 64 79 Kenya

(A) 75 109 Ethiopia

(A) 81 101 Vietnam

(R) Before regenerative agriculture After regenerative agriculture

Figure 2 — Household income against the living income benchmark before and after adopting regenerative agriculture (7 countries, % of benchmark)

The analysis indicates that representative households in Ethiopia and Vietnam can reach a living income through regenerative agriculture alone, and that the gap narrows significantly in Kenya and Honduras. Uganda, Peru and Indonesia, however, still face a gap of around half the benchmark, mainly because of small farm size, low productivity or high production costs (SFL & TechnoServe, 2026). This finding underlines that regenerative agriculture is not a “cure-all”: it has to be combined with income diversification and fair pricing mechanisms (covered in Part 3).

What this means for coffee farmers in Thailand's highlands

The study above does not cover Thailand, so its figures should be taken as a guide rather than as numbers for Thai farmers. Even so, the shade-grown, rain-fed Arabica group — Ethiopia, Kenya, Honduras and Peru — is closest to production on Thailand's high mountains. The shade-grown coffee model promoted by the Royal Project Foundation and the Highland Research and Development Institute (HRDI), and the philosophy of “three kinds of forest, four kinds of benefit”, already fit the principles of regenerative agriculture. Thailand's task is therefore to “make it systematic” rather than to start from zero.

Before acting in the plantation (Part 2), farmers should start by assessing their own figures:

1Last year's net household income 2The share of income from coffee compared with other sources 3The largest single cost

to decide whether raising productivity, cutting costs or diversifying income should come first.

Comparing living income benchmarks by country (including Thailand)

The chart and table below bring together country data to compare living income benchmarks. Countries differ widely because the benchmark reflects the local cost of living. Figures are annual household income in US dollars.

Ethiopia (A) $1,857 Uganda (R) $2,124 Kenya (A) $2,688 Indonesia (R) $4,150 Vietnam (R) $5,076 Thailand — rural NE* $5,868 Peru (A) $7,554 Honduras (A) $8,940 Living income benchmark (study countries) Rural Thai reference value (not specific to coffee)

Figure 5 — Living income benchmarks by country, including Thailand (per household per year)

*The Thai figure is for a typical rural household in the Northeast (tobacco/rice), annualised. It is a general reference value, not a figure specific to highland coffee.

References

1. Sustainable Food Lab & TechnoServe. (2026). Fostering Resilience: Regenerative Agriculture and Living Income. Hartland, VT.
2. TechnoServe. (2025). The Regenerative Coffee Investment Case.
3. Living Income Community of Practice; Anker Research Institute. Living income benchmarks and methodology.
4. Anker Research Institute / Global Living Wage Coalition. (2024–2025). Living Wage and Living Income Report: Rural Roi Et and Nakhon Phanom, and Reference Value for Urban Thailand.
5. Highland Research and Development Institute (HRDI) and the Royal Project Foundation. Knowledge on shade-grown Arabica coffee production in the highlands, and coffee extension data.
6. Office of Agricultural Economics (OAE). Coffee production data for Chiang Mai; Chiang Rai Province Coffee Strategy 2026.