While your coffee may become cheaper when there are large fluctuations in the world market price, this puts a major additional psychological burden for the farmers who grow the coffee, a new study has found.

Dr Saurabh Singhal from Lancaster University Management School is one of the development economists involved in the new international study, which focuses on the effect income uncertainty has on the mental health of Vietnamese coffee farmers.

Results suggest it is not only poverty, but the risk of poverty caused by fluctuating prices, that has a significant additional negative effect on the mental well-being of farmers in low-income countries.

Dr Saurabh Singhal from Lancaster University Management School said: “Coffee prices are notoriously volatile, fluctuating due to factors like weather conditions, market demand, and global economic trends. Our results show that these fluctuations – by making future income uncertain - can have profound effects on the mental health and well-being of coffee farmers.”

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According to the World Health Organisation (WHO), poor mental health is one of the heaviest components of the global burden of disease. This burden is largely borne by people in low-income countries, as mental illness and poverty are closely linked. It is estimated that as much as 80% of the world's depressive disorders occur in low- and middle-income countries, but they are often overlooked, even though they should be at the centre of the struggle against the many dimensions of poverty.

"The soaring socio-economic costs of mental illness are rightly a growing international concern. It is therefore imperative to investigate the underlying sources of mental illness and formulate effective economic policy responses and social interventions," said co-author Finn Tarp, Professor at the University of Copenhagen and Coordinator of the Development Economics Research Group (DERG).

In Vietnam, volatile coffee prices contribute to the mental health burden by reducing farmers' expectations of future economic prospects, increasing their cognitive load and alcohol consumption - and by reducing farmers' social capital. They also have poorer health and lower levels of happiness, reducing overall well-being.

While focused on Vietnam, the authors suggest their results are likely to be transferable to other low- and middle-income countries whose populations are heavily dependent on agricultural exports, according to the researchers.

The study points to the need for effective social safety nets to protect smallholder farmers from price fluctuations on the world market.

Dr Singhal continues: “Addressing the mental health impacts of coffee price volatility requires a multifaceted approach. Initiatives that promote price stability, fair trade practices, and financial literacy among farmers are essential. So are programs that prioritise mental health support within farming communities, providing resources for coping with stress and building resilience.”

The study "Commodity price volatility and the psychological well-being of farmers" is published in the American Journal of Agricultural Economics and can be read here: https://onlinelibrary.wiley.com/doi/full/10.1111/ajae.12468