Monetizing Coffee Leaves and Fruit to Fund Regenerative Agriculture: A Case Study in Puerto Rico

Abstract

Coffee cultivation sustains more than 100 million livelihoods but illustrates agriculture’s environmental paradox: 70–80 % of smallholder households earn below living-income thresholds while contributing disproportionately to deforestation, biodiversity loss, and climate change. Regenerative agroforestry can restore ecosystems through enhanced biodiversity, carbon sequestration, and soil health, yet adoption remains limited by a “worse-before-better” gap of 10%–25 % yield penalties and establishment costs of $1,500–$3,000 per hectare. Existing instruments, including certifications, carbon credits, and subsidies, have not closed the estimated $4 billion global transition-financing gap. This thesis examined whether monetizing under-utilized coffee-plant biomass can bridge that gap. A 10-acre case study at Copper Hill Farm (Puerto Rico) modeled six management scenarios over 10 years using stochastic NPV and Monte Carlo analysis. The Whole Tree Economic Model (WTEM) was used to convert coffee leaves and cascara into market- approved functional ingredients, creating endogenous revenue streams that complement green bean sales while using existing cooperative infrastructure. Primary data sources included farm-level cost and production records, market prices for coffee beans, coffee leaf tea, and cascara, labor costs, and cooperative processing cost structures. Key variables modeled across scenarios included annual net present value, transition-period income adequacy, biomass harvest frequency (1-4 annual flushes for leaves), yield dynamics under regenerative transition, and processing efficiency gains through cooperative infrastructure. Scenarios tested conventional monoculture (S₁), regenerative baseline without biomass monetization (S₂), cascara-only monetization (S₃), leaf-only monetization (S₄), market stress conditions (S₅), and full WTEM with leaves and cascara (S₆). Results demonstrated WTEM's economic impact across 1,000 Monte Carlo iterations. Conventional monoculture (S₁) exhibited universal failure with mean NPV of -$119,128/ha, reflecting Puerto Rico's high labor costs and input premiums. Regenerative baseline (S₂) achieved positive viability in 100% of iterations with mean NPV of $52,353/ha, demonstrating that regenerative practices provide advantages via cost savings. Full WTEM (S₆) generated mean NPV of$141,944/ha with 100% positive outcomes, representing 171% improvement over regenerative baseline and transforming negative conventional systems into highly profitable operations. Counterintuitively, leaf- only systems (S₄) achieved the highest performance at $195,307/ha mean NPV, exceeding even full WTEM by$53,363/ha due to superior per unit values and temporal complementarity advantages. The cascara-only scenarios (S₃) remained negative at a mean value of -$32,644/ha, confirming insufficient standalone viability. The study contributes three advances: (1) a dual-metric viability framework distinguishing economic versus financial barriers; (2) the theory of temporal complementarity, explaining how off-season leaf processing converts coordination problems into capacity-optimization opportunities; and (3) evidence that existing cooperative infrastructure can transform biomass waste into regenerative finance.Extension Studie