Western Grocer Serving the industry since 1916
In tough economic times, it’s tempting for sustainability goals to take a back seat to cost savings. Coffee farmers don’t have that luxury as they face the effects of climate change while living on unsustainably low incomes.
Coffee farmers are key players in creating a sustainable future for coffee – from adapting to climate change and protecting forests, to adjusting practices in conjunction with businesses to comply with increased regulation on human rights. These efforts are essential, but also come at a high cost that the industry as a whole should be financing if we are to secure quality and sustainable coffee in the future. Businesses have the potential – and responsibility – to be part of this as well.
Pricing as usual no longer cuts it. That is why we recently announced Fairtrade will raise our Minimum Price for coffee, which will come into effect on August 1, 2023. This change provides a critical buffer against market fluctuations, tough economic and environmental times and rising costs for production.
In our consultations with farmers and businesses – one resounding message was clear: Coffee farmers need to be paid more, or they can’t continue to grow coffee.
According to available data, smallholder farmers grow 60 percent of the world’s coffee yet nearly half of those smallholder farmers are living in poverty; nearly a quarter of them live in extreme poverty. Studies, in fact, have shown that producers typically retain around 1 percent of the retail coffee price which, for a $4 USD cup of coffee, equals around $0.04 USD per cup.
This must change.
To set the new Minimum Price, Fairtrade completed an extensive cost of production study to assess the true cost of coffee production, and also conducted a robust and inclusive consultation spanning three months including outreach to over 600 producer organizations and 745 commercial partners. There were more than 540 respondents – 86% of whom were farmers – from 40 countries who provided critical inputs ultimately resulting in Fairtrade’s proposal to raise the Minimum Price.
“The Fairtrade Minimum Price is critical for coffee farmers as it cushions them from the unpredictable fluctuations they face on the coffee market. But the situation coffee farmers endure globally due to financial hardships and climate change remains unsustainable and, quite frankly, puts the entire future of coffee at risk,” warned Silvia Gonzalez, Manager at the Nicaraguan coffee producer UCA Miraflor and Board Member at Fairtrade regional producer network CLAC.
Farmers need pricing stability in order to continue producing high quality and sustainable coffee on which the industry – and all coffee lovers – depend. As an industry, we must come together to ensure that pricing meets the evolving needs of farming communities both now and for years to come. This starts with listening to farmers.
Fairtrade is hopeful about the future of the industry, particularly when farmers’ voices are at the center, and we are proud of the bold action we have taken to ensure a more sustainable future for coffee farmers around the world. We are encouraged by the innovation we see everyday with our producer and business partners alike, and are energized by the enthusiasm for a better cup of coffee for all.
