Coffee - The Human Crisis - Report Launch

The human consequences of the collapse in world market coffee prices - which reached 30 year lows during this year's coffee harvest - are now visible with many small coffee farmers and coffee workers in major coffee producing countries facing financial ruin. A revised edition of the Fairtrade Foundation's report Spilling the Beans on the Coffee Trade shows coffee growers now unable to afford the basics of adequate food, healthcare and education for their families as a direct result of the fallen coffee prices. Fear and uncertainty about the future are compounding the growers' difficulties.

Spilling the Beans is being launched to coincide with the first ever World Fair Trade Day, organised by IFAT (International Federation for Alternative Trade). The day is being held to celebrate fair trade with events being organised from Canada to Bangladesh (see notes to editor).

"Many families who make their living from coffee are impoverished and desperate," says Harriet Lamb, Executive Director of the Fairtrade Foundation which awards the Fairtrade Mark to coffees where the retailer has paid the Fairtrade price. "Evidence of low and declining living standards is clear. Many farmers have been struggling for years as they have failed to recover their production costs for several harvests running. The collapse in this year’s coffee prices has had a devastating impact on their already precarious existence. Some have abandoned their land and gone in search of work in cities. Others have neglected or uprooted their coffee bushes."

In 2001, prices of coffee on the international markets collapsed to record-breaking lows, slashing the farmers’ and national country incomes. Between 1994 and the end of 2001 the price of robusta beans (used chiefly in instant coffee) plummeted from around 180 cents per lb to just 17 cents, a 30 year low. The value of the other coffee bean, the high quality arabica, suffered similarly.

Spilling the Beans shows that little of the ‘benefits’ from coffee production actually go to coffee producers, with most of the profit going to the traders in the North, while the costs fall in the main on the producers. The journey from farm to supermarket shelves is long and tortuous, with a succession of people along the way taking their cut – paper transactions on international commodities markets account for much of this. While it is estimated that the world coffee trade generates $60 bn in revenues, double the amount in the 1980s, producing countries retain just over 10 per cent of this, compared with 30 per cent in the 1980s.

Coffee, the second most valuable commodity after oil, is grown in more than 50 countries in a band around the equator and provides a living for more than 20 million farmers. Altogether, up to 100 million people worldwide are involved in the growing, processing, trading and retailing of the product. Two thirds of the farmers working on this very labour intensive crop cultivate plots of less than five hectares.

Spilling the Beans tells the stories of some of these smallholders, left exposed to the vagaries of the international market and its dramatic price fluctuations. Vitelio Menza with his wife and four children have been dependent on the coffee Vitelio grows in Colombia all their lives. But things have become increasingly difficult in recent years - despite ill health in the family due to malnutition, Vitelio continues to cultivate coffee. Meanwhile many of his neighbours are planting coca leaf (the raw material for cocaine) because of the higher returns.

"The coffee grower does not want to get into illegal business, with a lot of risk," says Vitelio. "But he accepts that risk because there is nothing else to do." Hard numbers are impossible to come by, but informed estimates suggest that by the end of 2001, some 1,000 of the country’s 560,000 coffee farms had turned to coca or opium poppies.

Spilling the Beans also interviews small farmers supplying the international Fairtrade market. By contrast with the fluctuations of the world coffee market, Fairtrade terms of trade mean that coffee is bought directly from small-scale farmers’ organisations at a guaranteed price. Farmers also receive a social premium that they can use to upgrade their farming infrastructure or put towards healthcare and education projects in their community.

Guillermo Vargas Leiton of Coocafe cooperative in Costa Rica which supplies the UK Fairtrade market says: "When you buy our coffee you are not just buying our coffee you are supporting our democracy." Farmers’ organisations such as Coocafe that sell all or part of their members’ crops to the Fairtrade market receive a minimum of 106 cents per lb and 126 cents per lb, for robusta and arabica beans respectively. This includes a five cents per pound fixed premium. This compares to the current world market price of 24 cent per lb and 52 cents per lb for Robusta and Arabica beans respectively.

Spilling the Beans recommends better support for Fairtrade in the UK by government, retailers, manufacturers and consumers. Resonating with the theme of World Fair Trade Day for UK consumers, the report concludes: "Buying Fairtrade coffees is one of the ways in which consumers can take responsibility for their role in trade, and contribute to the economic sustainability of at least some of the millions of small coffee farmers and their families."

• To mark World Fair Trade Day in Finland, fair trade sailing ship ‘the Estelle’ will set sail with a special cargo of gifts for war torn communities in Angola. Ghana will celebrate with a fair trade breakfast bringing together a cross-section of organisations involved in fair trade. For more information on World Fair Trade Day, organised by IFAT, contact Carol Wills cwills@ifat.org.uk or visit http://www.wftday.org
• In real terms, world coffee prices are now less than a quarter of 1970 levels and, with the possible exception of growers of the highest quality beans, coffee producers are selling their coffee crops at below cost.
• The Fairtrade Mark is the UK’s only independent consumer label that guarantees a better deal for third world producers. The Fairtrade Mark is awarded by the Fairtrade Foundation which is one of 17 national Faritrade initiatives around the world, coordinated by the Fairtrade Labelling Organisations International office in Bonn, Germany.
• The value of UK Fairtrade coffee sales reached £18.5m in 2001, taking a 3 per cent share of the total coffee market by volume and 10.5 per cent of the ground coffee market. In 2001, UK sales of Fairtrade Marked products topped £44m with coffee sales accounting for £18.5m or 42 per cent of the total. Worldwide sales of Fairtrade coffee in 2001 amounted to 14,400 metric tons.

For more information or to arrange an interview on ‘Spilling the Beans on the Coffee Trade’, please contact Eileen Maybin or Abi Murray on 020 7404 9303.