Sustainability in coffee is a PR show – unless you talk about price


by Julie Francoeur

So many people care about coffee and pour their passion into it. So many good intentions.

Baristas, roasters, Q graders and coffee connoisseurs invest time and resources in improving the quality of a cup of coffee. Think tanks, NGOs and agribusiness hubs are striving to improve productivity of coffee farmers by breeding the best new arabica varieties and funding advanced research. Governments like the EU or Canada pass legislation to tackle deforestation and human rights violations in the coffee supply chain.

Yet every time I read another sustainability plan by a coffee company I hold my breath. Will they again talk about their environmental and climate resiliency goals, their recyclability dreams and ‘thriving social communities’ aspirations … all without ever mentioning farmers’ livelihoods?

Small-holder farmers get ripped off everywhere. I grew up seeing this first-hand. I saw it when my mother’s family farm had to be sold off in the mid 90’s to a land developer because they could no longer earn enough to meet their rising costs of production.  I saw it while working with sugarcane farmers in Jamaica and Guyana, with winegrape farmers in Argentina, and mango growers in Burkina Faso. Small-holder farmers everywhere struggle to have the trade bargaining power necessary to feed themselves while feeding us.

It’ll be different in coffee, I thought. After all, isn’t this the industry that declared it would be the world’s first sustainable agricultural commodity back in 2015?  The first commitment behind that Sustainable Coffee Challenge pledge was for the 25 million small-holder coffee farmers to have an “improved income” and “improved profitability.” But after years working to represent small-holder coffee farming communities, I’ve learned that it’s the same old story. Paying farmers fairly should be everywhere in coffee company commitments – yet those words are still only found in a handful of company statements and sustainability roadmaps.

And yet, we continue to layer expectations and requirements on coffee farmers. We want them to increase quality, increase productivity, decrease their carbon footprint, transition to regenerative production techniques, have satellite imagery of all farms so they can prove compliance to deforestation laws, implement internal control systems to monitor and remediate human rights and environmental violations, get a 3rd organic certificate because countries don’t recognize the same one, and on, and on.  What is too often forgotten is that these things lead to more costs to farmers.

Add to those market expectations the fact that farmers are at the forefront of climate change, which acts as a threat multiplier. Issues that coffee farmers are already faced with – such as low crop yields, food insecurity, water scarcity, extreme weather conditions such as drought and floods – are exacerbated due to climate change. Climate change is not only drastically impacting coffee regions, it is putting the very future of coffee communities at risk.

And again, this makes coffee production more expensive for farmers. I have met many coffee professionals who honestly believe farmers just need to produce more coffee at better quality in order to be richer. No need to talk about price. Farmers have seen productivity and quality improvement programs emerge left, right and center. While those are welcome and needed, we know they are not successful if farmers aren’t paid fairly for their coffee. We have seen coffee cooperatives be more productive and produce better quality coffee all while seeing lower profits as the costs of those improvements far outweighed the benefits. When farmers INVEST in productivity, INVEST in quality, INVEST in organic regenerative transition, they are out of pocket by a lot. And the C price cheats them, constantly.

Norvey Vaquiro with his three children and wife, from ASOBRIS cooperative, Colombia
Norvey Vaquiro with his three children and wife, from ASOBRIS cooperative, Colombia

And while specialty roasters sometimes pride themselves of the high prices they’ve paid for award winning micro-lots, we know farmers need those high prices to subsidize the rest of their crop they had to sell at the C price.

The industry cannot keep underpaying farmers, while expecting them to jump through ever more hoops in the name of “sustainability.” Sustaining who? Sustaining what? The current livelihoods of farmers should not be “sustained”, it needs radical improvement.

What happens when farmers don’t make enough from coffee? For starters, the next generation isn’t interested in taking over the family farm or being involved in coffee; they don’t see a future in it. Even current coffee farmers are deciding to abandon the crop. A study looking at migration patterns and coffee communities in Honduras found direct linkages between coffee price drops and migration spikes to the United States.  A drop in the coffee price from 1.60 USD to 1.40 USD predicted a staggering 120% increase in migration in a coffee producing municipality. Even a small 5 cent decrease in the coffee price predicts an additional 14,400 more migrants from Honduras. Coffee revenue is social cohesion for so many rural communities.

Ultimately, we need to seriously question the prices we pay for coffee. And to do that, we need to start by asking the right questions.

At Fairtrade, we have pivoted from just asking “how do we meet the cost of sustainable production?” to asking harder questions like “how much does a farmer family need to earn to have a decent life?” And we ask very context specific questions like “what level of productivity is really achievable by an average small farmer in the mountains of Colombia?” and “What’s a viable land size in Ethiopia?” and “At what point is quality enough and are all quality investments worthwhile?” While the answers are not always easy and straightforward, they are critical if we want to get this right.

To try and answer these questions, Fairtrade has done the hard work from the ground up. We work with coffee cooperatives to track over time their real costs of production vs household income. We partner with others and organize country level roundtables with all stakeholders. These roundtables, importantly, have coffee cooperatives in the lead. Jointly, we define important common indicators such as realistic productivity objectives and the viable land size for a family to be able to make a living from their farm. These roundtables allow us to come to a joint agreement on what prices per pound of green coffee sold are needed for farmers to reach a living income. We call these Living Income Reference Prices and we have set them for multiple origins already.

And we need to be ready to act once we get the answers we need. That is why, after robust cost of production studies in 2022 and wide public consultations, we took the bold move to increase our most famous protection tool: the Fairtrade Minimum Price. Just last month, Fairtrade announced a 30% increased to the floor price, which provides coffee farmers with stronger protection against the dips of the C market price. We also increased the differential that organic certified Fairtrade farmers receive, as the costs of organic production have increased rapidly.

If the prices paid aren’t fair to farmers, it shouldn’t be called a fair trade, and it definitely isn’t sustainable.

It’s time the industry took a real look at itself and started asking the hard questions. We know the industry cares. We know consumers care. Let’s prove to farmers that sustainability can be more than a PR campaign.   

Coffee Living Income