Why should U.S. consumers support coffee growing countries with the front pages of the major newspapers reporting about their farmers going broke? Several considerations come to mind. Coffee farms contribute greatly to global weather constituency, the massive contributions to transform dioxide into oxygen. The U.S. is considered, among others, as a great polluter. Lets remember the last position assumed at Johannesburg where the U.S. did not want to comply with a lesser use of energies based on oil. On the topic of apple farming and the new competition from China, lets go back to the 1990’s. The Mexican state of Chihuahua is a very competitive grower and in 1990, they had an extraordinary apple crop. What happened then? The U.S. literally flooded the Mexican apple market not only dropping domestic prices but can you guess what happened to the Mexican apple farmers with their product? They were left without a market and practically all growers went bankrupt because of unpaid credits to banks.
“World coffee prices are at historic lows, not only regarding price but in duration”, said Garcia-Palacios. He continued, “Why? Because two countries - Brazil and Vietnam - started to excel in coffee production when demand was dropping. Brazil has been a leading coffee grower for over 50 years. Vietnam is a new addition to this scenario. The U.S. through the World Bank and International Monetary Fund has financed the Vietnamese coffee market. Furthermore, what the U.S. seems not to know is that by dropping international commodities, not only do people suffer, migratory effects reshape the world demography, but at the end, the one who ends up paying all the bills is the U.S. And what about the health of our planet? Does the US really commit to environmental issues? If so, why even consider fighting Iraq? Does the U.S. really commit to human rights? If so, why plummet prices of agricultural products grown mainly in third world countries? And what about cases such as Enron, Tyco and Worldcom…should we again address this partnership program?“
LaRue’s views and comments are based on a global economic perspective “It’s a balance between long term supply and loyal demand within a global market economy. He doesn’t believe the U.S. should subsidize farming or any other product. “Coffee is no exception unless the consumer sees value in using coffee as a vehicle to create a particular community and direct it towards diversifying farming, such as coffee plus other farmed origin products like dried fruits, etc” he said. “The issue is not only about price, but the ability to include diversification and long-term demand for coffee products in the market place that allow environmental issues to be resolved and social profits to be maintained between the consumer and producing society. Artificially set prices for coffee are inconsistent with the sustainable ideas for market driven economics. Therefore, the value to the coffee consumer is not in paying more, but rather what makes the consumer feel good about what he or she purchased. There is no limit to what consumers will pay, if it makes them feel good. Look at the pet rock,” he said. LaRue’s assumption of sustainable coffee is that by its definition should be organic. “Organic means that the farmer should respect general processing practices that are respectful of the environment and social issues. This means for example that he pay female workers the same as men for the same amount of work. Many more ideas can be derived from this model. How does a farmer certify this? It’s very difficult, but can do if we understand the benefit as consumers. The price of certification needs to reflect the needs of consumers’ needs for this added social/environmental value. The social profits of sustainability cannot be measured in dollars and cents, but in consumer perception dollars. I do not believe there is such a currency, however, the market indicates a growing trend toward some for fair trade whatever that means”, he continued.”
Coffee farmer, Fraser Pirie, owner of Agua Caliente in Costa Rica says pineapples, avocados and other fruits are produced in many countries and the U.S. should protect its own product. The only coffee produced in the U.S. is in Hawaii, where it is grown literally on the beach in some instances, so it is not high-mountain grown. Hawaii coffee is usually sold for $26.00 pound. Buyers agree to pay $26.00 a pound, mainly because it is produced on U.S. soil. So this product you can say is protected and upheld by the consumer. Issuing an angry statement, Pirie said, “The big four (Kraft, Nestle, P&G and Sara Lee) are making hundreds of millions of dollars injecting dirt cheap robustas from Vietnam where it is worth $15.00 per sack with freight included to Hamburg. Last year, Europe bought 1 million sacks less from Central America than the previous year. Those million bags were exchanged for poor robustas from Brazil and Vietnam at ridiculous prices. Central America sells mainly bananas, sugar, and coffee. Now flowers, ferns, and other plant products are new exports to the U.S. But they are mainly products that the US can’t produce themselves. So there is no competition. What I can produce does not affect the U.S. farmer, But Costa Rica buys wheat products, corn, beans, peanuts and many other farm products from the U.S. Central America is a client of the U.S. Our product (from the Agua Caliente farm) is sold at $1.30 per pound, and is fairly traded. It is resold at $6.50-$12.00 per pound. Starbucks says that the cost of green coffee is only one of their costs. Consumers want quality, and great tasting coffee. They must protect their sources for that great cup of coffee. If the sources dry up that is the end of the industry. When production is super controlled like Jamaica Blue Mountain, and carefully doled out to consumers, then prices jump to $40.00 per pound, which they gladly pay. Best to pay just a little bit more, up to $1.00-$1.50 per pound, now, as it still is really inexpensive and have a steady supply, than to make socially irresponsible robusta-habits. The Costa Rica newspapers published reports of starving people in the coffee regions of Matagalpa Nicaragua. They had been driven off the coffee fincas because the owners were broke from the terrible prices,” he said.
From the Smithsonian bird project, Robert Rice views the situation as not an “either/or situation” in terms of whom we need to support. People concerned with the stewardship of the earth or the social relations/conditions of production should be willing to support good, verifiable efforts wherever they occur. For the U.S., there actually is a movement that supports good land stewardship, called the Community Supported Agriculture system. “Sometimes it’s called subscription agriculture,” said Rick. Other examples can be found by doing research on “Community Supported Agriculture” (http://www.nal.usda.gov/afsic/csa/).
According to Rice, final analysis might be, “Why don’t more people support sustainable agriculture wherever it exists? There is a certain cache involved in supporting exotic initiatives in other countries, but supporting any viable effort at sustainable production is noteworthy.”
Mara Neville, PR director, TechnoServe also responds to my questions on the definition of sustainable coffee. “How are you defining sustainable?” she asks. “Which segments of the U.S. coffee consuming market are you asking to pay more, and for which coffee? Seems to me that specialty coffee drinkers are already paying top dollar. For commodity-quality coffee, yearly production oversupply and no spike in demand is going to keep prices low and drive down quality for the foreseeable future. I’m not sure what consumers can do. No question that U.S. farmers in non-subsidized sectors must compete and are sometimes at a competitive disadvantage. Yet, there are social and economic safety nets in the U.S. that don’t exist in Tanzania and Nicaragua, for example. And some would argue that the U.S. and European countries’ subsidies paid to their own farmers for a variety of other crops are part of the reason why developing countries are so overly reliant on commodities like coffee, which are not grown by and therefore no threat to the U.S. and European farmers. Current coffee crisis is adversely affecting the entire developing countries economies. Thank goodness, the U.S. economy is very diversified; further weakening destabilizing existing fragile economies is a good reason for the U.S. to be concerned,” she said.
Toward Global Solutions
Rick Peyser, SCAA Board member and Chair, SCAA Sustainable Committee, has been working with his company, Green Mountain Roasters on several relationship projects. Stewardship coffees, Coffee Kids (he is currently the president), and Oxfam to name a few, are commitments that express Green Mountain’s commitment to educating the industry and consumers while searching for sustainable solutions. Peyser concurred that everyone in the industry agrees that the current crisis demands a broad-based solution. “Fair Trade, by itself, isn’t enough; improving quality, by itself, isn’t enough; eliminating trade barriers, by itself, isn’t enough,” he said. Peyser believes that a holistic approach to the crisis is needed. “A concerted effort, with all parties designing and implementing solutions together, is certainly preferable to today’s environment where everyone is (or isn’t) making efforts of their own,” said Peyser.
Last February, a group of global industry leaders from producing countries, consuming countries, the NCA and SCAA, met for a Coffee Summit. Out of that meeting, came the start of a long-range plan that involves a process and opportunity to work together as a united coffee industry. A press release was issued along with announcements of the plan presented during the NCA and SCAA conventions were given with optimistic enthusiasm and a mutually agreed upon direction to deal with these global issues. Why can’t the Coffee Summit represent the core from which all programming can be executed? Have the initial plans of the Coffee Summit already been deluded? And what about the U.S. membership in the ICO? What are the reasons for NOT being a member? Leaders from the U.S. coffee industry have been attending ICO conferences, listening and participating in programming.
Both the NCA and SCAA have established criteria for achieving long-term solutions. During the recent SCAA Board meeting held in Boston, the Sustainability Committee, working from published documents from all pertinent government and non-government organizations, technology, legislation, and other global reports, achieved a step-by-step plan for goals and objectives through 2004. The continued action and evolvement of this Committee will be posted in a specific area of the SCAA web site, both in Spanish and English in an effort to provide everyone, from producers to consumers information to deal with the current crisis. Next spring, during the SCAA conference in Boston, there will be several workshops and panel discussions on sustainable coffee, from triage to establishing best practices for the industry.
As I finished this article, I felt like I was peeling my own onion. As the layers were exposed, I didn’t want to glue them back, but continue seeking its core. As I look at the onion, the layers that have been peeled are turned back, but are dried out from lack of nourishment, yet still hanging on. I think at some stage, those old layers will slough off, especially as we see its core.
As a result of so many programs underway, we have decided to write a bi-monthly Feature on the variety of programs solutions currently underway or planned as solutions to sustainability. We invite comments from all countries and niches of the coffee industry, from producers to retailers to present their comments. Write to Suzanne Brown; email@example.com The first feature will appear in February 2003.