Rainforest Alliance Urges the Coffee Industry to Support Producers
International coffee prices have recently hit their lowest levels for 12 years, and for many farmers the levels mean they cannot cover their production costs. These declining prices are having a devastating impact on millions of coffee families worldwide, and on the landscapes, they help to manage and depend on. To this end, the Rainforest Alliance is appealing to traders, roasters and retailers in the global coffee industry to change the way they do business.
As prices decline, the Rainforest Alliance warns that it is essential to ensure that farmers – large or small – are economically viable businesses. For smallholders, this can be the difference between being able to earn a decent living or being stuck in a cycle of poverty. For larger farms, it can be the difference between paying workers a living wage or not. For all farmers lack of economic viability means they will not be able to invest in sustainable practices, adapt to climatic changes or take steps to respect child and worker rights.
The causes of the current price drop are complex and include issues such as how supply is managed, poorly designed agricultural policies, and insufficient support for farmers and farm management. Speculation in the coffee futures market is also a factor, exacerbating price swings. Yet whilst the current pricing crisis is particularly dire, fluctuating prices are a trait of any commodity and the long-term sustainability of producers will only be possible if it can be achieved within the current market system they rely on.
However, as the recent dramatic price falls have demonstrated, the market is not an equal playing field. Producers carry a disproportionate amount of risk, and often lack the knowledge and access to tools that are designed to deal with these risks. This is compounded by being impacted more quickly and more dramatically when the market price drops. Price volatility, especially low prices, often means producers are unable to commit long-term investments needed to implement sustainable agricultural practices. At the same time, they cannot easily exit the coffee market and move into other forms of income generation.
“It is vital that all actors in the supply chain commit to a long-term and systemic response in order not only to improve prices but also to allow producers to build their resilience to fluctuating markets and increase their profitability,” says Emma Harbour, head of global advocacy at the Rainforest Alliance.
The Rainforest Alliance urges the coffee sector to start acting today to ensure that the coffee we all enjoy is not being produced at the detriment of producer’s livelihoods. The Rainforest Alliance calls to attention the following key groups and required actions:
• Roasters and buyers must change their procurement practices to ensure that producers receive decent payment for their crop within a timely manner: Payment terms that can be as long as 300 days mean producers are unable to plan ahead, invest sustainably or save for when prices drop. This is exploitative, outdated and unfair and should stop. Also, committing to long-term relationships with producers would help producers to plan ahead and create a more balanced relationship between supply chain actors as trust and knowledge is built. A long-term purchasing contract would also allow for a clause referring to a minimum price connected to the production cost for the specific situation of the producers.
• Governments and companies should increase their investments in the sustainability of the producers: Producers need more support from their governments to become sustainable, for example through better implementation of good agricultural practices, access to inputs and finance, increasing their resilience through diversifying their income sources.
In its statement, the Rainforest Alliance reinforces its commitment to continue to work with producers and the entire supply chain towards a more sustainable coffee sector. The statement targets industry influencers to shape the agenda by encouraging increased stakeholder dialogue and supporting producers to ultimately allowing them to become more sustainable and viable in the long-term.
For more information, visit: https://www.rainforest-alliance.org.