ICO & IDH team up on increasing incomes for smallholder coffee farmers
A new partnership between the International Coffee Organization (ICO) and IDH – the Sustainable Trade Initiative (IDH) has been formed to lay the groundwork for living and prosperous incomes for coffee farmers through the promotion of policy development, public and private sector dialogue, resource mobilisation, and pre-competitive work.
Although coffee benchmark prices on the global market have surpassed a 10-year high, most coffee farmers and their families continue to live well below recognised living income standards. For example, a 2019 report (PDF) found that 80% of Colombian farmers earn less than a living income, with 73% living below the poverty line despite well-organised support for the coffee sector by the Colombian government. If conditions are not optimised, even high prices can be insufficient for achieving a living or prosperous income. Achieving a living income hinges on market prices and specific conditions at the farm level, such as production costs, land size, and yield requirements.
“Steep rises in price are often an anomaly with farmers holding the bill afterward. When adjusted for inflation, the market price for green coffee has declined over the last twenty years even as costs of production continue to rise” said José Sette, ICO executive director. “This wide-ranging partnership will increase movement towards living incomes affording farmers decent livelihoods and the ability to deal with volatile markets.”
ICO and IDH say they are uniquely positioned to jointly address the challenge through their complementary capacities and experiences. Created in 1963, the ICO is an intergovernmental organisation, that brings together exporting and importing governments and implements the International Coffee Agreement (2007) with the objective of strengthening the global coffee sector and promoting its sustainable economic, social, and environmental development. IDH leverages public-private partnerships to drive systems change in global trade by innovating and investing in pre-competitive solutions with the private sector.
Together, ICO and IDH are uniting forces, expertise, and networks to work towards a prosperous coffee sector for coffee farmers. This partnership builds on commitments from ICO’s Coffee Public Private Task Force (CPPTF), which was created in 2018 to establish a dialogue on coffee price levels among key public and private stakeholders in the coffee sector. IDH will team up with the Task Force and its companies, governments, and international supporting organisations, and draw on its active community of stakeholders working to close living income gaps across a variety of commodity sectors, such as coffee and cocoa.
IDH’s Living Income Roadmap provides companies with five steps to help them take ambitious actions to close living income gaps. The organisation is currently designing a multistakeholder framework that goes beyond private sector actions to create clarity on the roles of governments, investors, farmers, and other stakeholders.
“Public-private collaborations, like this partnership, are the key to distributing value more equitably in an inequitable value chain. Companies need to step up and challenge their assumed roles, and governments must act as critical enablers of rural development,” said Jordy van Honk, global director of Agricultural Commodities at IDH.
The partnership will focus on four concrete areas of collaboration:
(a) Support the ongoing work of the ICO’s CPPTF with both financial and human resources, and leverage work that IDH is doing in the field.
(b) Co-facilitate and plan the 4th CEO and Global Coffee Leaders Forum (using living and prosperous income and value distribution as a framework).
(c) Start defining prosperous income as part of the work under ICO’s CPPTF and build on IDH and the Colombian Coffee Growers Federation’s (FNC) work on Living Income and Prosperity and the Sustainable Development Goals (SDGs).
(d) Work closely with ICO representatives to normalise key concepts around living income, value distribution, risk distribution, and policy alignment.