Starbucks to promote 'Fair Trade' coffee

Posted: 19 September 2002

Starbucks Coffee Company has agreed to collaborate in a unique pilot project to help small-scale Mexican coffee producers expand their access to the global marketplace and increase the availability of high quality Fair Trade certified coffee.

coffee plantCoffee plantThis collaboration with the Ford Foundation, Oxfam America and the Oaxacan State Coffee Producers Network (CEPCO) aims to enhance the livelihood and capabilities of small-scale coffee farmers who have seen their earnings fall to desperately low levels in recent years (see below). "Producing high quality coffee, consistently and in sufficient quantity to meet the requirements of the specialty coffee industry is key to the survival of small farmer organizations in Central America and Mexico," said Orin Smith, president and CEO of Starbucks.

"The Ford Foundation, Oxfam America and Starbucks share a common interest in working with farmers to ensure their future in their businesses and the sustainability of the industry." Pilot project

Oxfam America and CEPCO, Mexico's largest co-operative of small-scale coffee producers, will manage the project in the state of Oaxaca. Starbucks and the Ford Foundation have committed a total of $250,000 to the pilot for its first year.

The programme will provide farmers with technical assistance, market information and product quality feedback. Ultimately, the project seeks to strengthen trading relationships between small-farmer fair trade cooperatives and coffee roasters in the US specialty coffee industry.

With coffee prices at historic lows, farmers who produce high-quality coffee are better positioned to earn higher prices and generate greater income for their families. picking coffee beansA boy picks coffee beans at a plantation in Central AmericaOxfam America has worked with small-farmer coffee cooperatives for more than 30 years, and believes that quality - the cup quality, the rewards in pricing for quality, and the perception of quality - is one of the major challenges to increasing the amount of coffee sold at fair trade prices.

This partnership will support small-scale farmers' efforts to redefine 'quality coffee' to mean coffee that is environmentally, socially and economically beneficial, in addition to being high quality. Market share

"Oxfam America is committed to finding new and innovative ways to secure a greater market share for small-scale coffee farmers - CEPCO is incredibly well positioned to pioneer the implementation of this effort," said Raymond C. Offenheiser, president of Oxfam America.

"Certified Fair Trade coffee is a powerful mechanism for assuring that very small scale, often impoverished coffee producers receive the equivalent of 'living wage' prices for their coffee," according to Michael Conroy, Senior Program Officer at the Ford Foundation.

"It provides assurance to socially aware consumers that their coffee was produced and traded under the highest standards of social and environmental responsibility. And it gives coffee roasters and retailers a guarantee that the coffee has not been produced under conditions that exploit either the coffee farmers or the environment." Economic ruin

In a separate report, the British-based charity Oxfam says that 25 million coffee farmers in 45 countries face economic ruin, as world coffee prices hit a 30-year low. The charity is calling on governments and companies to destroy 300 million kilograms of surplus coffee stocks to bolster prices.

The report paints a gloomy picture of the world coffee market, where supply exceeds demand by 550 million kilograms annually, and growers lose money on every coffee bean they sell.

According to Oxfam, farmers now receive 58 cents (about 37p) for a kilogram of green coffee beans, while consumers pay $7.92 (about £5) for a kilogram of roasted coffee. The markup goes to the middlemen who purchase, transport, roast, and sell the coffee.

Oxfam says coffee revenues in Central America fell by 44 per cent between the years 2000 and 2001. During the same period, coffee earnings fell 42 per cent in Ethiopia, and 30 per cent in Uganda. drying coffee beansWorkers put coffee beans to dry in a Central American plantationCommenting on the effect of this on millions of coffee growers, Phil Bloomer of Oxfam International, said "We are seeing, throughout our programs now, hunger, families taking their children out of school, unable to buy the basic medicines they need to cure simple illnesses."

He said the world's four biggest coffee companies, Kraft, Nestle, Proctor and Gamble, and Sara Lee, are putting profits over people.

"They cannot preside over vast human misery at the bottom of their supply chain," Mr. Bloomer said. "They have to start acting, and acting now to make this market work for poor people as well as themselves."

The companies deny they are exploiting poor farmers, and spokesmen say they want to work with groups like Oxfam on solutions. Positive steps they agree upon would stimulate more demand to ease the oversupply of coffee and programmes to help coffee growers diversify into other crops.

Related links:

  • Poverty In Your Coffee Cup, the Oxfam report on the Coffee Trade.

  • ELDIS - Coffee Crisis Feature, ELDIS have produced a special feature to put the coffee crisis and Oxfam's recent coffee report in context. The feature includes an ELDIS interview with one of the big four coffee roasters, Proctor and Gamble, as well as links to relevant documents, organisations, news stories and other resources.
  • Spilling the beans on a brewing crisis, news report from The Guardian (May 31, 2001) on the coffee crisis.