Thanks to constant innovation -like coffee pods and capsules- the world coffee market has grown to be worth around 200 billion dollars per year for 9 million tonnes traded. In the case of bananas, with nearly 20 million tonnes traded, consumer value struggles to rise much above 25 billion dollars.
A ground-breaking study by the Paris-based Bureau for Societal Analysis for Citizen Information (BASIC) -funded by the French fair trade platform, Fairtrade labeller Max Havelaar France and the Rethinking Value Chains network- has revealed the truth behind this apparent explosion in the value of coffee.
Over the last 20 years, roasters and retailers have reaped an additional 1.2 billion euros from annual coffee sales, while farmers and traders have earned just 64 million euros more. Over this period the revenue gained by the producing countries has gone down from 24% of the value in the mid-90s to 16% in 2017.
The majority of coffee farmers today are suffering a decline in their standard of living and in their working conditions. Faced with regularly falling worldwide coffee prices and increasing production costs, and dependent on their buyers, growers are also suffering from a critical lack of working capital.
Bananalink.org.uk gives as an example how in 2017 Peruvian and Ethiopian coffee farmers had an average income that was 20% less than that of the previous 12 years, keeping them below the poverty line.
Aside from the highly unfair distribution of value in the market, the BASIC study also alerts us to the impact of climatic deregulation. The changes currently underway could lead to a 20% drop in yields by 2050.
Small farmers are already the first victims, especially where they have been encouraged by coffee companies, certifiers or government policies to plant just coffee in a monoculture system. Traditional agroforestry systems in the world’s centre of coffee diversity –Ethiopia– are under threat from the push to greater short-term productivity.
But small farmers in East Africa and elsewhere have known for centuries that inter-cropping and agroforestry systems reduce their economic vulnerability. Their contribution to climate resilience now needs to be recognised and pushed by organisations that have until now believed in intensive monoculture.
As with bananas, the future does not lie with more and more intensive monoculture with the loss of disease resilience and all the ecological and social costs associated with such systems. The study is a wake-up call to all, be they economically dependent on coffee or just consumers.
