Fairtrade increases coffee minimum price to support farmers

'Coffee farmers are struggling with inflation, skyrocketing production costs, and crop loss due to the effects of climate change'

Fairtrade International has announced in increase of its minimum price for coffee to help farmers with the impacts of growing economic volatility and climate change.

The new prices, which will come into effect on 1 August, will give farmers an increase of 19% and 29% for Fairtrade-certified Robusta and Arabica coffee, respectively.

The new Fairtrade Minimum Price for washed Arabica beans, which represent more than 80% of all Fairtrade coffee sold, will be US$1.80 per pound, up 40 cents on the previous price of $1.40.

For natural Robusta, the price rises 19 cents to $1.20 per pound. The additional value for organic Fairtrade coffee has been increased by a third, from 30 cents to 40 cents per pound.

More than half of Fairtrade coffee beans sold in 2021 were also organic certified.

“Despite the recent spikes in global coffee prices, coffee farmers are struggling with inflation, skyrocketing production costs, and crop loss due to the effects of climate change,” said Monika Firl, senior manager for coffee at Fairtrade International.

“Many coffee farmers are abandoning their farms in search of opportunities elsewhere and young people today in coffee-growing communities struggle to see a future in coffee. The fact that farmers cannot make a living in coffee is a tragic commentary for the industry and a huge risk for the future of the global coffee sector as a whole.

“With the new Fairtrade Minimum Price, Fairtrade is offering coffee farmers and their cooperatives a pricing safety net, better adapted to the uncertain times we are living in, while leaving the door open for them to earn more when market prices are above the Fairtrade Minimum Price. This is an essential tool that coffee farmers must be allowed to leverage in order to find renewed stability in their profession.”

The Fairtrade network includes 900,000 certified coffee farmers in over 650 producer organisations across 31 countries. In addition to the Fairtrade Minimum Price, these farmers also receive the Fairtrade Premium, an amount they can choose to collectively invest in projects to improve productivity, climate adaptation, quality, infrastructure, and basic community services.

“The Fairtrade Minimum Price is critical for coffee farmers as it cushions them from the unpredictable fluctuations they face on the coffee market,” said Silvia Gonzalez, manager at the Nicaraguan coffee producer UCA Miraflor and Board Member at Fairtrade regional producer network CLAC. “But the situation coffee farmers endure globally due to financial hardships and climate change remains unsustainable and, quite frankly, puts the entire future of coffee at risk.

“If we’re going to be serious about tackling poverty in the global supply chain, then everyone in the supply chain – from consumers to retailers to traders – must do their part and pay farmers their fair share.”

The new minimum price was determined after a cost of production analysis and three-month consultation with key stakeholders. More than 540 participants – 86% of whom were farmers from 40 countries – took part in the consultation. Before being implemented minimum price revisions are evaluated and approved by the Fairtrade Standards Committee, which comprises three producer representatives, one trade union (worker) representative, three national Fairtrade organisation representatives, and one trader representative. 

“The future of coffee is one where fair pricing is the norm. It is not acceptable for coffee farmers to continue to subsidize the multi-billion dollar coffee industry, while also taking on the hard work of sustainable transition,” said Firl.

“Fairtrade coffee farmers are doing their part, and the new Fairtrade Minimum Price is an important step forward. But we know that farmers will continue to face increasing costs to comply with requirements related to deforestation and other priorities of governments, brands, and conscious coffee drinkers.

“In addition, reaching a living income for farmers will require collective action across the industry, and is not something that Fairtrade alone can achieve. It is time for the global coffee industry to step up and walk the talk.”

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