Does price transparency pose a risk of price suppression for coffee farmers?

The global coffee industry has evolved over thousands of years and is now transitioning toward more positive and sustainable values. Particularly in the Specialty Coffee sector, there is increasing emphasis on fair trade standards, sustainable development, and transparency in product information. In this context, price transparency is one of the practical approaches adopted by coffee producers to help create a purpose-driven and equitable ecosystem for all parties across the supply chain.

Coffee price transparency can be understood as the clear and detailed disclosure of pricing at each stage of the supply chain. Some of the key figures that producers choose to make public include the farmgate price, the FOB (Free on Board) price, and local logistics costs. This transparency helps build trust and demonstrates a strong commitment to fairness and accountability toward all stakeholders in the supply chain.

Farmgate Price

The farmgate price refers to the amount of money that farmers actually receive at their farm, before the coffee goes through processing, transport, and export. However, this price is not always fixed or easy to determine, especially in supply chains with multiple intermediaries. Therefore, sourcing coffee directly from farms that have their own processing facilities makes it easier to define and verify the farmgate price.

Buying coffee directly from farms helps clarify the farmgate price and ensures better benefits for the growers.

FOB Price (Free on Board)

The FOB price, or delivery-at-port price, is the amount at which the coffee is transferred from the seller to the buyer at the export port. This price is often used to compare green coffee contracts in the global market, including Fairtrade-certified deals. The FOB price includes the cost of green coffee, processing, sorting, packaging, domestic transport, loading, warehousing, export fees, and profit. In essence, the FOB price equals the farmgate price plus export-related costs and applicable taxes and fees.

Some have raised concerns that if businesses publicly disclose the prices they pay farmers and the prices at which they sell their products, competitors could take advantage of this information. They might lower their retail prices to attract more customers. To maintain profit margins at those lower prices, they may in turn pressure farmers to accept lower payments, leading to a situation where farmers are underpaid.

The complex reality context

The reality, however, is far more complex. The farmgate price is not a fixed figure that can be copied directly. Every supply chain has its own structure and associated costs. Moreover, the value of a coffee bean is influenced by constantly shifting factors—ranging from the specific quality of each lot, the overall yield of the season, and the exact timing of harvest, to currency exchange fluctuations and localized operational costs.

Competitors relying solely on published price data to “benchmark” or “replicate” pricing strategies are unlikely to gain any sustainable advantage.

The Risks of Suppressing Farmgate Prices

Undervaluing farmers comes with greater risks than rewards. When farmers are not paid fairly, they will naturally prioritize selling to buyers who offer prices that reflect the true value of their work. Furthermore, a lack of fairness and transparency in pricing weakens trust and long-term partnerships. This can lead to unstable supply and inconsistent quality—ultimately damaging a company’s reputation and market share.

In summary, while concerns about price transparency potentially leading to farmer exploitation are not unfounded in certain cases, a broader perspective shows that the long-term benefits of transparency far outweigh the risks.

Unlike conventional commercial coffee, Specialty Coffee does not compete on low prices. Instead, its appeal lies in the exceptional quality of each bean—expressed through rich, distinctive flavors—as well as in inspiring brand stories, clearly traceable origins, and strong ethical and sustainability commitments across the entire supply chain.

In addition, conscious and responsible consumption is on the rise, especially in developed markets such as Western countries. In these regions, Consumers increasingly seek products that are sustainable, certified (e.g. Fairtrade), and that come from transparent, traceable origin. If a business is found to be underpaying farmers, it risks facing backlash from both the farming community and a broader consumer base—including potential boycotts.

Fairtrade-certified coffees are becoming increasingly popular among consumers.

Price transparency can therefore encourage competitors to follow suit by fairly compensating farmers and being open about their pricing structures. This fosters trust, builds brand reputation, and appeals to customers who prioritize ethical values. In doing so, it also contributes to a healthier, more equitable competitive environment—ultimately helping raise the overall value of the Specialty Coffee sector.

At XLIII Coffee, transparency is a core value. The brand publicly shares detailed pricing data, from sourcing coffee at the farm to serving it in-store. Every stage of the value chain is disclosed—including what the company pays producers and the final retail price charged to consumers.

Moreover, XLIII Coffee is firmly committed to paying fair prices. This is reflected in its direct payments to farmers at a level that supports a sustainable supply chain—not only economically, but also socially, for the producers themselves. As the brand puts it: “A cup of coffee may seem simple, but it has traveled a long journey, full of hard work and risk.” XLIII Coffee acknowledges that effort with fairness and integrity.

XLIII Coffee’s product tags display both the farmgate price and the retail price, reflecting the brand’s commitment to price transparency.

Conclusion

Concerns about coffee price transparency leading to farmer exploitation are understandable, but in the context of Specialty Coffee, they are largely unfounded. With its emphasis on quality, ethical values, and long-term farmer relationships, the industry is not one where price suppression creates advantage—in fact, it often brings risk. Transparency, on the other hand, builds trust and drives sustainable growth for everyone involved in the Specialty Coffee ecosystem.

Images from XLIII Coffee and collected by XLIII Coffee

1. What does price transparency mean in the context of Specialty Coffee?

It refers to the clear and open disclosure of pricing across the supply chain, including the farmgate price (paid to farmers), the FOB (Free on Board) price, and the final retail price. The goal is to ensure fairness, traceability, and trust between producers and consumers.

2. Does publishing farmgate prices put farmers at risk of being underpaid?

Not necessarily. While there are concerns that competitors could use this information to push prices down, in reality, each supply chain has its own structure and cost base. Attempts to underpay farmers often carry the risk of losing high-quality supply and damaging a company’s reputation.

3. What advantages does coffee price transparency bring to businesses?

It helps build brand credibility, earns the trust of ethically minded consumers, and attracts long-term partnerships with producers. This is a major advantage in the Specialty Coffee sector, where customers increasingly care about sustainability and ethical values.

4. How does XLIII Coffee practice coffee price transparency?

XLIII Coffee clearly displays both the farmgate price and the retail price on each coffee tag. The brand is committed to fair compensation for farmers, aiming to secure their livelihoods and foster a sustainable, equitable supply chain.