How coffee farmers get a fairer price
One of the problems in the coffee industry today is the equitable allocation of the value of each cup of coffee to the participants in the supply chain. Especially coffee prices are increasing day by day, but coffee farmers do not seem to benefit from this. How to pay more fairly for coffee farmers? Let’s find out with XLIII Coffee!
Coffee farmers are suffering injustice in the supply chain
Coffee farmers (especially smallholders growing coffee on an area of less than 30 hectares) are the most economically disadvantaged group in the coffee supply chain. They hardly get their fair share of money nor do they have the right to decide the value of their products. This is largely due to a decades-old injustice that makes this an unwritten rule in the industry. Since coffee was widely produced, it has been dominated by European colonial countries that were able to control prices and make large profits from the sale of coffee. According to Chad Trewick, the founder of Reciprocafé, most of the coffee land in the 1700s and 1800s belonged not to farmers but to the landlord class. At this time, most coffee growers do not own land and are hired workers. They are exploited for labor, doing hard work to produce and harvest coffee but are not paid commensurately. Although the colonial era is over, its influence is still present in the coffee industry today.
In addition, when people are returned to land ownership, they face many difficulties. The land is divided too small to develop large-scale coffee production. Small resources, lack of capital, equipment and technical support to produce coffee as well as improve quality to compete with the market. Asymmetric information, and difficult access to technology and markets make farmers unable to compete with established estates or large private business owners. Therefore, many coffee farmers gradually have no choice but to sell their land to multinational corporations for a stable income.
Farmers' profits are not enough to maintain livelihoods
According to Peter Roberts - Specialty Coffee Trading Instructor (SCTG), only about 60% of the FOB price (export price) is paid to farmers. In addition, according to calculations by the International Trade Center, coffee producers account for only about 10% of the retail price of coffee. Typically, consumers at US specialty coffee shops can pay between US$4 and US$7 for a filter coffee, but farmers receive only a very small portion. Sometimes, farmers don't know how the quality of their coffee is judged and they are only paid a market price of C or less.
Meanwhile, farmers not only face fluctuations in the price of coffee in the world market, but also have to pay many other costs to maintain the operation of the farm. They need to pay wages for harvesting and processing workers, commission fees for traders, etc. Every season passes, the farm owner needs to spend a large sum of money on repairing and maintaining machinery and equipment. equipment, agricultural materials, seedlings. Therefore, the profit is too meager and almost not enough for them to pay for these expenses.
How to pay more fairly for coffee farmers?
Fair pricing for farmers is a key element in the supply chain that drives the development of a sustainable coffee industry. This means that the value that farmers receive must ensure that they can maintain their business, pay for life-related expenses such as living, healthcare, education, children and savings. for the future of family, community and society. However, in the SCTG research report, just under 5% of specialty coffees with scores between 80 and 83.9 in the 2018/19 and 2019/20 harvests in Colombia were sold for prices above the income threshold. enough to live. If farmers do not have enough income, it will be difficult for them to produce effective coffee batches and this will directly affect the future of the coffee industry.
According to Chad, for coffee producers to be profitable, we need to reallocate value in the coffee supply chain. Peter Roberts believes that if it is possible to pay farmers 30% of what consumers spend on coffee, farmers' livelihood problems will be solved.
In addition, we can improve other farmers' rights if there is transparency and dissemination of information in the supply chain. Through information channels, modern technology and social networks, farmers can access the latest news of the market, understand the prices, costs and benefits they deserve. At the same time, thanks to the development of the Internet, 4.0 technology makes farmers shorten the distance with other stakeholders in the chain from which they can decide for themselves and ask for a price that is suitable for their quality.
In addition, consumers can buy sustainable, socially responsible coffees to help farmers. In the supply chain of sustainable coffees, businesses will ensure that farmers are paid a fair and equitable price for their products, while supporting farmers to develop skills, improve High quality and environmental protection. Therefore, using sustainable coffee is not only a way to enjoy a good cup of coffee, but also a way to show care and respect to the coffee farmers who bring give us joy every day. If you want to experiment, visit XLIII Coffee to select sustainable coffee beans from growing regions around the world!
Source: perfectdailygrind
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