Global coffee production faces deep sustainability issues. International coffee prices have been extremely low in recent years, putting the livelihoods of producers under severe and constant pressure. Farm revenues decreased while costs for inputs and expenditures for food and non-food items are on the rise. As a result, many coffee farmers around the world are unable to even meet their costs of production.
The low prices have a devastating impact on the 25 million smallholder coffee farmers, their families and communities worldwide, and on the landscapes they help to manage and depend on. This situation is aggravated by deforestation, the destruction of biodiversity, and the impacts of climate change.
The 2020 Coffee Barometer
The 2020 Coffee Barometer, published by a coalition of international NGOs, calls on the coffee sector to step up their efforts to address the severe sustainability emergencies in the sector. The overall advancement on making the sector sustainable is deemed to be too slow and too little. To increase their impact, industry actors need to substantially step up their level of investments and commitments and should be transparent on progress. According to the barometer, the solution lies in a mix of voluntary and mandatory (legislative) approaches, which the Rainforest Alliance fully supports.
Rainforest Alliance contributes to a more sustainable coffee production
Independent Voluntary Certification Schemes (VSS) are an important part of the mix of solutions needed for a more sustainable coffee sector. VSS, like the Rainforest Alliance and UTZ certification programs, address a wide range of sustainability problems, economic, social and environmental. Plus, they are externally verified, unlike most other multi-stakeholder and company initiatives. A solid body of independent studies recognizes the overall positive impact of the UTZ and Rainforest Alliance programs1 2 3 4. We recognize, however, that the impact of our program needs to be deepened still. We are working towards a strengthened certification program that focuses on increased transparency, evidence-based improvements and shared responsibility. Last year, we published our new 2020 Certification Program.
We believe the inclusion of shared responsibility is central to addressing the imbalance of value and risk in global supply chains. Currently, only a small part of the value in the coffee supply chain is reaching the producer, though they carry most of the risks, burden of compliance, and the impacts of climate change. All this while having little to no power in negotiating prices, terms of trade, and the additional resources required for sustainable production. The coffee supply chain needs to become more inclusive—both value and risk need to be shared more evenly among all supply chain actors.
Our shared responsibility approach will contribute to a more even distribution of value and risk. It consists of several new requirements. Supply chain actors will now need to support producers financially with their sustainability efforts by paying them a sustainability differential, as recognition of their commitment to sustainable agricultural practices. They will also contribute to sustainability investments needed to ensure continuous improvement and impact at origin. In addition, not only producers but all actors along the certified supply chain need to demonstrate their commitment to sustainability business practices. They need to comply with the human rights and environmental due diligence guidelines of the UN Guiding Principles on Business and Human Rights and the OECD. They must also contribute towards all workers in the supply chain being paid a living wage.
Roasters and buyers need to step up their efforts
Less than 25% of global coffee production is procured as standard-compliant by the coffee industry, while as much as 55% of global production volume is certified. Even allowing for double and triple certification, this means that a substantial number of farmers invest in achieving certification but are unable to recognize the economic benefits of improved market access and price. The Rainforest Alliances continues to appeal to the industry to favor certified coffee over conventionally produced coffee in order to support producers and help create a sustainable sector.
Create more balanced supply chains
And besides boosting certified sourcing, more is needed from the coffee companies. VSS focus on the farm-level and single supply chains, while the causes of some of the problems lie beyond. They are deep-rooted socio-economic challenges, linked to structural issues across the country, region or entire sector and are caused by structural imbalances in supply chains or weak governance and government. Coffee companies need to contribute to solving these root causes by making their supply chains more balanced. An example of an important action roasters and buyers need to take is changing their procurement practices to ensure that producers receive a decent payment for their crop within a timely manner. Producers often receive a price for their coffee that is lower than their production costs and payment terms can be as long as 200 days. This means producers are unable to plan ahead, invest sustainably or provide a decent livelihood for themselves and their family. This is exploitative, outdated, and unfair. It must stop.
Broaden sustainability investments
In addition, companies need to approach sustainability in a more comprehensive and holistic manner. All too often their sustainability efforts remain scattered, focusing on single issues and with limited investments. In order to increase impact and acknowledge where further work is needed, companies, roasters, and buyers need to become more transparent on their sustainability efforts and accomplishments.
Multistakeholder initiatives need more focus on impact
Multi-stakeholder initiatives can facilitative effective collaborative and aligned approaches by the different supply chain actors. And the good news is that there are already several well-established initiatives in the coffee sector. The impact of these initiatives, however, is still limited. The initiatives—and in particular, the companies in the initiatives—will need to become more transparent on what their efforts entail, make bolder commitments, and ensure accountability for those commitments.
The Rainforest Alliance participates in a number of coffee coalitions and multi-stakeholder platforms and will contribute to improving their impact. We are an active member of the Sustainable Coffee Challenge and the Global Coffee Platform (GCP). We are also an active member of the Taskforce of the International Coffee Organization addressing the coffee price crisis with concrete time-bond actions. We contribute to the Coffee Price Crisis Response Initiative led by Specialty Coffee Association, too.
Mandatory approaches are an essential part of the roadmap for a sustainable coffee sector. They will be required in consuming countries as well as in producing countries.
Consuming countries can establish legal requirement on fair business practices and human rights and environmental due diligence in the coffee supply chain. Due diligence legislation can ensure companies identify, prevent, mitigate, and account for potential negative impacts their business processes may have on people and nature. It can also create a level playing field for companies already taking their responsibilities. It helps create an environment for voluntary commitments to be effectively implemented.
In producing countries, governments will need to set the regulatory framework for sustainable coffee production. For example, by banning child labor, hazardous pesticides, and setting minimum wages and minimum prices.
At the Rainforest Alliance we have a long history in working to create a more sustainable coffee sector, and we welcome the insights the 2020 Coffee Barometer provides. As we work with producers and the industry to realize the vision of our 2020 Standard, we look forward to seeing continued positive impact in the sector.
2 Hughell D, Newsom D. 2013. Impacts of Rainforest Alliance certification on coffee farms in Colombia. Rainforest Alliance, New York.
3 Barham BL, Weber JG. 2012. The economic sustainability of certified coffee: recent evidence from Mexico and Peru. World Development 40: 1269–1279.
4 Bini, D. et al. (2016). Socioenvironmental certification of farms is economically advantageous. Sustentabilidade em Debate.