This is why we need a more ethical coffee supply chain.

 

One of humanity's most complex challenges remains to eradicate poverty in all its forms.

It is evident that poverty takes many forms. However, some of its causes include unemployment, social exclusion, vulnerability to disasters and diseases, and other circumstances that prevent a person from functioning as a productive member of society. 

Sadly, stigmatisation, rejection, and discrimination are all part of the cycle of poverty, which for most individuals is an intractable downward spiral from which they cannot exit.

Jeffrey Sachs, an economist at Columbia University, estimated it would cost about $175 billion annually to end extreme poverty worldwide in 20 years. This amount represents less than one per cent of the combined income of the world's wealthiest countries. 

 

• According to the Global Multidimensional Poverty Index report published by the United Nations, approximately 1.3 billion people live in multidimensional poverty in 107 developing countries.

• Both extreme and moderate poverty remain primarily rural, with the vast majority, 78 per cent of the world's extremely poor, living in rural areas where agriculture is the primary source of income.

• While many may have escaped extreme poverty, these gains may be easily reversed. An example of this would be the COVID-19 pandemic that reversed the steady progress in poverty reduction over the past 25 years.

• Most rural poor are smallholder farmers, responsible for most global food production. They are characterised by low productivity, inadequate economic diversification, high rates of underemployment, and limited employment opportunities. 

• There is a disproportionate impact on women; they are more likely to live in poverty due to unequal access to employment, education, and property.

• Poverty forces children into the labour force. Almost sixty per cent of child labour worldwide occurs in agriculture, where children are often forced to work under hazardous conditions, putting their health, education, and prospects at risk. 

 

When we consider the status quo of the coffee industry.

 

For the past 20 years, international coffee prices have continued to fall and thus over this period, the income received by the producing countries has declined from 24% of the value in the mid-90s to 16% in 2017 to such an extent that some Latin-American producers are refusing to sell their crops (Basic, 2018). 

The status quo in the coffee industry is that most consumers are not aware that the price of coffee in the commodities market is insufficient for coffee farmers and their employees to sustainably turn a profit or earn a living wage.

This lack of transparency is supported by antitrust laws that protect companies from sharing price information. Unfortunately, this translates into brands telling disingenuous sustainability stories without highlighting that coffee producers do not earn sufficient income at low coffee commodity prices.

Consequently, consumer trust in brands and their stories around coffee farming sustainability, which is becoming distorted as consumers already believe they support farmers' livelihoods. This translates into less willingness to pay more and lower demand for change from the consumer side.

 

For all this and more, join us to make coffee more ethical. 

Making coffee better for everyone.