Coffee Impact Report – 2021
Our Geographic Reach
Coffee continues to be the most significant Fairtrade commodity product in terms of production volume as well as the number of producers involved. At the end of 2021, there were 656 Fairtrade certified coffee producer organizations across 32 countries, with a total of 838,116 farmer members. With new producer organizations certified, this led to an overall increase in Fairtrade coffee cultivation, representing 13% growth over the previous year. Peru, Honduras, and Colombia remained the top 3 largest suppliers of Fairtrade coffee for the United States in 2021.
The historically low coffee prices in 2019, combined with the COVID-19 pandemic, will mean continuing hardship for coffee farmers for the foreseeable future. To address this, Fairtrade has acted in support of farmers by participating in the Specialty Coffee Association’s (SCA) Price Crisis Response Team, and in parallel, embarked on a journey to establish Living Income Reference Prices for coffee. Triggered by the urgency to address economic challenges threatening the sustainability of the coffee trade, farm record books were rolled out among more than 2,000 coffee farmers across seven countries and three continents from 2020 to 2021 to establish a baseline and help define Living Income Reference Prices for coffee. Fairtrade subsequently launched its first coffee Living Income Reference Price for Colombia in 2021.
“Today in Colombia the domestic price is very good. It’s around double what we had two years ago. So, my people are saying: how long are we going to be here? How can we secure this price in the future? If prices would really stay like this, we would make so much more progress. But working at a loss, without knowing at what price we’re going to sell is very complicated.” – Camilo Enciso, farmer, and commercial manager of the coffee producer association ASOPEP
The Fairtrade Minimum Price and Premium are still mandatory for all Fairtrade coffee sales and provide a safety net that has helped many farmers stay afloat during recent coffee price crises. Fairtrade will be developing living income projects with coffee companies and producer organizations to progress on the various pathways to close the income gap, for instance, by optimizing yields or improving quality
43% of Americans enjoy specialty coffee, which is a five-year high, and up 20% from January 2021 according to NCA
Consumers are demanding higher transparency, including how products are produced (26%), how ingredients are sourced (25%), sustainability practices (19%), and value-based information such as fair trade (26%) says Nielsen IQ and FMI
Consumers are willing to pay US$1.36 more for a pound of coffee that’s produced in an eco-friendly way and consumers’ willingness to pay for fair trade is positive and significant according to SCA
US Sales, Volumes & Premiums
In 2021 coffee prices experienced multiple spikes and high volatility. When the market price exceeded the Fairtrade Minimum Price, farmers were able to negotiate with buyers to sell at a higher price based on quality and other factors. However, when market prices fell well below the cost of sustainable production for most coffee farmers, Fairtrade cooperatives were guaranteed at least the combined Fairtrade Minimum Price and Premium of US$1.60/lb. In addition, coffee farmers receive a Fairtrade Premium of 20 cents per pound for conventional coffee and an additional 30 cents per pound for organically produced coffee. At least five cents per pound of the Fairtrade Premium is dedicated to farming renovation initiatives to boost production, quality, and sustainability. In the North American market, Fairtrade coffee producers also received over $8 million in Fairtrade Premiums in 2021.
Coffee Premiums Generated Through Fairtrade Sales 2017-21
Fairtrade Coffee Sales Volume (lbs.) 2017-21
The Fairtrade Premium
The Fairtrade Premium sets Fairtrade apart from other certifications and sustainability schemes. On top of the price that farmers and workers receive for their produce or labor, they receive an extra sum of money to invest in improving the quality of their lives. This “Fairtrade Premium” is calculated as a percentage of the volume of products sold. The price is reviewed every three to four years to adjust to local inflation.
As part of the Fairtrade International network, farmers join with other farmers in local cooperatives. The Fairtrade Premium is paid at the cooperative level, so Fairtrade farmers’ democratically elected representatives vote on how the money is used to support business and community development. We believe that farmers are in a much better position to decide what investments will improve the quality of their lives and know best how to spend this money.
Producer Highlight: Sidama Coffee Farmers’ Cooperative Union (SCFCU)
Sidama Coffee Farmers’ Cooperative Union (SCFCU) was founded in 2001 to represent coffee-producing cooperatives in the Sidama zone of southern Ethiopia. Today, SCFCU has grown to represent 57 primary cooperative societies and over 80,000 smallholder farmers, making SCFCU the second-largest coffee-producing cooperative union in Ethiopia. Nearly all coffee produced by member cooperatives is shade-grown in low densities under the canopies of indigenous trees and ‘enset’ (false banana), a staple food crop. Members of SCFCU have been growing and processing Sidama-type coffee for more than 35 years and are now exporting high-quality traceable coffee directly to buyers. The union produces approximately 10,000 tons of high-quality Organic Arabica beans per year, 95% of which are washed.
Based on priority, the union has implemented about 61 premium projects focusing on livelihood improvement social projects, coffee quality, productivity, and sustainability projects:
Community infrastructures like construction of rural roads, bridges, clean water line extension, schools, health centers, grain miller, electric line extension, construction of meeting hall and office, equipment and supplies support for schools & health centers are among social projects implemented using Fairtrade premium funding.
Quality and Productivity
Quality and productivity are the core values of the union. Quality and productivity projects are being implemented using premium and in partnership with development partners. Training on good agricultural practice in coffee, Fairtrade awareness, compost preparation, strengthening internal control/management system, maintenance, expansion, and establishment of coffee processing facilities (pulping, washing & hulling), purchase of coffee transporting trucks, construction of warehouses and coffee drying beds constructions are among targeted premium project interventions.
The cooperative has implemented coffee waste management, switching to renewable energy, and coffee & coffee shade seedling nursery projects. SCFU has also replaced aged and diseased coffee bushes with newly selected variety seeds to improve productivity and ensure sustainability.
Benefits of Fairtrade, according to Farmers
81% of Fairtrade coffee farmers reported Fairtrade remains an important source of livelihood
87% of Fairtrade coffee farmers reported the Fairtrade Premium and better prices stand out as key benefits of Fairtrade
73% of Fairtrade coffee farmers reported they received moderate levels of services and training through producer network support
Fairtrade Premium Use by SDGs
The Sustainable Development Goals (SDGs) are an ambitious set of 17 overarching global goals adopted by the UN General Assembly in 2015 to combat poverty and achieve sustainable development. The goals set the ambition of ending poverty “in all its forms, everywhere,” while leaving no one behind. They represent a powerful opportunity to improve the lives of the 1.3 billion small-scale farmers and agricultural workers upon whom the world depends to produce our food and protect our planet.
But what does this look like on the ground? And how is Fairtrade playing a part in meeting these goals?
Fairtrade Premium investments made by coffee producers contribute to several of the SDGs. While most activities can apply to more than one SDG, here we have mapped each category of spending to a unique SDG for simplicity:
SDG2 (zero hunger) aims to end hunger, achieve food security, improve nutrition, and promote sustainable agriculture. Seventy-five percent of the Fairtrade Premium was reinvested back into farmer organizations, strengthening their ability to participate in markets, access affordable credit, financing costs, the provision of fertilizers and tools to farmers, and training on productivity and farming practices.
SDG1 (no poverty) aims to end poverty in all its forms everywhere. This goal is central to Fairtrade’s mission. Twenty-two percent of the Fairtrade Premium was allocated towards credit services and direct payments to farmer members. These are important means of reducing households’ out-of-pocket expenses and supplementing incomes.
Beyond Certification: Fairtrade Producer Projects
Fairtrade develops innovative, impact-oriented projects, funded by donors and partners with governments, NGOs, and the private sector to develop projects in line with our mission to empower producers and promote fairer trading conditions. These projects are producer-led and time-limited. The Growing Resilient Agricultural Enterprises Program for example, responds to climate change and several challenges facing Ugandan coffee farmers.
Growing Resilient Agricultural Enterprises (GREAN) in Uganda
The Growing Resilient Agricultural Enterprises GREAN supports improved sustainable livelihoods for small-scale coffee producers in Uganda through climate adaptation and mitigation measures, specifically Sustainable Agriculture Land Management (SALM) and climate-friendly energy solutions, business development, gender equality, carbon credits, financial literacy, and financial services. Unsustainable farming methods, climate change, market failures, and unsustainable energy sources have contributed to decreased production and income. The project promotes agroforestry practices that reduce pressure on agricultural and forest lands, increase soil fertility and intensify coffee productivity, here are some key results:
- Over 17,000 smallholder coffee farmers were reached by the end of project implementation.
- Over 90% of the farmers practicing 3 or more sustainable agriculture practices acknowledge increased coffee production.
- Over 98% of the farmers have increased their earnings from coffee. On average, household income earned from coffee per season doubled.
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