Posted June 20, 2005,
Coffee, next to oil, is the second most widely traded commodity
in the world. Earnings of the 50+ producer countries around the
world have fallen by 50% to a 30 year low in 2002 /2003, from 10
billion dollars a year to some 5.5 billion dollars, since 1998.
Only recently prices started to recover, but where prices for producers
decrease, the roasters max their profits.
In September 2004 the draft for the Common Code for the Coffee
Community (4C), was presented and signed by major roasters to improve
working conditions and environmental standards in the industry.
Although a step improving sustainability, it seems to be too little
Already initiatives like Fair Trade and Utz Kapeh are operational
and are making a real difference by opposition to the 4C code, which
is not yet ready for implementation.
It is not clear if the devised system will comply with the minimum
standards of transparency and traceability.
Producers need help to restructure their business. No real instrument
is being developed to support producers to comply with the standard.
Special attention will be required for smallholders.
There is no system ensuring that producers who comply with the
standards will get a better price for their product.
Roasters should also commit themselves. A buyer’s code or
rules and obligations for trade and industry are still missing.
The Code as it takes form is actually limited to the behavior of
producers. There is no agreement on a transparent pricing mechanism.
The code does not include a ban on GM coffee.
According to Walter Zwald, former president of the Swiss Coffee
Trade association, the 4C is an attempt from the multinationals
to counter the new sustainable initiatives: “..the arrogance
with which the 4C initiative has been actually worked out suggests
that there is real concern that schemes like Fairtrade, Utz Kapeh,
Rainforest Alliance and others that actually demand a premium be
paid for improving the lives of workers and the quality of coffee,
are finally biting into the main stream roasters…the whole
initiative could be constructed as their attempt to make themselves
look good in the eyes of the public without having to pay for it.”
Call for a Worldwide Sustainable Coffee Fund
Alternative to the 4C, Mr. Zwald advices manufacturers to introduce
a voluntary levy on raw coffee beans to promote sustainable developments.
In an attempt to move this idea forward Mr. Zwald presented a proposal
for a Worldwide Sustainable Coffee Fund, including a levy of $1
on every 60kg bag of beans to be paid for by the industry. The levy
should raise a $70 million a year, split between projects to support
small producers and promotion of coffee consumption in the world.
Informally backed by 70% of the coffee-producing countries, the
ICO for now agreed to explore the proposal for a second time, after
rejecting it after its first presentation in 2001.
Background and additional info: http://www.insnet.org/ins_headlines.rxml?cust=2&id=1209