Posted June 10, 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 bn dollar
a year to some 5.5 bn dollar, 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
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, manufacturers should introduce
a voluntary levy on raw coffee beans to promote sustainable
developments. Therefore 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
Peter van Vliet
president of the iNSnet Foundation
Background and additional info: http://www.insnet.org/ins_headlines.rxml?cust=2&id=1209