Coffee Talk
After two years of ongoing dialogue, Oxfam America and its partners have scored a major victory for coffee farmers worldwide.
by Kelley Damore
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In September 2003, Procter & Gamble (P&G), the largest seller of coffee in the US, announced it would introduce Fair Trade Certified™ coffee products through its specialty division, Millstone. This announcement represents the potential purchase of at least two to three million pounds of Fair Trade Certified™ coffee over the next three years—extending a critical lifeline to coffee farmers in the midst of crisis.
The P&G announcement came in response to pressure from Oxfam, the media, consumers, investors, the US Senate and House of Representatives, human rights activists, humanitarian organizations, and Oxfam partners. Oxfam has spent more than two years of campaigning and dialogue with P&G and more than 4,000 hours of full-time work. In addition, Oxfam has organized 465 students at 361 college campuses to advocate for Fair Trade Certified™ coffee in their dining halls and raise awareness of the crisis in their communities.
In 2001, the price of coffee plummeted almost 50 percent; since then, it has continued to hover near a 30-year low of $0.42 per pound of unroasted beans—approximately half the cost of production. Fair Trade Certified™ coffee guarantees farmers a minimum of $1.26 a pound, enabling them to not just break even, but also turn a profit.
Fair Trade Goes Mainstream
With this decision, P&G joins more than 200 companies in the US already offering Fair Trade Certified™ coffee, including Equal Exchange, Starbucks, and Green Mountain Coffee. P&G's involvement is especially significant, because of its strong presence in supermarkets, where most US consumers buy their coffee.
Java Jolt
Transfair USA estimates US imports of Fair Trade Certified™ coffee in 2003 increased 85% over 2002.
In April 2003, Dunkin' Donuts, the largest coffee chain in the world, announced it would begin selling espresso beverages using 100% Fair Trade Certified™ beans. As fair trade penetrates mainstream markets, consumers should begin to recognize the fair trade label as a mark of high-quality, socially-just coffee.
What This Means For Coffee Farmers
In Ethiopia, where 1.1 million farmers sell their products through private cooperatives, the groundswell of support for fair trade is greatly encouraging for Oxfam partners like the Oromia Coffee Farmers Cooperative Union (OCFCU). The OCFCU was established in 1999 to help the 100,000 families working in Oromia cooperatives. Oxfam has helped OCFCU obtain organic and fair trade certification, enabling the cooperative to tap into critical new markets.
In a country where the average per capita income is about $100 per year, fair trade can make a real difference. "There are communities growing coffee that have not bought clothes for the past three years," said Tadesse Meskela, general manager for the cooperative. Furthermore, the people of Oromia find it difficult to educate their children. When families face hard times, school expenses are hard to meet, Meskela explained.
Already, OCFCU is returning 70 percent of its gross profits back to the fair trade cooperatives. Beyond helping OCFCU get certification, Oxfam is providing funds to help OCFCU upgrade their offices with computers, buy equipment and trucks to process and transport coffee, and cover marketing expenses.
The Coffee Crisis Is Not Over
While the growth of Fair Trade Certified™ coffee is encouraging, it will not solve the coffee crisis on its own. Coffee-producing countries, roasters, farmers, governments, and consumers must take immediate steps to help coffee farmers make a decent living and provide necessities for their families. Oxfam is urging the US government to re-join the International Coffee Organization and adopt a global strategy to address the coffee crisis.
In addition, P&G, Nestlé, Kraft, and Sara Lee, the largest coffee companies in the world, must take responsibility for ending the crisis, as each company continues to make a profit while farmers struggle to survive. In December, Oxfam issued a scorecard rating the big four on the basis of what they have done in the past year to address the crisis.
Oxfam Rates the World's 4 Largest Coffee Roasters in 2003
Scores are based on the price companies paid to farmers (70% of score), support for policy alternatives (10%), financial contributions (10%), and leadership in industry-wide initiatives (10%).
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Company: Procter & Gamble
CEO: A. G. Lafley
Score: 49%
Brands: Folgers, Millstone
P&G has been the clear leader among the major roasters for its commitment to purchasing Fair Trade Certified™ coffee and to paying coffee farmers a decent price. However, P&G has done little to work with the rest of the industry to address the coffee crisis and has few guidelines on buying coffee.
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Company: Nestlé
CEO: Peter Brabeck-Letmanthe
Score: 43%
Brands: Nescafé
Nestlé led the major roasters in participating in international forums, supporting the International Coffee Organization, and buying directly from farmers. But Nestlé failed in a key area: paying farmers a decent price. They still refuse to buy Fair Trade Certified™ coffee.
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Company: Kraft
CEO: Roger Deromedi
Score: 38%
Brands: Maxwell, Gevalia
Kraft worked with others in the coffee industry to address the coffee crisis. It also contributed to social development programs. But these activities were undermined by its failure to buy Fair Trade Certified™ coffee.
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Company: Sara Lee
CEO: C. Steve McMillan
Score: 27%
Brands: Hills Bros., Chock Full o'Nuts, Chase & Sanborne
Sara Lee has performed the worst of the major roasters in almost every aspect of dealing with the coffee crisis. It buys some Fair Trade Certified™ coffee in the US but has no plans to expand in other countries. Sara Lee is falling behind the other roasters.