When executives meet over coffee to discuss sustainability goals, there is good reason for them to consider what they’re drinking. Coffee spans a number of sustainability issues including trade policy, social justice, climate change and habitat preservation. Combined, these factors affect the world coffee price.
At $2.24/lb., coffee set a record high in February, 2011.¹ But less than a decade ago, it was at a low of $0.41/lb.¹ Understanding this volatility requires a historical perspective. During the second world war, the European market was closed to Latin American coffee producers, causing their prices to fall. The U.S. was concerned that declining prices would make Latin America vulnerable to Communist influence, so a coffee cartel was established. Import and export targets were set, resulting in the price almost doubling by the end of 1941.⁸ In 1989, with the end of the cold war and the collapse of the International Coffee Agreement, declining coffee prices forced many small producers to quit their farms and move into city slums.² Coffee provides the livelihood for 25 million families around the world⁹ and, by 2001, the world price for coffee had descended to a record low. The stage was set for Fair Trade.
Fair Trade certification of coffee farming cooperatives provides better trading conditions to marginalized producers, while assisting with the cultivation of healthy communities and habitats. For example, as small growers tend not to have the financial means to afford chemical pesticides and fertilizers, Fair Trade supports their use of organic methods.⁴ The first Fair Trade organization began with Oxfam UK in 1964. During the 1960s and ‘70s, many NGOs started their own Fair Trade organizations to provide assistance and support to disadvantaged producers. Fair Trade coffee was first produced in 1973 for the Dutch market, from farm cooperatives in Guatemala.³ Fair Trade has since developed into a widespread movement recognized by governments and mainstream businesses. Fair Trade contracts are critical lifelines for farmers struggling with the effects of climate change.
Although coffee plants can be productive for decades, production and quality are affected by drought or heat in summer. In Spring, dry weather is necessary for flowering, so heavy rains during that time can have a dramatic effect on yield. Latin American coffee production dropped 70 percent in 2010, with industry observers citing the effects of climate change.⁵ While climate change reduces coffee yields, there is a cruel symmetry in the acceleration of climate change by coffee farms. Conventional coffee grows in the sun, requires clearing of the rain forest and high inputs of chemical fertilizer and pesticides, leading to soil and water degradation and reduced biodiversity. When rain forest is cleared, warming trends and droughts will be extended as the trees needed to sequester carbon and buffer temperature changes disappear. In the past thirty years, about half of the world’s coffee farms have cut down their trees to plant unshaded coffee.⁷
Unlike conventional coffee, organic coffee requires the shade of rain forest canopy. Compost from coffee pulp and organic matter from the surrounding forest fertilizes the coffee plants, while the absence of sunlight reduces the number of harmful insects. The phrase “bird-friendly” refers to the necessary preservation of rain forest habitat associated with organic coffee farms. As a means of communicating an organization’s sustainability goals to staff and clients, coffee which is certified Fair Trade and organic can be an excellent medium.
Human Beans Coffee Co., Ottawa’s Fair Trade coffee service
References
¹ ref. http://www.ico.org/prices/p2.htm
² ref. http://en.wikipedia.org/wiki/International_Coffee_Agreement
³ ref. http://www.wfto.com/index.php?option=com_content&task=view&id=10&Itemid=12&limit=1&limitstart=2
⁴ ref. http://www.fairtrade.net/coffee.0.html
⁷ ref. http://www.coffeehabitat.com/2006/10/coffee_growing_/
⁸ ref. http://en.wikipedia.org/wiki/International_Coffee_Agreement