Jeremy Gaines
Center for Global Development
+1 (202) 416-4058
jgaines@cgdev.org
For immediate release:
August 7, 2018
Washington – How much does fair trade help poor coffee farmers? A new study suggests that the poorest farmers lack the resources to get certified without extensive, and ongoing, assistance.
Fair trade products have exploded in popularity over the last two decades, and in 2014 more than 40% of all coffee was produced under one of four initiatives: Fairtrade, Rainforest Alliance, UTZ Certified, and 4C. The study reviews the literature assessing these initiatives and found evidence of modest benefits overall, but not for the most vulnerable producers.
“Consumers pay higher prices for fair trade coffee, thinking it benefits farmers and the environment. But too often the poorest farmers are missing out on the benefits because they lack the capacity to participate,” said Kimberly Elliott, the author of the study and a visiting fellow at the Center for Global Development.
The study found:
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Sustainability standards, particularly Fairtrade, raised the prices paid to coffee farmers, but there’s less evidence that farmer incomes rose after considering the cost of certification and compliance.
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Larger coffee producers and some smallholder farmers benefit from sustainability standards, but not the poorest farmers. Poorer farmers often don’t have enough land, labor, or credit to make certification worthwhile without external financial support.
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Only 25% of sustainably-produced coffee is sold as sustainably certified, because of a lack of demand. That means small producers might pay the costs of certification, but then aren’t able to sell the volume at a high enough price to recoup their investment.
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More evidence is needed to be able to truly evaluate the benefits of coffee certification standards. Further research will benefit farmers and consumers alike.
“The bottom line is that for fair trade coffee certification schemes to work, they have to increase prices or productivity enough to cover farmer’s costs,” said Elliott. “And without greater consumer demand, the benefits of sustainability standards will remain limited and tentative.”
You can read the full study at /publication/what-are-we-getting-voluntary-sustainability-standards-coffee.
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