preview

Fair Trade Coffee

Good Essays
Fair Trade Coffee

Fair Trade promotes socially and environmentally sustainable

techniques and long-term relationships between producers, traders and

consumers

The world coffee industry is in crisis. A flood of cheap,

lower-quality coffee beans have pushed world market prices down to a

30-year low. Many now earn less for their crop than it cost them to

grow. Many coffee farmers around the world receive market payments

that are lower than the costs of production, forcing them into a cycle

of poverty and debtWithout urgent action, 25 million coffee growers'

face ruin.

The knock-on effects for national economies are just as catastrophic.

30 years ago, LEDCs received around 30% of the total value of

international coffee sales. Today, this has slumped to just 10%. As

export earnings from coffee shrink, national economies fail and the

first casualties are government education and health budgets.

chart of profit distribution

Coffee is a multi-million dollar industry, but the profits don't go to

the people who actually work so hard to grow the coffee beans, and

carry all the risks of failing crops or falling prices. Most of the

profits go to the shippers, roasters and retailers

chart: coffee producing areas Coffee grows only in the tropics. Mostly

small farmers grow it as a cash crop, a crop that they can sell to try

to make a living.

These farmers are poor, and they do not have any reserves of money to

support them when their crops fail or when coffee prices are low. The

small farmers have to sell their coffee beans when they are ready to

be harvested, and take whatever price the coffee buyers offer.

The govern...

... middle of paper ...

...Ethiopia, Africa's largest coffee exporter and the

birthplace of coffee, has been hard hit by the recent price slump.

Coffee accounts for more than 60 percent of Ethiopia's exports,

generating vital income for its population of 65 million, more than

half of whom live on less than a dollar a day. Ethiopia's coffee

income has dropped by US$110 million, severely affecting the one

million families who depend on coffee for their income. While still

selling to consumers in Western countries for around US$10 per pound,

the world market price for coffee is less than US$0.50 per pound, of

which farmers only receive half. Just five years ago, the farmers

would receive at least five times that amount. As a result of this

massive slump in coffee price, the Ethiopian coffee farmers are facing

a sharp increase in poverty and hunger.
Get Access