The organisation has invested in a more rigorous impact monitoring system. Impact studies carried out over the year showed a range of positive benefits. For example in research by CODER on bananas in Colombia, all hired workers indicated their quality of life was better after their plantations joined Fairtrade, while 96% of the smallholder farmers affirmed that their economic situation had improved, on average by 34%, since joining Fairtrade. Research also highlighted challenging conditions for casual labourers on small-scale farms and the need for greater market access for many producers. Fairtrade is already taking steps in both areas.
1.2 million small-scale farmers and workers currently benefit from the fair and stable price and extra Fairtrade Premium paid to farmers in 63 developing countries. The benefits however reach whole communities through improvements paid for by the Fairtrade Premium such as road building, clean water supplies, education and health. In fact more than 6 million people around the world including Pacific nations such as Papua New Guinea and Fiji reap the rewards of Fairtrade.
The survey also shows that more of us are buying Fairtrade products with 55% of respondents having bought Fair trade Certified products in the last year, and 20% buying every month.
Around 125 million people worldwide depend on coffee for their livelihoods. Coffee is the most valuable and widely traded tropical agricultural product and 25 million smallholder farmers produce 80% of the world’s coffee. But many of them fail to earn a reliable living from coffee.
- 52 million Euros of Fairtrade Premium money delivered to Fairtrade producers for development projects in 2009
- 827 Fairtrade certified producer organizations
- 70 countries that where Fairtrade products are sold
- 3.4 billion Euros in global retail sales in 2009 and 15% annual growth
- 26 countries where Fairtrade products are marketed and promoted by national organizations
- 27000 products worldwide bearing the Fairtrade Mark
- 2849 businesses licensed to use the Fairtrade Mark
All numbers based on 2008-2009
For countries that produce it, coffee exports generate a significant proportion of national income and are a vital source of the foreign exchange earnings that governments rely on to improve health, education, infrastructure and other social services. For instance, Burundi relies on coffee for 60 per cent of its export earnings, Honduras for a quarter, Nicaragua for nearly a fifth. In Ethiopia, 15 million smallholders, nearly a fifth of the population, depend on coffee for their livelihood – high global commodity prices contributed to record coffee exports in 2010/11 which accounted for 30 per cent of the country’s total export earnings. In Uganda, half a million smallholders produce coffee, the primary source of income for around 2.5 million people or 8 per cent of the population.
But while coffee is clearly profitable for food companies, it’s a very different story for coffee farmers. The share of the retail value of coffee retained by the producer has fallen over the decades – in the 1970s, producers retained an average of 20 per cent of the retail price of coffee sold in a shop. When oversupply caused prices to crash to historic lows during the coffee crisis of 1994 – 2004, research found coffee growers received just 1-3 per cent of the price of a cup of coffee sold in a café in Europe or North America and 2-6 per cent of the value of coffee sold in a supermarket.
Farmers are also the worst affected by the notorious volatility of world coffee prices. In recent years the price of Arabica coffee has swung from a 30-year low of 45 cents a pound in 2001 to a 34-year high of almost 309 cents in 2011. And then, between May 2011 and December 2013, prices fell by 65% as a result of the Euro crisis and oversupply of coffee. This price volatility has significant consequences for those who depend on coffee for their livelihood, making it difficult for growers to predict their income for the coming season and budget for their household and farming needs. When prices are low farmers have neither the incentive nor resources to invest in good maintenance of their farms by applying fertilisers and pesticides or replacing old trees. When prices fall below the costs of production, farmers struggle to put adequate food on the table and pay medical bills and school fees.
What is the economic situation of small farmers in the coffee industry?
A: Coffee is produced both on large plantations and by small farmers. Typically, Fair Trade farmers cultivate less than 3 hectares of coffee and harvest 1,000-3,000 pounds of unroasted coffee a year. Small farmers are perhaps more aptly defined by those farmers who rely principally on their own families' labor. This makes Fair Trade potentially representative of an estimated 75% of all coffee farmers. Many coffee farmers receive prices for their harvest that can be less than the costs of production, forcing them into a cycle of poverty and debt. They are often forced to sell to middlemen who pay them half the market price, generally between $.30-.50 per pound. Family farmers usually bring in a cash income of $500-$1,000 a year for their coffee.
What are the labor problems and working conditions in the coffee industry?
A: Conditions for coffee workers on large plantations varies widely, but most are paid the equivalent to sweatshop wages and toil under abysmal working conditions. In Guatemala for example, coffee pickers have to pick a 100-pound quota in order to get the minimum wage of less than $3/day. A recent study of plantations in Guatemala showed that over half of all coffee pickers don't receive the minimum wage, in violation of Guatemalan labor laws. Workers interviewed in the study were also subject to forced overtime without compensation, and most often did not receive their legally-mandated employee benefits. The total average income reported was Quetzales 1006 ($127.37/month). According to 1998 data published by Guatemala's National Institute of Statistics, the cost of the Basic Food Basket for a family of five was 1353.86 Quetzales per month ($171.37 @7.90 exchange rate). The Basket of Goods and Services (including food, education, healthcare, clothing, and transportation) was Q2470.55 ($312.72).
[ IN NEW ZEALAND: The minimum wage rates are reviewed every year. The current adult minimum wage rates (before tax) that apply for employees aged 16 or over are:
- $14.25 an hour, which is
- $114.00 for an 8-hour day or
- $570.00 for a 40-hour week or
- $1,140 for a 80-hour fortnight.
Working conditions on these plantations are harsh; as migrant farmworkers, many workers sleep in temporary shelters with rows of bunk beds. Many times they cook, wash and bathe from the same water source. The study of coffee plantations in Guatemala revealed that only 13% of coffee workers have completed their primary education. Most were not provided with legally-mandated adequate health care.
STATISTICS SUMMARY:
On average, coffee growers received just 2% of the price of a cup of coffee sold in cafes and 5% of coffee sold in supermarkets.Many farmers receive less than production price for their produce forcing them into a cycle of poverty and debt. They are forced to sell to middlemen who pay them half the market price, generally between $0.30 - 0.50 per pound.
Coffee pickers get less than 3% for minimum wage compared to what it is in New Zealand.
In order to get their minimum wage of less than $3 a day, coffee pickers have to pick a 100 pound daily quota. If you live in New Zealand and work an 8-hour day, on minimum wage you can get $114 (before tax).
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