The proliferation of the most popular third-party sustainability certifications in coffee has led to modest benefits to coffee producers overall, though many of the world’s poorest farmers lack the resources to participate, and supply of certified coffee may be outpacing demand.
Those are some of the biggest takeaways from a policy report published today by the Washington D.C.-based think tank the Center for Global Development that echoes numerous studies on the efficacy of voluntary certification schemes over the past decade, while attempting to summarize their findings.
“Consumers pay higher prices for fair trade coffee, thinking it benefits farmers and the environment,” paper author Kimberly Ann Elliot, a CGD visiting fellow who has written numerous books on international development and trade policy, said in an announcement today. “But too often the poorest farmers are missing out on the benefits because they lack the capacity to participate.”
That’s not to say farmers are better off by not participating; it merely means that many are left out of of the four most popular certification schemes — Fairtrade, Rainforest Alliance, UTZ and the entry-level 4C — because compliance is not viable due to cost, infrastructure, access to technical information, or other factors. The paper follows the results of a separately conducted geographical analysis in May showing that many of the world’s most vulnerable smallholder farmers do not have reasonable access to certification schemes.
Despite that reality, participation in certification has been growing upward overall. Elliot found that by 2014, more than 40 percent of all coffee was produced under one of the big four certification initiatives — Rainforest Alliance and UTZ had not yet announced their merger at the time of her research — yet only 25 percent of that coffee is sold as certified.
“To the degree there are benefits to certification, a key obstacle to increasing or extending those benefits is the fact that the supply of certified products is so much larger than the demand,” the paper states. “Producers must invest time and other resources up front to obtain certification, but often without a guarantee that they will be able to find buyers that value the extra effort. When only a portion of certified coffee receives a premium price, the additional revenue may not be enough to cover the additional costs involved in certification. To better assess the extent of this problem, it would be useful for the initiatives to release more information about turnover among certified operations and how long they tend to maintain their certification.”
It is worth noting that some amount of funding for the policy paper was provided by Benckiser Stiftung Zukunft, a charity foundation associated with the German billionaire Benckiser family and JAB Holding Company, owner of some of the biggest coffee roasting companies in the world.
The paper does mention “direct trade” — or what we might call private, self-monitored trading schemes — as an alternative to third-party certifications.
“Whether that trend turns out to be a viable alternative will depend on the rigor — and transparency — with which companies implement these private efforts, and promote them to their customers,” Elliot wrote. “From the other direction, the decision by the Sustainable Agriculture Network, which had previously collaborated with RA, to withdraw from certification efforts, and the decision by Rainforest to merge with UTZ, suggest that at least some of these initiatives are having trouble responding to the demands for greater efficiency and effectiveness. There will remain a core group of consumers that will look for assurances that their coffee (and other commodities) is produced sustainably. How much that group will continue to grow is the big question.”
Read the complete report: “What Are We Getting from Voluntary Sustainability Standards for Coffee?” by Kimberly Ann Elliot.
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
I’m the CEO of a company by the name of Not 1 Bean Ltd. http://www.not1bean.com.
We only ever roast coffee in the developing country in which it was grown, this simple act leaves 30% more revenue in the hands of coffee farmers and their communities (considerably more than Fairtrade where just 20c is the norm).
Until publications and the coffee industry in general accept the fact that current methods are unsustainable with the average age of a Colombian farmer being 56 and in Africa 60!, and face up to coffee roasting being the right of the farmer, then nothing will really change. There is no issue with freshness, roast coffee sits on supermarket shelves for over a year in numerous cases, and we fly daily often supplying speciality coffees at far lower prices given the difference in roasting costs in these countries.
Current practices (roasting on UK high streets for instance) are condemning farmers to poverty and enforcing the viewpoint that people in these developing countries are only good for fieldwork – with all the connotations that brings.
Thank You, very informative article – it appears that the industry could be about to face it’s problems.
Gary, two factors mitigate against wide acceptance of your model, not to say it does not have merit.
But here in the US, many folks prefer to know their roaster, and trust that HE is sourcing quality coffees that are also ethically traded. Sure, roasting at origin closes some gaps in the value chain. But for a shop to be able to maintain stocks from multiple origins, AND provide the freshness demanded in the third and fourth wave markets here, I do not see roasting at multiple origins and the logistics of timely arrival for blending and brewing to be good friends.
The other issue is that of the roaster’s particular style…. a very personal thing. When gathering multiple coffees from multiple widespread origins and timing their arrival at the local shop for effective retail use, I think you are adding a level of complexity that rises to the level of a problem. Most small shops that matter “get on” to their local patrons and strive to provide for them what THEY want.
Seems the only viable transport means for small bag roasted coffees would be air…. the cost per delivered pound will be several multiples of the same coffees from the same origins leaving as 60 or 70 kilo bags of green, via seafreight containers, direct to US warehouses. This HUGE difference in cost of delivery can then be left in the hands of the grower, as it is not consumed between origin and destination.
And freshness in the US Specialty market IS a huge issue…. many shops insist on three to five days off roast, maybe up to seven. One hitch in the transport chain, the shop is out of coffee…… or has two week old stuff waiting to hurt their reputation.
All of the certification systems have advantages, strong points, disadvantages, and weak points. Back when, most were better than nothing, raising the percieved and actual value of the green well above commodity grade. The glass was shattered for me when, at an SCAA event, I attended a panel discussion event on Fair Trade certification and the organisation behind it. I learned that the Fair Trade system will NOT certify a family farm, the reason given (from the Fair Trade’s representative speaking) that the added costs of operating a coop to middle the funds, etc, set them at a disadvantage over against a family farm who did not have those costs, thus the Coops wanted the family farms excluded. And it was done.
Any “system” in place attempts to hit the major points to address perceived issues, and provide a “fix” for them. Every producer lives and operates under different circumstances, thus to expect a One SIze Fits All is perhaps a bit much. Do these certs help? Yes. If nothing else they create an awareness of some of the problems the industry faces. Are they cure-alls? Probably not. Do they have a place? In may cases, yes.
The importers whith whom I deal hold VERY high standards for every link in the chain from dirt to their warehouse floor, and lately, even beyond in education into the shop. They know what goes on “on the ground” at origin, are most often involved throughout the entire production process, always with a view to improving quality of the final exported coffee, but also the situations of the producers. This latter often comes by way of price premiums paid for exceptioinal coffees, often the end product of an ongoing team partnership model. You grow better coffee, we can pay more for it, our buyer/roasters get more for it, and we can help you grow that better coffee. Win win win win at every turn. No formal system in place, but it works.
Programmes are a good start, but cannot be wholly relied upon in every case. The effort to “raise the bar” is good, and needs to continue. Perhaps expecting every bag sold to have some certification attached to it, and some premium paid per some formula, is an unreachable goal. The underlying principles which lead to better coffee and better lives for the producers are the key. Educating them somehow is necessary. The cert programmes are a great start. Perhaps I am a bit naif, but I think as the industry moves beyond the cert programmes everyone will be better off. Perhaps holding their principles as minimum entry level standards would be a valid pathway.