Global nonprofit Fairtrade International is now offering “LIRP on Demand,” a tailored service designed to help coffee companies identify living income reference prices (LIRPs) for farmers in their supply chains.
The Bonn, Germany-based group, which has member organizations all over the world, described the service as a natural extension of its existing LIRP processes and methodology, which has resulted in seven country-wide LIRPs for coffee.
Defined generally by Fairtrade as “the price a typical farmer household with a viable farm size and a sustainable productivity level needs in order to earn a living income from the sales of their crop,” LIRPs are broadly viewed as a price-discovery tool for companies seeking more sustainable or ethical supply chains.
After creating its first LIRP for the cocoa sector in 2019, Fairtrade released its first LIRP for coffee in 2021, and now has coffee LIRPs for Colombia, Uganda, Honduras, Indonesia, Ethiopia, Peru and Nicaragua.
Faster than Fairtrade’s country-wide LIRP process, the LIRP on Demand service may take anywhere from three to six months, while being tailored to specific companies’ supply chains, according to Fairtrade. The service also includes annual adjustments for inflation for up to four years.
Fairtrade has not publicized the costs or funding mechanisms related to the service.
Daily Coffee News photo by Nick Brown.
“We believe that businesses must play a part in achieving sustainable livelihoods for farmers, and we see momentum in the market from leading retailers and brands,” Carla Veldhuyzen van Zanten, senior advisor of sustainable livelihoods at Fairtrade International, said in an announcement from the group this week.
The initial LIRP movement in coffee came with the most recent commodity price crisis of 2018/19, in which the “C Price” for coffee routinely hovered between $1-2, threatening the livelihoods of millions of the world’s smallholder coffee farmers.
Although coffee prices have since rebounded to today’s higher levels, the green coffee market remains characterized by volatility, with smallholder farmers generally more vulnerable to price-related risks.
Fairtrade International is hosting a webinar to introduce companies to its new LIRP on Demand service on Tuesday, May 13.
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Nick Brown
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
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