(Noted News) — A recent report from a group of NGOs focused on the coffee industry suggests that most of the sustainability and ethical efforts by coffee companies are more of a marketing ploy than a genuine effort.
The Coffee Barometer is an annual report written by multiple organizations; Conservation International, Hivos, Oxfam Belgium and Solidaridad, and Ethos Agriculture. The report for 2020 shows that most coffee farmers are operating at a loss, on an unsustainable business model, and that the industry is rife with environmental and human rights abuses.
The report comes amid a growing interest and demand for morally produced coffee as more people look for the “ethically sourced” label on much of their food and drinks.
Coffee Barometer says that creating a sustainable link between coffee producers and coffee consumers still “remains elusive,” because of the sector’s inclination to continuously expand and meet demand. Even as the consumption of coffee grows each year, the price, and therefore the livelihood of the farmers, has gone down.
According to the report, the countries that produce all the world’s coffee beans, such as Brazil, Colombia, Brazil, Indonesia, Guatemala, or Honduras, end up making less than 10% of all the money generated from the coffee industry. This is because before the coffee makes it into our cups, it passes through exporters, traders, webs of financial wizardry, roasters, and retailers.
Coffee Barometer says that even though they produce nothing and never touch any coffee beans, a Swiss company handles half of all the coffee exports in the world.
“In the last decade, Switzerland has emerged as a leading hub in the global trade of coffee, probably because of a combination of favorable tax and trade regulations (Public Eye, 2019).5 Most of the trade houses have their head office—or at least its trade administration office—in this landlocked country. They typically buy future coffee contracts from suppliers abroad and resell them to clients who are also abroad, meaning the coffee never touches Swiss soil. Like this, the members of the Swiss Coffee Trade Association (SCTA) handle a volume of more than 50% of global coffee exports (SCTA, 2020).”
The report also notes that in the last two years, the price of coffee has remained 30% lower than usual, while operating costs like water, fertilizer, and labor haven’t moved or have gotten more expensive. This has pushed 44% of coffee farmers in Cameroon, and 50% of coffee farmers in Nicaragua below the poverty line, and has threatened the existence of some famous coffee varieties from Kenya and El Salvador.
Coffee is produced on over 12.5 million farms worldwide, and almost all of them are small, labor-intensive operations employing entire farming families, which means huge amounts of people are relying on this industry to survive.
And while the growing awareness of inequity in the coffee industry is a start, Coffee Barometer says that since there’s no concrete system to track progress, coffee companies are prone to giving hollow promises and embellished claims.
“Of course, the number of companies publicly stating sustainability commitments and publishing CSR reports is not a good proxy for the extent to which these commitments are being met. Furthermore, it is not about what is easy to monitor, it should be about what actually matters and is relevant in the context of coffee production, trade, and consumption. But what is challenging about a sustainability focused analysis of the results, is that companies’ sustainability reports do not have to be compliant with a systematic set of shared and measurable standards (contrasting the procedure with their financial disclosures).”