Paying Farmers More

PAYING FARMERS MORE

Our sourcing model is focused on a commitment to equity, transparency, and, above all, integrity. It begins and ends with fair compensation for farmers, whose work makes coffee possible.

In the last year, global coffee prices have significantly increased, and yet, our call to pay farmers more remains as urgent and important as ever. This is because today's prices reflect a brutal truth: climate change and persistently low prices have shrunk global supplies of coffee. Without sustainable price adjustments and investments in farmers, the coffee industry will continue to revolve in and out of crisis.

While the Fair Trade movement and direct trade models have both made meaningful progress in addressing quality of life in coffee-producing communities and inequity in the supply chain, both have fallen short.

Historic Market Highs

Today, the commodity market price for coffee hovers at its highest point ever, capping a year of significant price fluctuations. This is a crucial moment for the industry—one that impacts everyone from coffee farmers to coffee drinkers. But the truth is this: coffee farmers still make far less today than they did 40 years ago.

In 1977, the market hit $3.39 per pound. Adjusting for inflation, that price would be equivalent to $17.65 today. Even at the high market prices we’ve seen this year fall far short of what farmers need and deserve. Furthermore, it is significantly lower than the average inflation-adjusted prices over the last 50 years.

In 2017, we set a minimum price paid to farmers. While many of our coffee producers are paid more than our minimum price, no farmer is ever paid less. We’ve continued to increase this price regardless of the commodity market. As of today, our minimum price guarantee is $3.15 per pound.

While the market fluctuates without regard for the livelihood of coffee farmers, our commitment remains steady. It’s during those inevitable valleys that our guarantee makes a difference for our producer partners.

We have created a model rooted in farmers’ costs and their wellbeing, rather than in a volatile and often arbitrary market price. As a result, we have been able to put farmers, instead of the market, at the center of our exchanges.

A BROKEN SYSTEM

The current coffee pricing system is undeniably broken. For decades, unconscionably low prices have perpetuated a worsening cycle of poverty for millions of coffee farmers and workers globally.

The challenges facing coffee farmers go far beyond fluctuating market prices. The systemic economic injustices within the coffee industry reveal a deep imbalance:

Low Wages Below Living Standards

Many coffee farmers, especially in coffee-producing nations, receive payments for their crops that are far below a living wage. These payments often do not cover the costs incurred to produce coffee, resulting in an endless cycle of impoverishment.

Power Imbalance in the Supply Chain

Large multinational corporations and intermediaries dominate the supply chain, driving down prices and extracting a disproportionate share of the profits. Farmers are left with little leverage to negotiate fair compensation.

Debt Dependency

To maintain operations, many farmers take out loans with exceptionally high interest rates to buy seeds, fertilizers, and equipment. When coffee prices drop—which they often do—farmers struggle to repay their debts.

Unfair Trade Practices

Coffee farmers frequently lack access to high-value markets and depend on intermediaries who may exploit their vulnerability. In many cases, farmers are paid less than the cost of production because they have no alternative buyers.

Environmental Degradation

Coffee farming often comes with significant environmental challenges, such as deforestation and soil degradation. Farmers often lack resources for sustainable farming practices, further exacerbating their financial strain.

Systemic Oppression

Coffee farmers in regions with limited economic opportunities are born into farming communities and lack access to alternative income streams. This lack of choice reinforces a system where they are dependent on unfair wages for survival.

The Path Forward

The solution is clear: we all need to pay more for coffee. This is not only an economic necessity but also a moral obligation. Those of us who appreciate this wonderful beverage must understand the stakes. Without fair compensation, farmers cannot afford to invest in best practices that protect the environment and ensure long-term sustainability. Without meaningful change, we will first face limited access to high-quality coffee and eventually experience prolonged shortages of all coffee.

It is time for all of us—producers, roasters, and consumers—to advocate for a coffee industry that tangibly values and supports coffee producers. Only then can we ensure a future where coffee remains a vital and vibrant part of our lives.

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A BROKEN SYSTEM