Coffee farmers 'face destitution'

Top prices are charged for coffee in the high street

Millions of coffee farmers in developing countries are living in extreme poverty while business corporations in the industry continue to make record profits, according to a report published by the international development charity Oxfam.

The report comes ahead of the first World Coffee Conference, a three-day gathering of leading figures in the industry in London, which begins on Thursday.

Oxfam fails to address the fundamental economics of the coffee market in the long term

British Coffee Association

Oxfam is concerned at the growing disparity of wealth between different parts of the coffee industry, following a 60% drop in the value of the crop on international commodity markets in the last three years.

The British Coffee Association has dismissed the report's findings at "too short term."

Rich versus poor

Oxfam says that, in real terms, coffee prices are lower than they have ever been.

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This, it says, is having devastating consequences for poor farmers in coffee growing countries.

Vulnerable at the best of times, Oxfam says they now face a descent into extreme poverty, with serious consequences for health, education and social stability.

Oxfam says farmers are losing out

Meanwhile, the charity says, big multinational food companies, cafe and restaurant chains in rich nations have gained enormously from the drop in prices.

The value of raw coffee beans has fallen sharply in the last three years due to overproduction, but prices paid for the processed product in consuming nations have remained much the same.

Minimum wage

Oxfam says the price of raw coffee exported from producer countries accounts for less than 7% of the eventual cost of coffee to Western consumers - the rest, over 90%, goes to coffee processors and retailers in rich countries.

Oxfam cites increased profits at Nestle, the giant Swiss instant coffee processor, and the fashionable American coffee shop chain Starbucks as evidence of its case.

It is calling for an internationally-agreed minimum coffee price of $1 per pound (0.454kg) - about double the lowest current levels.

Report rejected

In its first reaction, the British Coffee Association (BCA) said it shared Oxfam's concerns over low prices for producers.

However, the BCA - which represents coffee manufactuers selling in the UK - says Oxfam "fails to address the fundamental economics of the coffee market in the long term".

"Increasing prices of green coffee beans without implementing appropriate controls on production would not help the livelihood of the growers in producing countries in the longer term," the BCA argued in a press release.

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