Verified Living Income White Paper: Transforming Procurement for Improved Farmer Livelihoods by Grayson Caldwell: Bellwether Coffee, Cory Gilman: Heifer International, Monica Terveer: Sustainable Harvest
May 18, 2021
A landmark research collaboration from Bellwether Coffee, Heifer International, and Sustainable Harvest, determined a Verified Living Income for coffee farmers and what that means for green coffee pricing. The VLI initiative was developed with “the goal of setting prices based on farmers’ livelihood needs” to find the minimum price for green coffee purchasing that would make ends meet for producers. The price per pound of green coffee that would allow producers to have a living income is “$2.24 per pound Free on Board (FOB), and $1.89 at the “farmgate.”
The coffee industry is worth over $200 billion USD, yet only about 10% of that returns to coffee producing countries and even less of that finds its way to the farmer. As a result, 66% of smallholder coffee producers live below the international poverty line, yet they produce almost 60% of the world’s coffee supply.
Coffee producers are continually facing larger challenges producing coffee, like “instability, including: deforestation, plant diseases, new and spreading pests, and the various impacts of climate change (temperature, precipitation patterns, extreme weather conditions, etc.). In 2020, COVID-19 and hurricanes Eta and Iota in Central America further stressed a fractured system, leaving many in coffee communities without access to healthcare, food, transportation, and education.”
This research has important implications for coffee producers and roasters alike who are searching for ways to make coffee a more sustainable industry. Supply chain dynamics have always left coffee producers at the bottom, earning less for their product, as prices increase along the chain and into the hands of the consumer. This project is a huge step in the right direction to ensure the ones taking the most risk can earn some of the reward.
We are excited to see this research and hopeful for the results of the study to spread across the industry and influence buying behavior from roasters and retailers. Sustainability in the coffee industry begins at the heart of the supply chain with the producers. If smallholder farmers cannot, at the bare minimum, break even for production, then coffee cannot and will not be sustainable.
Read the full study here Verified Living Income White Paper: Transforming Procurement for Improved Farmer Livelihoods
