Coffee drying in El Salvador | Photo credit: Christian Burri 

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The International Coffee Organization (ICO) has announced a new partnership with the Sustainable Trade Initiative (IDH) to create a new framework for improving coffee farmer profitability and living standards.
 
Together, the organisations will work through the ICO’s Coffee Public Private Task Force (CPPTF), which works to establish a dialogue between key public and private stakeholders to improve coffee farmer income.
 
According to a joint press release, IDH will provide financial and human resources to support CPPTF, with the organisations co-facilitating the fourth Global Coffee Leaders Forum and working with the Colombian Coffee Growers Federation’s (FNC) Living Income and Prosperity and the Sustainable Development Goals (SDGs).
 
Swathes of coffee producers around the world live far below recognised living income standards, even as coffee continues to be a highly profitable product in consuming markets.
 
Despite global coffee prices reaching a ten-year high, the ICO and IDH highlight that 80% of Colombian coffee farmers earn less than a living income, with 73% living below the poverty line despite well-organized support for the coffee sector by the Colombian government.
 
Poor farmer profitability is also detrimental for the entire coffee industry, the ICO and IDH added, with a key objective to strengthen the global coffee sector and promote sustainable economic, social, and environmental development.
 
“Steep rises in price are often an anomaly with farmers holding the bill afterward. When adjusted for inflation, the market price for green coffee has declined over the last twenty years even as costs of production continue to rise” said José Sette, ICO Executive Director.
 
“This wide-ranging partnership will increase movement towards living incomes affording farmers decent livelihoods and the ability to deal with volatile markets.”
 
Volatile commodity coffee prices continue to prevent coffee farmers around the world from making living income, with many abandoning coffee altogether to grow more profitable crops.
 
A 2018 study conducted by pioneering coffee trader Caravela Coffee found global commidity coffee prices (c-price) often fail to cover the cost of coffee production in Colombia, Ecuador, Nicaragua, Peru, Guatemala and El Salvador.

At the time of the study, four out of five of the countries experienced a negative profit margin ranging from -1.7% in Colombia to -38.7% in Ecuador. Only Nicaragua generated a positive profit margin of 11.4%.