The baseline price for arabica and robusta coffee will increase by 29% and 19% respectively to help farmers with rising inflation and climate change adaption costs
Smallholder farmers are responsible for 60% of global coffee production | Photo credit: Clint McKoy
Fairtrade International will raise its Minimum Price for coffee as it seeks to offer a ‘safety net’ for coffee farmers grappling with high inflation, rising production costs and erratic market prices.
From 1 August 2023, the new Fairtrade baseline price for arabica coffee, which represents more than 80% of all Fairtrade coffee sold, will increase 29% to $1.80 per pound.
For robusta, the price will rise 19% to $1.20 per pound.
The additional price of organic Fairtrade coffee will increase 33%, from $0.30 to $0.40 per pound. More than half of Fairtrade coffee sold in 2021 were organic certified.
The increase provides coffee farmers and their cooperatives a pricing safety net while ‘leaving the door open’ for them to earn more when market prices are above the Fairtrade Minimum Price, said Monika Firl, Senior Manager for Coffee at Fairtrade International
“Despite the recent spikes in global coffee prices, coffee farmers are struggling with inflation, skyrocketing production costs, and crop loss due to the effects of climate change. Many coffee farmers are abandoning their farms in search of opportunities elsewhere and young people today in coffee-growing communities struggle to see a future in coffee. The fact that farmers cannot make a living in coffee is a tragic commentary for the industry and a huge risk for the future of the global coffee sector as a whole,” said Firl added.
To achieve the new Minimum Price, Fairtrade conducted a cost of production analysis as well as a three-month consultation process with key stakeholders. More than 540 participants – 86% of whom were farmers – from 40 countries provided inputs resulting in Fairtrade’s proposal to the Fairtrade Standards Committee and the decision to raise the Minimum Price.
Fairtrade International’s global coffee network comprises nearly 900,000 certified coffee farmers across 31 countries.
According to data cited by Fairtrade International, smallholder farmers are responsible for 60% of global coffee production. However, approximately half are living in poverty and nearly a quarter live in extreme poverty.