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Future of coffee is tied to income for farmers: study

Beans in handFairtrade is calling for a government and industry-wide response to its study into the economics of coffee production so that coffee farmers can earn a decent income and support their families.

The report by Fairtrade and True Price is one of the most detailed studies into coffee farmer income to date.

Covering farmers in Rwanda, Tanzania, Uganda, Kenya, India, Indonesia and Vietnam, the research sheds light on how much coffee farmers actually earn and Fairtrade’s potential impact on their household income.

A highly competitive coffee market, speculation on futures markets and low Fairtrade sales for farmers are key contributing factors.

The study found that low income from coffee, in turn, leads to a lack of investment at the farm level and even lower yields, perpetuating a cycle of poverty.

The study reveals that for many farmers, coffee is just one source of income and their dependence on it varies greatly.

On average about 50 per cent of household income results from coffee production.

However results differed between countries: Farmers in Indonesia rely heavily on income from coffee for example, whereas Kenyan farmers mainly earn a living from sales of other farm goods or other employment away from the farm.

Indonesian and Vietnamese farmers have the highest farmer household incomes, mainly due to high income from coffee in these countries.

Furthermore, only Indonesian farmers currently earn a living household income from coffee production alone.

“Although overall household income depends very much on the local context and on factors such as productivity or farm size, a higher coffee price is one key enabler for households to earn a living income. It is important that, besides addressing factors such as productivity or efficiency, stakeholders in the coffee sector put the pricing question high on their agenda,” said Dario Soto-Abril, Fairtrade International’s Global CEO.

This pilot study will inform Fairtrade’s living income strategy, building on the work they are already doing on living wages for workers on Fairtrade plantations.

Fairtrade’s activities include market development, supporting diversification into other crops, and improving yields and farm efficiency.

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