Sustaining the coffee world

- Last updated on GMT

Related tags: World bank, Trade

As trading nations get to grips with globalisation in the 21st
century the issue of sustainability is increasingly compounded for
commodities on today's market. Nowhere is this more evident than
for coffee - arguably one of the the world's most important cash
crops and vital to the livelihood of more than 25 million small
coffee farmers. The World Bank examines the state of play.

As trading nations get to grips with globalisation in the 21st century the issue of sustainability is increasingly compounded for commodities on today's market.

Nowhere is this more evident than for coffee - arguably one of the world's most important cash crops, and vital to the livelihood of more than 25 million small coffee farmers.

After petroleum, coffee is one of the world's most important commodities. This single crop represents more than 20 per cent of export earnings for nine developing countries and accounts for more than half of all export earnings in four countries but the world coffee market is suffering, highlights an extensive report from the World Bank.

The report, which examined characteristics and trends of the sustainable coffee markets in 11 European markets, calls for environmental and social standards, improved governance structures, better communication channels, and price premiums for the coffee market to provide help to nearly a million coffee farmers.

"The striking emergence of dynamic market segments firmly place the coffee industry at the forefront in developing innovative responses that are relevant to the difficulties of rural development and trade in developing countries,"​ said the report's leading author, Daniele Giovannucci, a consultant at the World Bank.

The report makes a claim for stricter guidelines and policies on what can be labelled organic, fair trade, and shade grown - collectively known as sustainable coffees - indicating that this segment of the coffee market is growing significantly but is also in need of policy guidance to ensure that producers continue to benefit.

Although coffees certified to these sustainability standards are not a universal panacea, they represent an increasingly important trend and are being adopted by consumer giants like Procter & Gamble, Ahold and Starbucks, said the report.

The study confirms what supermarkets are already well aware of - that the informed consumer is increasingly turning towards products that are somehow beneficial, whether to health, to the environment or indeed to the farmer, as in the case of Free Trade goods.

"Today, markets for organic, eco-friendly, and fair trade products are measured in the hundreds of millions and even billions of dollars, and are among the fastest-growing segments of the food industry,"​ said Martin Raine, agriculture and rural development sector leader in the World Bank's Latin America and Caribbean Region.

He added that we are now witnessing the striking emergence of dynamic agricultural markets for differentiated products that were only tiny niche opportunities just a few years ago.

Although small - on average less than 2 per cent of consumption in developed markets - the market for sustainable coffees is not only growing, but starting to make a difference.

In 2002 sales of all coffees making credible sustainability claims were in excess of 1.1 million. According to the World Bank​ report, sustainable coffees around the world have already made significant headway towards improving the living conditions of almost a million farming households in the Southern Hemisphere.

Published with the International Institute for Sustainable Development, the International Coffee Organisation and the United Nations Conference on Trade and Development, Giovannucci's report follows on the heels of an earlier similar report he wrote which surveyed the North American market.

Related topics: Market Trends

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