The emergence of significant new markets for organic and "fairly traded"
products has been hailed as an important part of the effort to address the
chronic poverty suffered by many small-scale coffee producers in the
developing world. With 20-25 million producers around the world suffering
from a prolonged crash in coffee prices, the premiums in these niche markets
may offer a way out of crisis.
A new study of Mexican organic and Fair Trade coffee markets offers both
hope and caution for these new market-based responses to the coffee crisis.
In their new report, "Revaluing Peasant Coffee Production: Organic and Fair
Trade Markets in Mexico," researchers Muriel Calo and Timothy A. Wise, find
that:
* Organic coffee premiums are too low to adequately cover the 2-3-year
conversion to organic production;
* Fair Trade markets, with their guaranteed prices, can bring
producers to profitability and are playing a crucial role in
cross-subsidizing the conversion to organic production;
* Even for producers with access to niche markets, coffee prices alone
still fail to compensate producers for their labor and their social and
environmental contributions.
* Only a minority of producers are likely to gain access to niche
markets, so government intervention in international coffee markets will be
crucial to solving the coffee crisis.
While the study suggests that niche markets alone are unlikely to provide a
comprehensive solution to the coffee price crisis, they have an important
role to play in promoting more sustainable livelihoods and in beginning to
revalue the environmental, economic, and cultural contributions of
small-scale farmers in an increasingly global economy.
"Revaluing Peasant Coffee Production: Organic and Fair Trade Markets in
Mexico" is available online at:
http://www.ase.tufts.edu/gdae/Pubs/rp/RevaluingCoffee05.pdf
For more on GDAE's Globalization and Sustainable Development Program:
httpGDAE
