Answers For Coffee farmers

A. Vitelio Menza has been dependent on the coffee he grows in Colombia all his life. At 48, he still struggles to provide for his family. Like millions of other smallholders, his fortunes and those of his wife, Maria Enith, and their four children have fluctuated dramatically along with the price he receives for his crop. 

B. Over the years the family has suffered illness brought on by malnutrition. 1-8In other parts of the same area, some have turned to growing drugs in order to survive; higher prices are paid for coca leaf (the raw material for cocaine). The Menzas have stayed loyal to the coffee crop but not without great personal sacrifices.

C. Coffee is grown in more than 50 countries in a band around the equator and provides a living for more than 20 million farmers. Altogether, up to 100 million people worldwide are involved in the growing, processing, trading and retailing of the product. 

D. 2Coffee is the second most valuable commodity after crude oil. It is the most valuable agricultural commodity in world trade - in 2000, exports worldwide totalled $8.7bn. But the journey from the Menzas' farm in Colombia to the supermarket shelf is a long and tortuous one with a succession of people taking their cut along the way. 

E. From tree to supermarket shelf it has been estimated the Menzas' coffee beans can change hands as many as 150 times. Paper transactions on international commodities markets account for much of this. 4The final price of a cup of coffee in the West will have absorbed the costs of insurance, taxes, transportation, processing, packaging, marketing, storage and much more. Of the £1.75 charged for a cappuccino in a London coffee shop, the grower will be lucky to receive the equivalent of 5p. 

F. Between 1994 and the end of 2001 the price of robusta beans (used chiefly in instant coffee) plummeted from around 180 cents to just 17 cents per pound, a 30-year low. The value of high-quality arabica beans has suffered similarly. While it is estimated that the world coffee trade generates $60bn in revenues, double the amount in the 1980s, producing countries retainjust over 10 per cent of this, compared with 30 per cent in the 1980s. 

G. For the big roasters, this can be only good news: it is estimated that a company processing one million 60kg bags of coffee was $80m better off in 2001 than the previous year because of the lower prices. For small farmers, however, the drop in prices is disastrous.

H. 5-9When world prices fall, growers suffer an immediate reduction in income; yet there is no noticeable reduction in supermarket prices of coffee. In contrast, when the market price of coffee gains, as it did by 50 per cent in 1994, for example, retail prices rise promptly. 

I. For many farmers, the collapse in prices means that they have failed to recover their production costs for several years running. This has had a devastating impact on an already precarious existence. Some have abandoned their land and gone in search of work in cities. Others have neglected or uprooted their coffee bushes. Frequently, an equally uncertain and poverty-stricken life awaits in urban shanty towns, 10but without the support of community and land. For those who opt to stay at home, the lack of labour for crop maintenance reduces the quality and value of the coffee, further depressing returns. The vicious circle is complete.

J. But for small farmers the price of beans on the markets in New York and London is only one of the factors undermining their ability to make a reasonable living. 11Without the means to process or transport their crop to market, limited knowledge of the frequently changing world price and a debt driven necessity to sell their coffee the moment it is ripe (when prices are lowest), small independent farmers find themselves in a weak negotiating position. They are prey to local dealers who buy the coffee and sell it on to international markets. 12With only one major harvest a year, farmers are desperate for cash by the time their crop is ripe and are keen to sell at whatever price they can get. Not surprisingly, local dealers exploit this. 

K. 13The farmers' need for a quick sale is a symptom of their inability to get loans at a fair rate from banks, pushing them into the arms of loan sharks to pay for fertilizers, harvest labour and basic living costs prior to harvest. 6Many growers have joined with their neighbours to set up co-operative marketing ventures, which enable them to by-pass the middlemen. All too often, however, even the co-op cannot get finance to buy the crop, and members still sell to local traders (commonly called coyotes in Latin America) for cash, rather than wait for a better price. Evidence of low and declining living standards is clear. 7-14Producers have reported to the Fairtrade Foundation reduced spending on housing, children's education (especially where structural adjustment has led to higher school fees), health and food.

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