Reflecting on 25 Years of Fairtrade

01st October 2019

Cafédirect was set up as a mission led business to deliver impact for smallholder
farmers worldwide. We were the first Fairtrade certified coffee company in 1994 and
chose Fairtrade as it supported our direct trade model and mission to support growers
against the volatility of the coffee price.

Shockingly, the coffee price has decreased to similar levels to when Cafédirect first
started out. The current price paid for coffee is around $1 per pound whereas the cost of
production is between $1.05 – 1.40 per pound. This means that growers are struggling
to cover the cost of production and what’s worse is that growers are having to borrow
money at high levels of interest causing unmanageable debt. In some cases, farmers
are mortgaging their farms or leaving them altogether. Other farmers are managing by
choosing not to grow coffee anymore and instead of focusing on profitable crops such
as avocados, often at the expense of their own land and well-being.
With this huge amount of pressure placed on farmers, surviving day to day becomes
their main focus. As 70% of the world’s food is grown by smallholder farmers and the
average age of a smallholder farmer is 60 years old, our agricultural system is
unsustainable.

Fairtrade provides a critical safety net for the growers we work with, as it ensures that
they receive the Fairtrade Minimum price regardless of the stock market commodity
price. In addition to the Fairtrade Minimum Price, as part of Fairtrade terms, we also pay
a Premium of $0.20 per lb which the co-operatives use to both improve production
techniques (to increase quality and yields) and also to invest in their communities.
When Matt, Cafédirect’s coffee buyer visited Huadquiña Cooperative earlier this year,
he saw first-hand how the Fairtrade premiums were being used to support coffee quality
training and innovative fermentation techniques; which all contributes to producing
better coffee and selling the coffee at higher prices.

From when we were first Fairtrade certified, we have contributed an additional £14
million through Fairtrade Premiums. This has supported smallholder farmers to improve
production techniques, invest in their communities and plan for their futures.
There’s still a lot more to do, which is why Cafédirect invests up to 50% of its profits into
Producers Direct, a grower-led charity that provides practical support to other growers
at origin. Producers Direct also provides support and leadership on other issues
affecting growers including climate change adaptation projects; gender equality
participation training and roles to encourage young people to stay in rural communities
to support ageing smallholder farmers.

Over the next ten years, we plan to be ambitious in supporting systemic change within the
coffee industry and using our business model as a force for good. We will be releasing
our updated strategy next year and welcome our supporters, shareholders and coffee
lovers to join us in empowering and valuing the growers that produce the drinks we
love.

 

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