WITH COFFEE BROKERS
In a move that could have far-reaching effects on the US and global coffee markets, the environmental group the Rainforest Alliance announced it has signed agreements with the world's two largest coffee trading companies, Neumann Kaffee Gruppe and Volcafe Group. The Rainforest Alliance and these major brokers will ramp up cooperation on meeting rigorous standards for environmentally and socially sustainable coffee production around the world.
The announcement was made at a recent Rainforest Alliance sustainable coffee awards dinner in New York, which brought together coffee growers, traders, roasters and retailers from around the world, each receiving honors for their efforts to incorporate sustainable practices.
Coffee is the second largest commodity trade after oil, and its production involves some 25 million farmers around the world. The Rainforest Alliance Memorandums of Understanding (MOUs) seek sustainability along the entire coffee supply chain "from farm to cup," helping to bridge the gap between certified sustainable coffee farms and consumers around the world.
Traders are an important part of that bridge, connecting farmers to roasters who in turn sell to supermarkets, coffee shops and consumers. Traders help seek out, buy and transfer certified coffee to buyers large and small. Volcafe and Neumann together serve about 25% of the global market, from the smallest to the largest roasters. The MOUs between the Rainforest Alliance and these two major traders cover various forms of cooperation from consulting on best practices and standards in producing countries to co-branding and marketing agreements in consumer markets.
"The MOU between the Rainforest Alliance and Volcafe formally establishes the groundwork for jointly pushing sustainability along the coffee supply chain," said Paul Moeller, CEO of Volcafe Group, as he accepted a Rainforest Alliance sustainability award. "Our subsidiaries in 16 countries are already working with the Rainforest Alliance on implementation and certification of several farms and mills. We have proof that conservation of the coffee belt's biodiversity and business are perfectly compatible."
"The sustainable coffee trend, which reaches into every corner of the consumer world, is the greatest chance coffee has had in many years," said Michael Neumann, Chairman of Neumann Kaffee Gruppe, which co-chaired the Rainforest Alliance sustainable coffee awards dinner. "Let us approach it pre-competitively and cooperatively. Eventually, it will not only remake the difficult lives of innumerable smallholder and commercial farmers and the environment in which they live, but also prove to consumers worldwide that the entire coffee community wishes to act in a truly responsible manner."
On coffee producing farms, closer cooperation and the certified designation will mean more forest preservation and habitat-protecting coffee plantations as opposed to chemical-intensive,
clear-cut, open-field plantations, which produce a higher quantity but inferior quality of coffee. These full-sun plantations quickly become monoculture deserts for local flora and fauna. Sustainability certification also means certified better working and living conditions, healthcare, education and other benefits for coffee workers.
The Rainforest Alliance developed standards for sustainability in collaboration with the Sustainable Agriculture Network (SAN), a coalition of nine leading Latin American conservation groups that the Rainforest Alliance coordinates. The Rainforest Alliance and its partners send out field specialists to consult with farmers on incorporating environmentally and socially sustainable practices. Operations that meet SAN standards may use the Rainforest Alliance seal of approval on their packaging, which helps their products stand out in the marketplace.
Neumann and Volcafe are currently involved in sustainable coffee projects in Costa Rica, the Dominican Republic, Ethiopia, Guatemala, Honduras, Mexico, Nicaragua, Peru and Uganda, with many more under development.
Both Neumann and Volcafe sponsor programs in coffee producing communities as well as research into sustainability issues. Volcafe, for example, is demonstrating coffee farm reforestation methodologies in Costa Rica and Neumann is developing guidelines for sustainable coffee farming in Mexico, which will be applied to other Neumann farming operations in South America and Africa.
Increasingly, stakeholders in the coffee market find that supporting the growth of such sustainable operations is in their own interests, since it helps reverse the trend towards chemical-intensive, full-sun coffee farming that has wrought havoc with the world coffee market in recent years. As oversupply and lower quality products from unsustainable farms hit the market, they help create price volatility which destroys the profit margins and reliable planning horizons all growers need to survive. As a result, many growers -- large and small -- have had to abandon their farms, and revenue from coffee exports worldwide has sharply declined.
Like farmers, coffee traders also feel the pinch of price shifts as coffee is sold by paper investors far from the farms, just like stocks and bonds. But the big trading companies can help growers ride out price volatility by offering services such as bridge financing, helping smallholders aggregate supply and other services.
Beyond the ethical appeal of supporting sustainable coffee farms, providing better quality of life for workers and more habitat for wildlife, competitive advantages of sustainably sourced coffee include consistently higher quality, which is a strong selling point for distributors, roasters and consumers and lends itself to marketing as specialty or gourmet coffee.
But, there are many challenges in helping farmers meet social and environmental standards and in getting certified coffee from the farms to the consumers.
"That's where we come in," said Rainforest Alliance marketing director Sabrina Vigilante. "Our standards help farmers adopt good management practices. And, we offer sustainable growers a strong entrée into the premium markets. When they find buyers who appreciate their product, they not only keep their farms, they have a powerful financial incentive to stay with sustainable techniques. This creates a climate in which sustainable farming techniques catch on, so multinationals who buy in volume are more and more likely to find a sustainable source and less and less likely to support unsustainable practices."
These services help keep ecofriendly coffee growers in business, help reverse the trend towards chemical-intensive industrial-scale production of lower-quality coffee, and actually help place sustainably sourced, higher quality beans in premium markets. In this way the Rainforest Alliance and its partners hope to have a stabilizing effect on a large share of the global coffee market while nudging it in a greener direction.
Written by: The Rainforest Alliance
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