Circular Coffee Fund: Is it the first coffee fund?
Are you one of those thousands of people out there who feels frustrated about injustices in the coffee value chain?
Do you know for how long coffee farmers are expecting compensatory measures that help them in their sustainability path?
Coffee producers are among of the main actors concerned and affected by the unequal relations within the global coffee value chain, which you may help to reproduce or not, according to your everyday morning coffee. Since the decade of 1990 coffee producers worldwide have been facing an increase in production costs and a radical decrease in green coffee prices, pushing them to their limits, jeopardizing their life and the life of their families. In some coffee producer countries falling coffee prices have accelerated migration to poor urban areas and soil degradation –due to replacement of coffee agroforestry systems for cattle pastures, or crop monocultures. Climate change, increase in pests and diseases have only worsened the situation. Farmers cannot face the situation alone anymore.
It is evident that conventional coffee supply chain is taking a big chunk of responsibility for this situation; however, no much is changing on it. Specialty coffees have appeared around 2000 under the SCA, bringing together a large group of people interested in improving the coffee sector in different dimensions, from encouraging ecological coffee practices in origin countries to the best quality coffee in the final cup. Specialty coffees count with some of the most well-known labels, or third-party certifications, such as organic and fair trade. Some brands have also their own sustainable label or sustainability plan.
While specialty coffees are in fact re-directing coffee production and consumption towards more sustainable practices, there are still many moves that need to be done. Since some years ago, initiatives aiming at improvement in the coffee sector have aroused at a more global scale. The Global Coffee Platform (GCP) gathers different stakeholders to take action towards more sustainable practices, safeguarding the interests of producers and buyers. The Sustainable Coffee Challenge is another initiative aiming for similar goals, but it is steered mainly from big coffee corporations. These enterprises promise to bring some improvements to the coffee sector.
Besides these groups of action, in the past, there have been some attempts to develop coffee funds that could benefit farmers directly through ecological improvements. In 2004, Walter Zwald, a coffee buyer and consultant based in Switzerland who was in the board of the European Coffee Federation tried to raise the topic of the need of creating a Worldwide Sustainable Coffee Fund. His aim was to invest in sustainability, through environmentally friendly practices promoted among producers; and in marketing through broadening the consumption in consumer and producer countries. The proposal was that coffee roasters contribute to the fund with US$ 1 per 60 kg bag of green coffee processed (between 1 and 2% of the purchase price by then). The project was presented to diverse international organizations, such as International Coffee Organization (ICO), European Coffee Federation (ECF), National Coffee Association of America (NCA), and Transparency International; but there is no new information about it since 2005.
A couple of years ago, professor Jeffrey Sachs, a respectable economist, from the Columbia Center on Sustainable Investment was commissioned by the World Coffee Producers Forum, led by the Colombian Coffee Federation, for conducting the study: “Ensuring Economic Viability and Sustainability of Coffee Production”. After extensive research on the challenges that coffee growers worldwide will face in the coming years, Sachs recommends that it is necessary to create a Global Coffee Fund (GCF) to alleviate coffee producers and share the risks for coffee production. The GCP is suggested as a key actor who could lead a multi-stakeholder governing board and Sustainable Development Goals (SDG) are meant to be targeted. The proposal is quite ambitious. It is based on $10 billion per year; from which $2.5 billion are expected from the industry, donors and governments to kick start the fund. So far, there aren’t new posts on the advances.
In the Netherlands, in particular, in November 2019 a joint public-private initiative was launched supported by the RVO (Netherlands Enterprise Agency) in collaboration with Solidaridad, Jacobs Douwe Egbert (JDE) and from Perú with the National Forestry Division (SERFOR) and the association of small producers Cuencas del Huallaga. This is a 4-year action plan (2019-2023) worth 3 million euros. Half of the funding is financed by the RVO, framed under a SDG Partnership and the other half should be financed by the other partners. The project aims to train 1,600 farmers on circular coffee practices on farming and managing of waste material in Peru. Land permits from the government will also be mobilized to plant coffee in agroforestry systems in commons. The last part of the project is the creation of a coffee fund. The idea is to make profit converting the used coffee grind in the Netherlands to construction materials for furniture. Then the profit will be used as an agricultural loan for the coffee farmers. According to its website, the project was “temporarily closed” until some weeks ago.
Then what all these big projects have in common?
It seems that all of them have tried to contribute to the sustainability of the coffee chain. However, sometimes taking action at a more localized or focused level could lead to satisfactory results quicker and forging long-lasting face-to-face relationships, beyond international cooperation narratives such as development, which are very often based on anonymous relations and subjected to a limited time-frame, or political willingness.
Here is where we introduce the Circular Coffee Fund! An independent alternative fund working hand-to-hand with coffee farmers we know, having achievable goals to improve ecological resource management in origin countries. All this in accordance with farmers’ decisions on how to implement changes at their properties… farmers decide how and which improvements they want to make.
“... will the coffee sector undertake strong concerted efforts to support a more sustainable and resilient future for producers and the sector overall?” ”
Big steps for coffee farmers could originate from small changes from your side, such as supporting the use of reusable cups. So what are you waiting for?
Do you want to know more? Click here, to know how to get involved!