Professor Jeffrey Sachs, the world-renowned professor of economics and sustainable development expert, has called for the creation of a Global Coffee Fund to help farmers.
Addressing the Second World Coffee Producers Forum in Campinas, Brazil on 10 July 2019, Professor Sachs said historically low prices for green coffee make a joint effort, led by the leading actors in the industry, necessary.
In his keynote at the conference, Professor Sachs proposed a global fund that would be used to ensure that coffee-growing was sustainable.
He proposed that US$10 billion a year be invested in the fund, with an initial contribution of US$2.5 billion from industry. Another US$2.5 billion would come from public and private contributions.
Without this kind of support, he suggested, coffee farmers would not be able to remain in the sector, farms would be deserted and migration from coffee-growing countries would increase.
Presenting the results of his study, ‘Economic and policy analysis to improve the incomes of small coffee producers,’ Professor Sachs highlighted the fact that Brazil and Vietnam have made important investments in mechanization and productivity and play a key role in determining the international price of coffee. Price levels at the moment are such that they are viable for mechanized producers, he said, but not for farmers using conventional farming practices.
He also highlighted the fact that other producing countries, such as those specialising in washed Arabica, also face limitations, including a lack of investment in science and technology, and the inability to mechanise production on a large scale, which also puts them at a disadvantage.
He cited Colombia as an example.
Professor Sachs also noted that climate change is expected to reduce yields in countries and regions such as Colombia, India, Malaysia and Central America. This will accentuate the risk of deforestation, poverty and inequality in the coffee sector, and increase the industry’s dependence on coffee from Vietnam and Brazil.
Professor Sachs told delegates at the forum that coffee companies such as Nestlé and the JAB account for around 40 per cent of coffee sales worldwide, followed by companies such as Lavazza, JM Smucker, Kraft Heinz and Tchibo.