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Published on 18 June 2024
Our latest study on value, costs and profits’ distribution in the coffee value chain, commissioned by Global Coffee Platform, IDH and Solidaridad Network, revealed on June 18, 2024, show a disconnection between farmer prices and consumer prices.
The net coffee farm income barely increases between ground coffee and expensive capsules sold at a price 4.5 times higher.
Besides, “family labour is undervalued. Labour is the largest share of farm costs for smallholders, but it is often unpaid and unaccounted for – meaning farmers’ ‘margins’ can seem higher than they are which hides the problem”, Solidaridad Network explains.
“Current value distribution makes coffee production economically unviable for most farming families and the planet”
— Annette Pensel, executive director of the Global Coffee Platform
To conduct this research, BASIC used publicly available data from the German coffee market, along with insights from Brazil, Colombia, Ethiopia and Vietnam, to build objective quantitative estimates of the distribution of value, costs, taxes, and net profit margins along coffee value chains.
This was verified through extensive rounds of interviews and consultation with the industry. Though the report begins with the German market, the results are indicative of how value is distributed in other markets.
Photo: Mateo Arteaga / Pexels