Executive director José Sette closed the International Coffee Organization’s (ICO) first CEO and Global Leaders Forum pleased at the signing of a “concrete, time-bound action plan” developed with the private sector.
“We do not want nice words on a piece of paper, we must transform this into practical action,” he said. His comments were followed by strong endorsements of the “London Declaration” by representatives from producing countries including Brazil, Colombia, and Vietnam.
The document summarizes a months-long effort to develop a roadmap for sustainability, financing, price volatility, investment, and governance. Adoption by ICO and the private sector commits both to take immediate action.
ICO consulted with 80 different experts and executives representing illycaffè, Jacobs Douwe Egberts (JDE), Lavazza, Nestlé, Melitta, Mercon Coffee Corp, Neumann Kaffee Gruppe, Olam, Starbucks, Sucafina, Strauss, Tchibo, and Volcafe at events that drew 2,000 attendees. All were motivated by the dramatic fall in coffee prices that have declined 30% in the past three years. This has created a genuine crisis in several producing countries where growers are unable to meet the cost of coffee production. The most acute impact is in Central America where forced migration is underway and in Africa where growers are rioting at local washing stations, but Brazil and Colombia and even Vietnam are all experiencing increasing discomfort.
In contrast, coffee buyers are benefitting from a growing global middle class seeking premium coffee. Consumption has steadily increased by an average of 2.2% in the past two decades, a cumulative increase of 65%. Farmers have increased production by 50%, earning $20 billion a year exporting their crop, but retain less than 10% of the retail price at origin (growers earn about $0.01 of a $3 cup).
Last year the International Coffee Council (ICC) that governs ICO approved Resolution 465 to address the impact of low prices on the livelihood of producers, beginning with a meaningful dialogue among all stakeholders. Sette told forum delegates their presence demonstrated the strengthening of ties between the government ministers who make up the ICC and the international roasting community.
The five-page declaration, which can be viewed at www.ico.org, elevates the ICO to a more visible echelon marked by activities that include the #coffeepledge a public campaign to gather one million signatures in support of a living income for coffee farmers by Oct. 1.
ICO’s Coffee Development Report 2019 was a major endeavor despite serious budget constraints that followed the US withdrawal from ICO. Sette reports that ICO’s budget was reduced from $4 million in 2011/12 to $3.3 million in 2018/19 leading to layoffs as the staff was trimmed from 28 to 14.
The private sector has rallied to make up for the shortfall. ICO’s International Coffee Day campaign, for example, is funded through a voluntary contribution by the All Japan Coffee Association.
“We all agree on the agenda and are convinced consumers will accept this change in paradigm,” said the European Union’s delegate.
Sette announced a follow-on meeting in Bangalore, India in September 2020.