In the UK we drink approximately 95 million cups of coffee per day with supermarket coffee sales soaring since lockdown. We are a nation of coffee lovers but, as with so many commodities, the story behind the product is too often hidden. The coffee industry is one reliant on global supply chains which are too often extractive and exploitative. Last year an investigation by Channel 4’s Dispatches implicated two of the biggest and best-known global coffee brands, discovering evidence of child labour on coffee farms they buy from. It also brought to light the stark reality that out of £2.50 spent on a standard cup of coffee on the high street just 1p goes to the farmer.
After oil, coffee is the most traded commodity in the world and is therefore a central part of global commodity markets. Most coffee farmers sell their crops to powerful brokers who then sell them on, at a profit, to the multinational corporations behind most coffee brands.
It is not however just low pay and poor working conditions that are affecting coffee farmers. 75% of the world’s coffee is grown by smallholder farmers whose livelihoods are being put at risk due to the impact of climate change, even though they are least responsible for global greenhouse gas emissions.
Santiago Paz is the Managing Director of Norandino Cooperative (formerly CEPICAFE) an organisation representing 90 smaller co-operatives consisting of 6,600 members. Based in Sierra Piura in Northern Peru, he has seen the devastating impact climate change is having on coffee production. Peru is one of the top three countries most affected by climate change in the world and the areas of North Peru where Norandino farmers work has seen a dramatic increase in rainfall. Coffee is grown on slopes at an altitude and the increase in rainfall was resulting in soil and nutrients being washed away having a devastating impact on coffee yields. Santiago explains:
“Our coffee farmers are at the epicentre of climate change. In our coffee producing areas there is usually an average rainfall of 800ml a year. But now, as a result of climate change, rainfall in some years is up to 4,000ml – this is an increase of 500%.”
Santiago and the farmers he works with sell their coffee to award-winning social enterprise Cafédirect, an organisation that was a pioneer of the Fairtrade movement and which is set up to take on the exploitation in the coffee industry.
Cafédirect is a social enterprise set up to transform how global market works, buying directly from coffee farmers and cutting out the middleman. It also re-invests a portion of its profits made through the sale of its products to the people who actually grow and pick our coffee. This is done through Producers Direct – a charity led by farmers for farmers, who invest this money in their communities. A quarter of Cafédirect’s board are also made up of growers, ensuring their voice is always heard. These simple yet pioneering changes give more power to farmers and also puts the social enterprise more in touch with what’s happening on the ground enabling it to better support the farmers co-operatives it buys from.
This close relationship with the communities it works with resulted in a ground-breaking project working with the farmers of Norandino to help them mitigate the worst impacts of climate change.
One of the reasons why increased rainfall was having a particularly bad impact on farmers was due to deforestation happening 2000 miles above the coffee farms in the area of Choco, home to subsistence farmers who are reliant on collecting wood both for building but also to keep warm given their settlements are at such high altitude.
Cafédirect helped bring together both the farmers of Norandino and the villagers of Choco, working with NGOs Progressio, JustGreen, Forest Sense and other partners on an ambitious reforestation project for the Sierra Piura region. The aim was for newly planted trees to protect the coffee farms by preventing excessive water reaching them and also to help regulate rainfall.
It was vital for this work to be done in a way that empowered and incentivised producers to manage forests and help them do this across generations. To achieve this Cafédirect came up with a novel and innovative solution – using the global carbon trading markets to support smallholder farmers. The social enterprise became the first ever private organisation to help farmers access this market with farmers receiving a carbon credit for every tonne of carbon captured by newly planted trees. It even paid in advance for the tree seedlings needed to get the project going, committing to pay in advance for 5,092 carbon credits at a total price of around £55,000 over a six year period.
The scheme has been an incredible success bringing together the community in Choco and the coffee farmers of Sierra Piura. For each carbon credit sold, 90% of revenue goes directly to Choco to fund the planting of seedlings providing a new source of income. The coffee farmers benefit from having their crops protected and also through receiving 10% of funds which are used to fund future adaptation projects.
So far around 224 hectares forest has been planted by hand, 464,490 seedlings have been planted (since 2010) and 11,876 carbon credits have been traded on the global stock market (between 2010 and 2018).
On the success of the project, Santiago commented:
“We are very happy, indeed surprised and excited by the results of this project. Without many resources, we have accomplished a lot. I believe, unequivocally, that we are the first small producers’ organisation worldwide to trade in carbon credits.”
Producers Direct also run training hubs called Centres of Excellence that are farmer-led. The reforestation project (called the Sierra Piura Reforestation project) is used as an example to other farmers- and Norandino Cooperative is a Centre of Excellence in Climate Change Adaptation.
With 100 companies responsible for around 71% of global emissions and farmers across the world losing out to extractive multinationals – Cafédirect has shown, through pioneering work like that carried out in Sierra Piura, how social enterprises can not only lead the way in paying fairly but also work with communities to help take on the immense challenges posed by a changing climate. We can all do our part to support businesses like this which put people and planet first through buying social.