More Information: Coffee Industry

The livelihoods of more than 25 million people in the tropics depend on growing coffee, mostly for export to the U.S. and other rich countries.  Many coffee workers and farmers do not earn enough to escape poverty.

In Guatemala, for example, coffee employs more workers than any other sector and is the single most important economic activity.  The low wages in the coffee sector are a major contributor to high malnutrition rates in Guatemala.

Coffee farms vary greatly between countries.  In some countries, coffee is produced primarily on small holdings by family farmers.  In other countries, coffee production is dominated by medium and large-scale plantations that employ hundreds of workers, and more during the harvest season.  In Guatemala, for example, most coffee is produced on plantations, even though Guatemala also has thousands of small coffee farms.

Coffee Industry Crisis

The coffee industry, like many commodities, has long been characterized by sharp fluctuations in price and supply.

World coffee prices sank to historic lows at the end of 2001, prompting many coffee farmers in Central America to abandon production, forcing thousands of coffee workers out of jobs.  Many emigrated north looking for work

The crisis continued through 2003 and eased somewhat in 2004 and 2005.  Price recovery, however, does not usually lead to an improvement in wages and working conditions.

In 2002, Oxfam America launched an initiative calling for a global program to stabilize coffee productions and prices, as part of a comprehensive proposal to address the needs of farmers and workers.

Fair Trade Coffee and Other Certification Schemes

Given the importance of coffee to so many countries in the South, coffee was one of the first commodities to become “fair trade” certified. 

"Fair trade" coffee guarantees small farmers and cooperatives a minimum price for their coffee.  "Fair trade" currently does not apply to coffee plantations.

"Fair trade" initiatives support small coffee farmers and cooperatives.  They are complementary to efforts to improve conditions for workers on medium and large-scale plantations. 

"Fair trade" is especially important in countries where small farmers dominate the coffee sector.   In countries like Guatemala where most coffee is produced on medium and large-scale plantations, initiatives to support workers on plantations, like the USLEAP initiative with Starbucks, are especially important.

Other initiatives intended to address conditions in the coffee sector include a Rainforest Alliance certification program and a broad-based effort called the Common Code for the Coffee Community.