As Catholic Relief Services expands its work with small-holder coffee farmers, we’re learning more and more about the benefits and limitations of certification systems and returning to the question of how to make coffee the means to a sustainable livelihood for coffee farmers. Our fully-committed partners on the CRS Coffee Project demonstrate it is possible to have a direct relationship with coffee cooperatives and negotiate a fair trading terms. However, are the various certification systems, including Fair Trade, that fall under the category of sustainable coffees actually producing a sustainable livelihood for small-holder coffee farmers? Michael Sheridan, former program manager of the CRS Fair Trade program in the U.S. and current Regional Technical Advisor on Livelihoods in CRS’ Latin America and the Caribbean office, tackles this issue in the May 2009 edition of InterAction’s  Monday Developments Magazine.

Thanks to our friends at InterAction for permission to share Michael’s article below:

BEYOND FAIR TRADE: FROM SUSTAINABLE COFFEES TO SUSTAINABLE LIVELIHOODS
Michael Sheridan, May 2009

Fair Trade has been one of the most celebrated concepts in social entrepreneurship over the past decade. Its explosive growth has been fueled in part by the Fair Trade campaigns of InterAction members. At Catholic Relief Services (CRS), we have increasingly invested in Fair Trade and other “sustainable” coffees.  We supported farmer organizations overseas in their efforts to access Fair Trade and organic coffee markets while also promoting the Fair Trade label at home. I was personally involved in these efforts, directing the CRS Fair Trade Program in the U.S. for nearly four years before relocating to Guatemala.

Here, I supervise our CAFE Livelihoods, an $8.2 million project to strengthen farmers’ engagement with high-value coffee markets. We believe Fair Trade and organic certifications represent the best hope for the largest number of farmers to maximize their coffee income, create sustainable grassroots enterprises, and farm in ecologically sustainable ways.

In recent years, however, Fair Trade has been criticized for failing to foster sustainable rural development. The purpose of this piece is not to adjudicate the claims of Fair Trade’s advocates and critics. Instead, I want to focus on three points concerning the ongoing conversation about sustainability in coffee.

First, the debates over the relative merits of Fair Trade and other certifications miss the larger point. None of the competing coffee certifications, either individually or in combination, can ensure truly sustainable smallholder livelihoods. Second, future discussions of coffee sustainability within the industry, development field and
donor community should apply the concept of sustainability to the livelihoods of the smallholder farmers who grow the majority of the world’s coffee. These discussions should center on a holistic vision of sustainability generated on the ground, in coffee growing countries, and not around the narrower standards of certification systems developed in the U.S. and Europe. Finally, the industry, donors and development agencies must invest more in critical issues that lie beyond the coffee chain but threaten the livelihoods of coffee farmers and put the chain itself at risk.

Fair trade and rural livelihoods under pressure
Fair Trade is concerned primarily with improving the terms of trade for smallholder farmers. Over the past decade, it has mitigated price risk and volatility for these farmers by fostering longerterm trading relationships with guaranteed
minimum prices above prevailing market rates. It is a worthy accomplishment. But the primary issue that Fair Trade Certification addresses—unfavorable terms of trade—is only one of the increasing threats to fragile smallholder livelihoods, and not necessarily the most urgent.

Perhaps the most significant limitation of coffee certification schemes in improving smallholder livelihoods concerns
the volume of coffee that smallholders produce. While coffee represents the most significant agricultural activity for most smallholder farmers, it is not the only one. Most also devote a significant portion of their land to other crops. So
even if farmers can sell all their coffee at premium prices— and few are so lucky—the low volume of coffee traded may
limit coffee’s contribution to their overall well-being. And the decreasing size of many small farms due to inheritance and subdivision is only intensifying the pressure on the land and livelihoods.

These vulnerabilities are exacerbated by global shocks like the food price crisis, long-term trends like climate change,
and the constant threat of natural disaster. Collectively, these challenges make smallholder coffee farmers highly susceptible to even the mildest ecological or economic pressure.

In this context, it seems almost unreasonable to expect coffee certification to make much headway. In fact, evidence suggests that even small-scale coffee farmers who sell shadegrown, Fair Trade and organic coffee may be going hungry for as many as four to six months per year.

To cope with economic stress, smallholder farmers turn to short-term strategies that undermine their long-term wellbeing. They buy and eat less food, withdraw children from school, spend less on health care, sell coffee at a fraction of its value, clear-cut forests to sell timber and grow higher-yield crops, take out loans they will struggle to repay, sell
household and productive assets, and leave for longer periods to work elsewhere.

These strategies compromise their future ability to produce large volumes of high-quality coffee. A hungry farmer works less effectively than a well-fed one. A farmer who is away from his fields for months earning money cannot tend to the farm with the care necessary to meet the high quality standards of specialty coffee markets. When capital that should be reinvested in the farm is instead needed to pay interest on a never-ending cycle of debt, productivity declines. Farmers who clear-cut their forests remove the shade that is the foundation of any concept of environmentally friendly coffee. And when desperation finally forces a farmer to sell off land, the availability of coffee is jeopardized. Without investment to address these issues, the gains farmers make through their participation in sustainable coffee markets can be, quite literally, swept away overnight.

Sustainable for whom?
A chain is only as strong as its weakest link, and a sustainable coffee trade must work for all stakeholders in the chain. But today, the entire “sustainable coffee” enterprise is at risk because many smallholder farmers simply do not have livelihoods that are sustainable by any standard. Indicators for “sustainability” in the specialty coffee market are certifications whose standards are set and enforced at the market end of the coffee chain by organizations in the U.S.
and Europe. Meanwhile, at the production end, we see a gap between the reality and the rhetoric of sustainable coffees.
Even some smallholder farmers selling double and triple-certified coffees struggle mightily. The sustainable coffee conversation needs to refocus on coffee origins to address the acute needs of smallholder farmers.

Sustainability 2.0
It is time to expand the concept of sustainability and build on the foundation laid by two generations of sustainability pioneers all along the coffee chain. “Sustainability 2.0” will require new perspectives and non-traditional collaboration among diverse stakeholders.

Development agencies and the donors that fund them will need to couple traditional “development” issues with new disciplines in the field. Too often in the development community we have divorced our work on core issues like food security from narrower, newer pursuits, including the highly specialized technical assistance farmer organizations need to meet the stringent demands of dynamic coffee markets.

For coffee industry actors, this may mean building non-traditional competencies and new investments into their business models to secure supplies of high-quality coffee in competitive markets. Donors and development agencies will need to support the industry in this process and provide expertise in livelihoods issues. We will all need a better understanding of one another’s opportunities and constraints.

The first step, however, is broadening the conversation on sustainable coffees. Leading academics have begun to incorporate livelihoods issues into their analysis of sustainable coffees, but few in the mainstream of the coffee industry, development field or donor community have followed suit. Comprehensive analysis of smallholder farmer livelihoods will reveal potential sources of unsustainability in coffee chains and identify opportunities for new investments beyond them. Sharing examples of successful community-driven interventions that are costeffective
and replicable can help show the way forward.