The Coffee Price Crisis

A primer on the crisis affecting the coffee industry and the SCA’s initiative to address it.

The Coffee Price Crisis Response Initiative (PCR) was launched by the SCA in December 2018, aimed at understanding and addressing the price crisis affecting coffee. After more than a year of research and work, the initiative has published a report with recommendations for the coffee sector. The initiative intentionally focused on identifying interventions with the most potential for long-term, systemic change, rather than a short-term fix.

Identifying inequitable value distribution as a key root cause, the PCR Summary of Work highlights opportunities to work towards a more equitable specialty coffee industry. This includes shifts in the balance of ownership, finance, risk distribution, information access, and governance, in the form of five recommendations.

Key PCR Outputs

A group of dedicated staff and volunteers from around the globe formed the SCA’s Price Crisis Response (PCR) team. Learn about the outputs of that work below.

Recommendations:

Following the desk research, stakeholder interviews, industry gatherings, learnings from our peer review process, and countless hours of discussion among the group, the PCR summary of work includes a series of recommendations, selected for their strong potential to foment long-term change in the coffee sector.

Each recommendation encompasses years of work ahead, across multiple projects, organizations, and platforms.

1. Create more equitable and distributive models of governance (decision-making power) by pursuing new models of governance, resisting the hegemony of buyers, reimagining antitrust policies to protect smallholders, and strengthening producer institutions.

2. Enable equitable information sharing (access) by promoting and supporting new models and tools for trading practices, improving producers’ access to market information and bargaining power, and developing two-way transparency to support producer-consumer trust.

3. Pursue equitable risk distribution by redistributing the burden/risk of climate shocks across the value chain, supporting the development of price risk management tools and training directed at growers, and supporting the diversification of options for farmers in non-viable coffee-producing communities.

4. Produce a collective mindset shift within the specialty sector by interpreting the coffee system as a complex value network rather than a linear supply chain, by defining “specialty coffee” to include sustainability in addition to taste/quality, and supporting education on the creation and sharing of value.

5. Support equitable distribution of finance and ownership by establishing new pricing norms based on dignified incomes, promoting “share of value” obtained by producers as a key differentiator and selling point, recognizing farmers’ value creation through irreplaceable service of cultivating the material upon which the whole sector depends, and encouraging business models where producers maintain ownership rights to the coffee at all stages of the value chain to ensure producers receive rewards commensurate to the rewards of brand owners.

The PCR Summary of Work goes in-depth about ways of implementing each recommendation, as well as identifying specific goals, barriers to these goals, and strategies to overcome the barriers.

Read, Watch, and Listen

Click below to find webinars, videos, podcasts, and articles on the price crisis and farm profitability. This content is delivered by coffee professionals from around the world and is an excellent source of information for the latest on issues affecting our industry. For our full library of content, click the yellow button below the thumbnails.

2019 Additional Resources

Get Involved

Would you like to get involved in the work of the SCA’s Price Crisis Response team? We’re looking for coffee professionals to provide input on the report to be released at the end of 2019. Get in touch by submitting a message to our staff below.