New Fairtrade Prices will help Farmers facing economic and climate woes
To further protect coffee farmers and their families against price volatility, Fairtrade Canada is adjusting its prices on August 1st to counter global economic instability, cost increases and the intensifying impacts of climate change.
The Fairtrade Minimum Price
The Fairtrade Minimum Price is critical for coffee farmers as it cushions them from the unpredictable fluctuations they face on the coffee market. However, the situation farmers endure globally due to financial hardships and climate change remains unsustainable and puts the entire future of coffee at risk. For this reason, the Fairtrade minimum price will now be US$1.80. The Fairtrade premium, meanwhile, will remain at US$0.20 and the organic differential will increase by US$0.10, for a new price of US$0.40.
As we were able to see for ourselves during our last fieldtrip to Guatemala, climate change brings many challenges for producers who must adjust their practices. The rain season and temperature variations cause harvest to be much less uniform than in the past.
What's more, the costs related to production, be it infrastructure, transportation, fertilizers, have increased considerably. The demand for labor is also strongly affected, not to mention the challenges linked to the migration crisis. The price increase therefore reflects these issues, which are now more present than ever.
In regular specialty coffees, premiums are also on the rise for the same reasons. Green coffee (not roasted) is a market commodity for structuring trade. At the stock market price, there is always a quality premium. It is with this premium that farmers and mills manage to incorporate the additional costs linked to inflation as well as to labor. By increasing the Fairtrade Minimum Price, it is possible to provide a safety net for farmers in case of low market prices and ensuring that they do not subsidize the coffee industry by receiving remuneration lower than the production costs of their product.
To learn more about the impact of climate change at the origin, watch our video on the subject.