COFFEE PRICES - IS PAYING FARMERS MORE THE ANSWER?
In July 2019 Fairtrade International wrote an article titled "There is only one way out of the global coffee crisis... Pay more." I remember reading it at the time and thinking it had a rather simplistic view of the problem. Of course - pay more for your coffee and farmers lives would improve! Can it be so simple? I think the problem requires a bit more thought and a look at some basic economic theory. In this article, we're going to argue that the overall negative impact is as much from price volatility as it is from the price level itself. In October 2019, the Olam Coffee CEO wrote an article, then picked up by the Financial Times about the need for price stability. The FT wrote " the small price premiums on sustainable and certified coffee fails to alleviate the problems arising from price volatility." and Olam's Coffee CEO called for a "Price Stabilisation Fund". Read the full article
