Global Coffee Platform completes study on Brazilian coffee income

GCP brazil

Global Coffee Platform shares the finding from its study on living income in Brazilian coffee production.

Climate change, vulnerability of food systems, and poverty are just some of the challenges society faces globally. The Global Coffee Platform (GCP) Collective Action Initiative on Social Well-Being recognises these challenges, and although there are numerous analyses about Brazilian agriculture, the initiative aims to gain a better understanding of coffee growers’ income in the country.

“The initiative, created and co-coordinated by GCP Brazil, the Brazilian Coffee Exporters Council (Cecafé) and by the PACTO Institute for the Eradication of Slave Work (InPACTO), seeks to improve the living and working conditions of coffee growers and workers, especially smallholders. Learning about families’ income represents a possibility of formulating policies and actions to strengthen the forces that prioritise living income,” says Pedro Ronca, GCP Brazil Director.

The initiative has implemented a living income study in the coffee producing regions of Minas Gerais and Espirito Santo to discover whether Brazilian coffee farmers earn a living income. The study was conducted between January 2020 and June 2021.

“Minas Gerais and Espirito Santo were the regions chosen to conduct the study as they are the two biggest coffee producing states in Brazil, accounting for 65 per cent of domestic Arabica coffee production and 68 per cent of domestic Robusta production, respectively,” says Ronca.

“This living income report is the first step to understand coffee growers’ income in Brazil. The study findings will help to better understand the reality of the different coffee areas. It focuses on promoting dialogue, raising awareness, and fostering education about good social practices and labour legislation among coffee growers and workers, field technicians, leaders, and opinion makers. It also concentrates on mapping and monitoring working conditions and social risks, and promoting positive communication.”

The study revolved around coffee growers and suppliers of GCP Members in Brazil. The sampling plan was designed based on growers who had a total area of up to 100 hectares; with the sample stratified per type of coffee (Arabica and Conilon/Robusta) and five strata of property area (0-5, 5-10, 10-20, 20-50, 50-100 hectares).

Referencing the Living Income Community of Practise, GCP defines ‘living income’ as “the net annual income required for a household in a particular place to afford a decent standard of living for all members of that household.”

To determine the coffee grower’s living income, several factors were considered, including the family’s net amount of monthly production (coffee and other crops), cost of production, living costs, other sources of income, and living income benchmarks. The potential household income of these families was then estimated per sample stratum (type of coffee and property area).

GCP Brazil Technical Consultant Eduardo Sampaio says it was challenging to explain to stakeholders of the coffee chain the importance of such a study, since it is generally accepted by the sector that the average coffee grower in Brazil already has a living income.

“The findings show that once growers have access to an enabling environment, which includes technical assistance, technology, credit, growers’ organisation, logistics and market access, they are able to earn a living income,” he says.

“These conclusions however cannot be extrapolated to all coffee growers in Brazil, as the study concentrated in a specific population in the main producing coffee regions.”

According to GCP, the monthly living income for the population of growers with up to 100 hectares was estimated at BRL$23,796 (about US$4725) for the 2020/21 two-year period. The average income gap was estimated at BRL$- 4782 (about US$-950), and the average potential household income was estimated at BRL$28,895 (about US$5737) per month.

“The results of this study suggest that a share of interviewed growers in some areas, particularly those who fit in the family farming category, do not earn a living income. These smallholders depend on earnings not related to the property, such as outside work or governmental aids, to complement the household income,” says Sampaio.

Sampaio says one of the more interesting results of the study was the impact of income diversification.

“Most types of grower income diversification beyond coffee were important or essential to reach the living income, and not only coming from other crops but also from services such as machinery rental and others. Growers below five hectares could only reach the living income by the contribution of income diversification,” he says.

GCP Brazil is using the findings to build its GCP 2.0 Country Plan on Farmer Prosperity, which is aligned with the global GCP 2030 Goal to achieve transformational change on farmers’ prosperity for more than one million coffee farmers in more than 10 countries.

“GCP Brazil will use this to focus on increasing climate resilience, incorporating sustainable regenerative agriculture practices among growers to decrease the impact of climate change,” GCP Brazil Director Ronca says.

“The study sheds a light on local gaps and challenges that affect the living income, and which can help institutions, companies and governments formulate plans to overcome these challenges and support continuous improvement toward prosperity of coffee growers. We believe this living income study is a great source of information to guide development plans for the coffee sector, including public policies and private initiatives.”

GCP is currently developing holistic, entrepreneurial country plans for key coffee origins to define how each can contribute to its shared 2030 Goal.

“While these country plans maintain an ultimate focus on improving farmers’ livelihoods – using the milestone of closing the living income gap by at least 25 per cent to measure our progress – they address all three pillars of sustainability. This includes a strong emphasis on ‘ensuring climate adaption and mitigation’ as a key element for sustainable coffee production,” Ronca says.

GCP says the results of this preliminary work may be used to compare same-size growers in similar contexts in Brazil, taking into consideration the period of the sample. Considering a wider agenda, this may be a reference for the development of long-term, more robust studies, based on a more heterogeneous group of growers and different contexts of market access.

“Through the focused collective action of GCP Members and the initiative partners, we are able to provide the coffee sector with critical viable learnings and insights on living income as milestone towards farmer prosperity, while at the same time ensuring sustainable practices for coffee production,” says GCP Executive Director Annette Pensel. “This work has the potential for long lasting and positive impacts across Brazil’s small coffee growers.”

Pensel adds that GCP Collective Action Initiatives enable companies and organisations to leverage their skills and resources to jointly improve identified sustainability issues for coffee at origin.

“Aligned with local priorities and embedding results in existing structures, this collective investment can achieve much greater efficiency, scope and scale than if each company acted alone,” she says.

“By working with and through GCP, our members can share risks and rewards as they address their shared sustainability business challenges in pre-competitive collaboration. At the same time, GCP shares results and learnings with the coffee sector to scale results for meaningful impact that truly accelerates coffee sustainability.”

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This article was first published in the July/August 2023 edition of Global Coffee Report. Read more HERE.

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