Starbucks commits US$20 million to assist farmers impacted by price crisis

On 25 September, Starbucks announced a commitment of up to US$20 million to temporarily relieve impacted smallholder farmers until the coffee market self-corrects and rises above the cost of production. “A majority of the coffee we purchase comes from smallholder farmers and the coffee crisis in Central America related to low prices cannot be ignored,” says Michelle Burns, Senior Vice President, Global Coffee and Tea. “We have a role and responsibility in helping smallholder farmers sustain their livelihoods. Their success will help ensure the long-term health of coffee productivity.” These funds will go directly to smallholder farmers in Nicaragua, Guatemala, Mexico and El Salvador to subsidise farmer income during the upcoming harvest season in Central America. Recently, the international price of coffee fell below the threshold of US$1 per pound, jeopardising the livelihood of 25 million coffee farmers. “We have been severely affected by the recent price decline in the futures market. With today’s prices I can’t invest in my farm. In fact, I can barely cover labour costs. With these prices, my farm is just not profitable,” says Pedro Rosales Ubeda, Owner of Villa Nueva farm in Nicaragua. “Through Starbucks’ initiative I could receive a higher price for my coffee, cover my expenses and make a profit. This means I could provide better conditions to coffee pickers and their families. Also, this will allow me to invest more in my farm, be more productive and offer a better-quality coffee.”
The National Coffee Association (NCA) commends Starbucks for this important initiative to support coffee farmers. “[It] is especially timely given that a rising supply of coffee has been impacting prices,” NCA President and CEO Bill Murray says. Related stories International Coffee Council brings attention to price crisis El Salvador leverages online platform to avert impact of price crisis ICO report shows lowest prices since 2013 FNC calls for action on falling coffee prices Specialty Coffee Association of America Executive Director Ric Rhinehart has seen firsthand the effects of these historically low coffee prices on smallholder farmers. “It will be through the strong support of the coffee industry and its leading companies, large and small, that we can set the stage for a viable coffee future, letting the farmers know their investment cost in upcoming crops will be compensated, providing them with much needed stability in the industry.”

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