Organic Coffee Crisis?
Food First Backgrounder, Spring 2007, Vol. 13, No. 1
“The Coffee Crisis” used to refer to the disastrous plunge in world coffee prices in the 1980s and 1990s that bankrupted hundreds of thousands of smallholders around the world. The USDA’s National Organic Program (NOP) is now poised to bring us the “Organic Coffee Crisis.” With a breathtaking disregard for transparency, consultation and public debate, the NOP is moving to make it prohibitively expensive and logistically impossible for small-scale organic coffee growers. When combined with Fairtrade coffee, certified organic coffee can now fetch up to $1.51/lb. Though even this price may not completely cover many farmers’ production costs, the Fairtrade-Organic combination has saved many smallholders from total financial ruin.
Until now, official certifiers inspected smallholder “community grower groups” (usually a cooperative), to ensure compliance with organic standards. Inspectors typically tested 20% of the group’s farms to validate farmers’ compliance. This allowed some 300 grower groups in the Global South to obtain organic certification for over 100,000 farmers. This system is very similar to USDA organic food processing audits.
Worldwide, 25 million people earn their livelihoods from coffee farming, supplying an estimated 500 billion cups of coffee to consumers each year. However, the benefits of the coffee trade are not equitably distributed.
Last year, the USDA National Organic Program decertified a coffee cooperative in Mexico after an inspector discovered that the cooperative’s internal control system had failed to detect that one farmer had used pesticides and stored his coffee in used fertilizer bags. After an unsuccessful appeal filed by the Mexican cooperative, on October 27, 2006, not only did the USDA decertify that cooperative–based on a legal reading by USDA administrative law judges–USDA decided to abandon the grower group certification process altogether by unilaterally declaring that, “The use of an internal inspection system as a proxy for mandatory on-site inspections of each production unit by the certifying agent is not permitted.”
Now every farmer, no matter how small, must submit to yearly, on-site inspections. Certification inspection visits, often to remote coffee farms, can take three to five days at a cost of $150-$270 a day. There is little likelihood that individual smallholders—who produce the bulk of the world’s organic coffee—can pay this price, or that certifiers can reach all of them.
Organic certification already comes at a high cost for smallholders. Not only do farmers have to invest more labor in weeding, pruning, and organic fertilization, they must first sacrifice three years of farming organically without certification (or the premium) before qualifying. They must also organize in cooperatives under one management and marketing system and maintain a strict, documented, internal control system to make sure all members in the grower group are complying with organic standards and production practices.