Towards a segmented quality coffee market

by George Howell Terroir Coffee Company
and recently published in April 07's edition
of CoffeeTalk

Coffee farmers across the world have faced crisis ever since the Berlin Wall came down in 1989. Just after, the US walked away from the ICO quote agreement established during John F. Kennedy's presidency to help keep Latin America socially and politically stable. Prices collapsed and the market has never recuperated stability since. Today, a large part of the illegal immigration into the US has consisted of coffee farmers and their workers from Mexico and beyond. Throughout Latin America one can see depopulated valleys and abandoned farms. These losses have affected employment throughout their economies. Even though prices have risen in the past two years to somewhat more tenable levels, many farmers cannot find sufficient pickers to harvest their crop. Many of them remain in high debt: costly organic certification programs are a pipe dream. About three out of every five years since the elimination of the quota system have been years where the cost of production in Central America and other producing areas has been at or greater than the market price.

In addition, there is a growing economic chasm between coffee growing areas suited to relatively inexpensive high volume mass production technology - or extreme low-cost labor, as in Vietnam - and areas permanently requiring large pools of human labor in challenging topographies that urgently needs addressing. As technology improves, mass-produced fair-average-quality will improve. Mechanical harvesters are getting faster and more precise; they are able to pass more than once over coffee trees and be more selective in picking. We have already seen a huge drop in production of lower grown prime arabicas in Guatemala and elsewhere. Even higher altitude coffee regions will go the same way, something no quality roaster wishes to contemplate, unless this gap is addressed.

The argument is often brought up that green coffees purchased in the range of Fair Trade prices are unfairly resold roasted, at many multiples higher by roasters in developed countries and that producers should get a larger cut. First-time visiting growers are understandably shocked. Why does it seem no one is around to explain the basic economics of developed countries? Western labor, real estate and others costs, which also go for multiples higher than producer costs, make it impossible not to add a minimum dollar value on top of what is paid for the raw coffee. However, as the price of retail coffee rises over approximately $10 per pound, an ever greater portion should be going to the producer. This is the case with wine. The better values for consumers are to be found in the more expensive bottles, where a greater percentage of the total price goes back to the producer. Consumers are buying what fine coffees there are at bargain basement prices and don't even know it. This is a failure to communicate on our part.
It should be noted that while wine and tea cover a breathtaking range of qualities and prices, from a few dollars to hundreds per unit, forming a real pyramidal quality-price structure, specialty coffee is better represented by a very squat trapezoid. The star-performing exceptions, dollar-wise, might be called insular coffees: they are protected from typical market pressures by being very rare (mostly from small islands, in fact) and having vintage histories: Napoleon's St Helena, Jamaica, and Hawaii,, in descending order of price. No aspersions are meant to be cast on their quality here; but the higher prices which they fetch have nothing to do with qualitative superiority over fine continental origins. Then there is the ultimate insular coffee, Kopi Luac. How ironically reflective of our coffee-romance-culture-trumps-quality is the fact that the one coffee that does go for over $100 a pound comes from the back end of a civet Perhaps what comes with the beans could be served chilled as "specialty" gelato?

What, after all, are we talking about? A twelve-ounce serving at home of a $10 dollar a pound coffee costs less than a can of 12 oz Coke, THE commodity beverage. In fact, for a pound of coffee to equal a 10 dollar "inexpensive" bottle of wine, ounce for ounce, a coffee consumer would have to pay $100 per pound of coffee! Yet we hear some people in the gourmet coffee business, who should know better, grumble when, each year, a handful of tiny exemplary prize-winning micro lots are rewarded with a quarter of such prices. How many consumers have any idea that fine coffee is as difficult and costly to produce as fine wines? The SCAA should be using its powerful annual conventions to wow the media and teach these realities to a thirsty public, gratis. It is in all our interests! We need to extrovert our annual celebration of quality coffee. It cannot be repeated enough: fine coffee at today's prices, brewed at home, is a bargain-basement beverage. For farmers to benefit from the so-called specialty revolution, which most have yet to feel, we need to build above the basement!

The current trapezoid quality-price model needs to be replaced with a fully developed pyramidal structure, with the top qualities commanding world-class prices for farmer and roaster alike. This does not happen overnight. A culture that celebrates exploring exemplary coffee expressions must be created in both consuming and growing countries. Indeed, coffee is a very youthful beverage when compared to wine and tea, both of which have ancient cultures that developed and sustained these products over millennia. Not so with coffee, a newcomer to the world of grand beverages. The technology to process and brew exemplary quality coffee is a product of the twentieth and twenty-first centuries. Espresso and drip coffeemakers are still undergoing improvements that directly enhance the appreciation of fine coffee. It is in our hands to create a coffee culture as the Chinese and Japanese did with tea and as the Middle East and Europe did with wine.

There is a long way to go. The vast majority of coffee farmers with quality potential are still anonymous to the consumer, their coffees buried in blends which only put the roaster in the spotlight, or are lost in mere regional designations. Without real incentives to develop higher levels of quality, they aim for what is acceptable and this in turn fuels more mediocrity. Quality seekers then expend great energy trying to find needles in a haystack. From the farmer perspective the quality buying market is equally meager and tentative. Competition-auctions like Cup of Excellence and the Best of Panama are powerful search engines that put both groups in touch with each other and give unadulterated collective praise in scores, where merited, and later in price within an otherwise remorselessly grey commodity-dominated world where even rewards for miracles, producers are often told, must be "reasonable." Competition-auctions are meant to be the tip of a specialty coffee arrow aimed at encouraging the development of both fragile sides of the quality producer-roaster equation. Both, frankly, are still rare - but growing - perhaps in an accelerating manner. They are certainly inspired.

Visionary roasters, importers and a handful, so far, of exporters, who have participated in and understood the message of Cup of Excellence and Best of Panama have connected with winning farms and coops and are now working with them and others to create tiered qualities. This is the next step. Producers who successfully strive to create the highest possible quality naturally beget multi-tiered qualities in the process, each having its own market and commanding a different price. The pyramid begins.

George Howell is President of Terroir Coffee Company and founder of Cup of Excellence.
For more information on George Howell and Terroir Coffee visit them at http://www.terroircoffee.com

Building a relationship with a winning cup of coffee

June 01, 2007 Edition 1

Cape times Cape Town South Africa

The Cup of Excellence is an annual award which takes place all over world with the best coffee beans going to auction on the internet. Guatemala hosts one of the most prestigious COE events with 120 bags for sale. Two bags of Viviano Jalapa won the toss last year and were nabbed by David Donde and Joel Singer of Origin Coffee Roasting, writes ROBYN COHEN.

"What do you think, take your time …," says David Donde serving up espresso A and espresso B in little glasses with the requisite layering of crema (coffee foam).

One of the espressos is brewed from his stash of the Cup of Excellence Viviano Jalapa which clicks in at R500 a kilo. The other, I am told is Gethumbwini from Kenya and costs about R260 a kilo.

Most espressos at Origin Coffee Roasting cost R9 but, for a Viviano, you are looking at R21 a shot - its most expensive coffee.

"Both coffees are excellent. I don't have average. We are a roastery which happens to also have a coffee shop - not a coffee shop which has a roastery."

"Relationship coffee", is how Donde describes what he and Joel Singer are doing at Origin. "We know where the coffee comes from - the farm, who is responsible."

Grub includes decent-looking sandwiches (R23), salads (R25), cheesecake and muffins (R12 to R18). I munched on a crispy Origin Swirl - which I would describe as a cross between a cinnamon bun, croissant and Jewish boolkah (R13).

The coffee shop part of the business is on the ground floor but they are in the process of bringing in additional roasting apparatus, extending floor space and kitting out another coffee shop on the top floor of this heritage 1903 building, once a tobacco warehouse.

In addition to coffees, Origin Coffee Roasting stocks speciality teas - like a spectacular Chinese tea which begins as little ball and unfurls itself when immersed in hot water (R20 to drink, R12 to buy and make at home).

Some drink on the premises (open from 7am during the week); others take home freshly roasted beans (should be used within two weeks of roasting). Origin also roast for and supply the hospitality industry.

On the Monday morning I was there, the place was humming with laptops and lively chit chat as the suits did their 8am catch-up. A bit like a gentleman's club.

The laptop brigade have been clamouring for wireless internet. Donde hopes his will be up and running when the extension to Origin is complete.

International Paper And Green Mountain Coffee Roasters Honored For Environmentally Friendly Hot Paper Cup

AMonline.com

May 21st, 2007 03:09 PM EDT

International Paper and Green Mountain Coffee Roasters have been awarded a 2007 Sustainability Award from the Specialty Coffee Association of America (SCAA), the world's largest coffee trade association. The sustainability awards are given annually to those in the specialty coffee industry that have created innovative projects to expand and promote sustainability.

The two companies received the award for the category of "Sustainable Business Partnerships Resulting in a Sustainable Product" in honor of their partnership that resulted in the ecotainer(TM) cup -- the first hot paper beverage cup made from fully renewable resources. The ecotainer, which was unveiled last summer, is lined with a bio-plastic derived from corn, making it compostable under the proper conditions.

"We are very excited that our partnership with Green Mountain Coffee is being recognized by the SCAA," said Austin Lance, vice president and general manager of International Paper Foodservice, in a prepared statement. "Finding a partner such as GMCR whose core values align with ours allows us to drive an increased focus on sustainability through industry innovation. We will continue to develop products that reinforce our commitment to environmental stewardship."

Said Paul Comey, vice president, environmental affairs at Green Mountain Coffee Roasters: "We're so pleased to be recognized for bringing this product to market with International Paper. This is a great example of how good business partnerships can make a positive impact on the world and in particular, on the environment, which is the real winner here. This cup is an important step in our continuing efforts to bring new, more sustainable solutions to market."

Each year, Americans use more than 15 billion paper hot cups, and that number is expected to grow to 23 billion by 2010. Conventional hot paper cups use a waterproof lining made from a petroleum-based plastic that is not sustainable. By choosing to utilize a corn-based cup liner, Green Mountain Coffee Roasters alone will conserve the consumption of nearly a quarter of a million pounds of non-renewable petrochemical materials every year.

Wendy's Inks Folgers Coffee Deal In Breakfast Push

By Carolyn Pritchard

SAN FRANCISCO (Dow Jones) - Wendy's International Inc. on Friday said it has inked a deal with Procter & Gamble to sell a custom blend of Folger's coffee, part of the fast-food operator's push to expand its breakfast offerings.

The proprietary blend of Folgers Gourmet Selections coffee, Wendy's (WEN) said, will become a "centerpiece" of its new breakfast menu, which it expects to offer in between 20% and 30% of its North American restaurants by the end of the year.

The deal comes on the heels of expanded breakfast offerings, including coffee upgrades, at rivals McDonald's Corp. (MCD) and Burger King Holdings Inc. (BKC) .

Earlier in the year, Wendy's cited the expansion of its breakfast program as one of the moves underpinning its expectation for a boost in its profit his year and beyond. It forecast full-year per-share earnings of $1.17 to $1.23, with same-store sales rise 3% to 4% in 2007, vs. a less than 1% increase in 2006. Revenue for the period was projected to rise 5% to 6%.

Last month, however, Wendy's said it was exploring strategic options, including its possible sale. The Dublin, Ohio-based company completed its spinoff of Tim Hortons in the third quarter of 2006 and the sale of Baja Fresh Mexican Grill in the fourth quarter.

Shares of Wendy's were off 6 cents in late afternoon trading, at $39.05.

(END) Dow Jones Newswires

05-18-07 1654ET

Copyright (c) 2007 Dow Jones & Company, Inc.

Links in this article:

URL for this article:

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070518-000810-1717

Great coffee, just don't ask where it came from

Townsville, Australia

At $50 a cup, it's been called the world's Number One coffee - but perhaps "Number Two" might be more appropriate.

Luwak coffee, or kopi luwak, is made in Indonesia from beans that have been eaten, partly-digested then excreted by a small, cat-like marsupial called the luwak, or Asian palm civet (paradoxus hermaphroditus).

The excretions, resembling slabs of peanut brittle around 10cm long, are then dried and broken up, cleaned and roasted, the result looking not unlike regular coffee beans.

Increasingly popular in the United States and Japan, the $50 cups of luwak coffee are available in Australia only at the Heritage Tea Rooms in the Hervey Range just west of Townsville, where "everyone calls it cat poo coffee," according to Michelle Sharpe, who runs the cafe with husband Allan.

Perhaps a dozen people a month try out their smooth, sweet brew, which the Sharpes have not yet promoted or advertised since it was first on the menu last November, relying on word-of-mouth.

The cafe's website is currently being updated to include it.

Comments have been "99 per cent favourable," especially because the digestive juices in the luwak's stomach have removed the bitterness associated with some types of normally-processed coffees.

"People who willingly pay the $50 are uplifted by the thrill of the experience," Allan Sharpe says, adding that it's "the world's rarest and most exclusive coffee."

Customers are rewarded with a "certificate of experience" dated and witnessed - just like those presented to people who've climbed the Sydney Harbour Bridge or flown over the Antarctic.

But the less adventurous (or less affluent) often decline to try the luwak coffee, saying "you couldn't pay me to drink that," Michelle went on.

You can brew it yourself!

Gift boxes of luwak coffee also imported from Indonesia include the animal's droppings wrapped in plastic - which the Sharpes say are treated with gamma rays by quarantine officials on arrival in Australia.

The boxes, including 250g of coffee and the droppings encased in plastic, retail at $160.

The coffee is grown in the Indonesian islands of Java, Sulawesi and Sumatra, also in parts of the Philippines, Vietnam and southern India.

Annual world production is believed to be only around 300kg, with a market price of around $US1,000 per kilogram.

Fruit is a favourite food of the luwak, along with insects and small mammals.

The cats, which weight up to 5kg, feast on the ripe coffee berries, and their faeces containing the inner beans are harvested by hand, washed and lightly roasted so as not to affect the complex flavours developed during the processing.

Allan Sharpe recently introduced his luwak coffee to a media lunch in Brisbane.

Peer pressure and the fact that it was free, led to your correspondent gallantly downing a cup of the smooth, dark brown liquid which, as the experts promised, was smoothly pleasant with no bitter after-taste.

No need for the Quickeze - and no subsequent effects later.....

Writers around the world have had some fun with the exotic brew; among their reviews recorded on the Internet:

"I mentioned it to friends over a game of poker and their reactions varied from 'yuk' to 'you are bloody kidding, right?' I fed it to three of them and everyone loved it. All hail the mighty luwak."

"If you have a true coffee lover in your life then baby, this coffee is for them."

"It's as good as my private life is bad. this is the kind of coffee you renounce your religion and sell your child for."

"Here's the straight poop on luwak coffee."

"Another cup of poop, please."

Originally posted on the age.com Fairfax Australia http://www.theage.com.au/

(no credit was given to the writer...something we had to credit)

Starbucks' policy grinds farmers and ignores Fair Trade guidelines

by Mark Maher '08
SJUHawknews
Saint Joseph's University
Philadelphia Pennsylvania

According to their mission statement, Starbucks is committed to "…apply[ing] the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee." Indeed, Starbucks does appear to apply the highest standards when roasting and delivering their coffee. Unfortunately for their farmers, and for any person with some sense of humanity, Starbucks does not apply these same standards to the purchasing of their coffee.

Of course, if one were to ask Starbucks, you would almost believe that they invented fair trade. According to a leaflet available on their website, Starbucks purchased approximately 11.5 million pounds of fair trade coffee, which accounts for 10 percent of all purchased fair-trade coffee.

First, according to their own statement, companies other than Starbucks purchase 90 percent of all fair trade coffee.

Furthermore, fair-trade coffee farmers only produce around two percent of the world's coffee. Therefore, the majority of the coffee you buy at Starbucks comes from providers who are not fair-trade certified.

Organicconsumers.com reports that Starbucks claims to pay an average of $1.20/lb., fairly close to the minimum fair-trade average of $1.26/lb. At first glance, it appears as though Starbucks is independently promoting fair wages for farmers, without a fair-trade certification.

However, this is an average number, which takes into account both conventional and organic (traditionally higher priced) coffees. Furthermore, Starbucks does not import their coffee. The $1.20/lb. average is paid to the coffee importers, the middlemen.

Realistically, the average actually paid to the farmers actually comes to about $.80, far below the fair-trade minimum.

A more specific example elucidates Starbucks' record even more clearly. According to Oxfam.org, Starbucks charges almost $26/lb. for some of their Ethiopian specialty coffees. However, only about five to ten percent of this price actually goes to the farmers. Ethiopian farmers, very aware of how the global market works, have been campaigning for the right to have their own name attached to the coffee they produce, a move that would give them more leveraging power when selling their coffee. As of yet, Starbucks has not given this right to the farmers.

It is a real shame that a company as large as Starbucks feels the need to pull the wool over its consumers' eyes. Starbucks is nothing without the people who buy their coffee, and it is poor business, in my opinion, for them to mislead those who put food on their plates.

Since Starbucks is apparently unwilling to provide their farmers a fair wage, it is our responsibility as consumers to let them know what we think.

If you think that Starbucks is not living up to the standards that a socially conscious company should, let them know - write letters, call them up. If Starbucks refuses to change, then maybe we should not buy their coffee. There are alternatives here on campus, and elsewhere, that provide fair-trade certified coffee. Starbucks may provide us with coffee, but we provide them with their business.

This was originally posted on February 7, 2007 by the Saint Joseph's University Campus News Philadephia PA SJUHawknews http://www.sjuhawknews.com/

Commodity Primer - Coffee the Stimulant

The Financial Express - Commodity Watch

What do we know about coffee and what are the popular varieties of coffee?

Coffee is a world famous beverage and is widely drunk in almost every part of the world. There are around 25 varieties of coffee known to the world. Coffe Arabica and Coffea Robusta are the two most commonly cultivated species of coffee widely used throughout the world.

What is the global coffee production per annum? Which are the world’s major producers of coffee?

The world production of coffee is around 6 million tonne per annum. Brazil (33.16%), Columbia (11.65%), Vietnam (10.61%), Indonesia (5.97%), Mexico (4.59%) and India (4.60%) are the world’s major coffee producers contributing to around 70% of the total coffee produced in the world.

Which are the major consumers of coffee in the world?

The US, Canada, Japan. Germany, Italy, UK, Poland and Spain are the major consumers and importers of coffee. India consumes around 30% of its total production. The Indian consumption of coffee is also increasing with time.

Which are the major coffee growing regions in India?

Chikmagalur, Coorg and Hassan in Karnataka, Wayanad, Travancore and Nelliampathy in Kerala, Pulneys, Nilgiris, Shevroys (Salem) and Anamalais (Coimbatore) in Tamil Nadu are considered as the traditional coffee growing regions in India whereas the non-traditional areas include the eastern states of Andhra Pradesh and Orissa .The north-eastern states of Assam, Manipur, Meghalaya, Mizoram, Tripura, Nagaland and Arunachal Pradesh are other coffee growing regions in the country.

What is the market scenario for Indian coffee?

India is the world's fifth largest producer of coffee, producing around 3 lakh tonne annually. Indian coffee is considered to be one of the most stimulating coffee in the world, being mild in nature i.e. having a low acid content. India is the only country, which grows all of its coffee under shade. India currently exports about 70% of its total coffee production to around 44 countries across the globe.

What are the factors affecting the market for coffee?

The size and availability of coffee stocks worldwide, changes in coffee consumption pattern governed by factors such as standard of living and cultural acceptability, availability and prices of coffee substitutes like tea and cocoa are the factors apart from the climatic factors which determines coffee prices.

—Courtesy - MCX Training

URL: http://www.financialexpress.com/fe_full_story.php?content_id=153756

Drinking coffee can ward off diabetes and ....

(Reuters)

Updated: 2007-05-02 10:37

February 24, 2007.

Drinking coffee can help ward off type 2 diabetes and may even help prevent certain cancers, according to panelists discussing the benefits -- and risks -- of the beverage at a scientific meeting.

A visitor checks coffee beans at the 'International Coffee Festival 2007' in the southern Indian city of Bangalore February 24, 2007. Drinking coffee can help ward off type 2 diabetes and may even help prevent certain cancers, according to panelists discussing the benefits -- and risks -- of the beverage at a scientific meeting. [Reuters]

NEW YORK - Drinking coffee can help ward off type 2 diabetes and may even help prevent certain cancers, according to panelists discussing the benefits -- and risks -- of the beverage at a scientific meeting.

"We're coming from a situation where coffee had a very negative health image," Dr. Rob van Dam of the Harvard School of Public Health, who has conducted studies on coffee consumption and diabetes, told Reuters Health. Nevertheless, he added, "it's not like we're promoting coffee as the new health food and asking people who don't like coffee to drink coffee for their health."

Van Dam participated in a "controversy session" on coffee at the Experimental Biology 2007 meeting underway in Washington, D.C.

Dr. Lenore Arab of the David Geffen School of Medicine at UCLA also took part, presenting results of a review of nearly 400 studies investigating coffee consumption and cancer risk.

There's evidence, Arab noted, that the beverage may protect against certain types of colon cancer, as well as rectal and liver cancer, possibly by reducing the amount of cholesterol, bile acid and natural sterol secretion in the colon, speeding up the passage of stool through the colon (and thus cutting exposure of the lining of the intestine to potential carcinogens in food), and via other mechanisms as well.

However, Arab did find evidence that coffee may increase the risk of leukemia and stomach cancer, with the case for leukemia being strongest.

The findings suggest that people who may be vulnerable to these risks -- for example pregnant women and children -- should limit coffee consumption, van Dam noted in an interview.

He and his colleagues are now conducting a clinical trial to get a clearer picture of the diabetes-preventing effects of coffee, which were first reported in 2002. Since then, he noted, there have been more than 20 studies on the topic.

Van Dam and his team are also looking for which of the "hundreds to thousands" of components of coffee might be responsible for these effects. It's probably not caffeine, he noted, given that decaf and caffeinated coffee have similar effects on reducing diabetes risk.

His top candidate, van Dam says, is chlorogenic acid, an antioxidant that slows the absorption of glucose in the intestines.

Melborne Academics report Oxfam coffee 'harms' poor farmers

by Caroline Overington

April 28, 2007

TWO Melbourne academics have lodged formal complaints against Oxfam Australia over the sale of Fairtrade coffee, saying it should not be promoted as helping to lift Third World producers out of poverty because growers are paid very little for their beans.

Tim Wilson, a research fellow at the Institute of Public Affairs, and Sinclair Davidson, professor of institutional economics at RMIT University, have asked the Australian Competition and Consumer Commission to investigate Oxfam, saying it is guilty of misleading or deceptive conduct under the Trade Practices Act.

Mr Wilson said there was evidence that Fairtrade products could do more harm than good for coffee producers in undeveloped nations. He cited reports alleging producers had been charged thousands of dollars to become certified Fairtrade providers and some labourers received as little as $3 a day.

In order to lodge the complaint, Mr Wilson purchased a 250g pack of Fairtrade organic decaf ground coffee from the online Oxfam shop.

"We purchased this product in good faith, with the aim of lifting people out of poverty while enjoying our favourite brew," Mr Wilson said, in his letter to ACCC chairman Graeme Samuel.

Mr Wilson and Professor Davidson have long held doubts about whether Fairtrade products help coffee, tea and cocoa producers in undeveloped nations. Sales of such products in Australia total about $8million.

The complaint to the ACCC refers to an article published in the Financial Times last September, which said Fairtrade coffee beans were "picked by workers paid below minimum wage". It claimed workers received the equivalent of $3 a day.

The coffee is sold at a premium to people concerned about Third World poverty.

The academics quote an analysis of Fairtrade, published in the US-based Cato journal, which says coffee producers in poor nations are charged $3200 to become certified Fairtrade providers. The producers' costs are therefore higher than on the open market. The Fairtrade campaign aims to manage the international coffee trade by fixing prices at $US1.26 ($1.64) per pound (454g) and eventually fixing supply.

"Oxfam says the Fairtrade coffee allows growers in developing countries to sell coffee 'at a decent price' but we don't accept that the Fairtrade system can work," Mr Wilson said.

"Our primary complaint is that this is an unsustainable system. The only sustainable mechanism is through free trade. They are artificially cooking up the international coffee trade, to promote the interests of the Fairtrade brand and the people who sign up to it."

Fairtrade coffee is stocked by Coles and the Hudson coffee chain. Origin Energy and Orica make Fairtrade coffee available to staff in their Australian offices.

Oxfam rejected the academics' claims. It is this week promoting a Fairtrade Fortnight. To mark the event, Oxfam Australia invited Costa Rican coffee farmer Guillermo Vargas to a series of lectures on Fairtrade.

Oxfam's Neil Bowker rejected criticism of the Fairtrade coffee project, saying: "It's all audited and monitored, from beginning to end, and we've got no doubts about the effectiveness."

Java justice

originally posted by Stephanie Paige Ogburn at 11:08 AM on 12 Apr 2007

Fair Trade producers in Mexico depend heavily on organic certification to reap price premiums for both labels, and will be hurt on more than one front by the recently released USDA rule requiring them to change certification practices, researchers say. In a recent article in Salon, later followed by a post on Gristmill, Samuel Fromartz detailed the consequences of a USDA ruling that would force a radical change in the way grower groups in the global South certify their products. The USDA ruling, Fromartz writes:

Tightens organic certification requirements to such a degree that it could sharply curtail the ability of small grower co-ops to produce organic coffee -- not to mention organic bananas, cocoa, sugar and even spices.

Fromartz says he only hit the tip of the iceberg. So I hunted around a bit, seeking to find out more about how the ruling would impact producers in developing nations. I contacted Aimee Shreck and Christy Getz, two researchers who have published on organic and Fair Trade in developing nations. And notably, I got in touch with Tad Mutersbaugh, a professor of geography at the University of Kansas. Mutersbaugh's research focuses on international certification standards, and he's worked with organic and Fair Trade certified grower groups in Oaxaca, Mexico. He was familiar with the recent USDA ruling, and expressed his concern about the implications the ruling would have for small farmers in organic and Fair Trade grower groups.

Mutersbaugh made a distinction that I had not yet heard. It is written in the USDA ruling, and refers to grower groups' use of "internal inspectors" versus "external inspectors."

Internal inspectors generally come from the region they certify, but are specially educated by the larger grower organization in how to certify farms. They are usually true believers in the organic project, says Mutersbaugh, and work for low wages in order to get the job done, charging as little as $1 per inspection. In contrast, external inspectors cost $150 per day, and are also much slower.

"I once attended an external inspection where we managed to do four fields in a day (at $150/day rate) because the inspector simply could not take all of the walking," Mutersbaugh wrote in an email message. "I then went on an internal inspection where we literally ran down through a canyon and up a mountain, performing 10 inspections in a day at the cost of just $1 per inspection!"

But the USDA ruling prohibits use of internal inspectors, a move that, according to Mutersbaugh, will have dire consequences for small-scale producers. "The only way to do inspections is by using 'internal inspectors'," he said. "If external inspectors are used, the cost will be absolutely prohibitive."

Costs are a big deal to small growers involved in these cooperative groups. Mutersbaugh notes that the $15 organic premium per 100 pound sack can significantly help these farmers, who often earn less than $1,000 a year. He also notes that many of these farmers are indigenous women whose husbands have migrated in search of work. And, Mutersbaugh says, because only a percentage of Fair Trade coffee is actually sold as Fair Trade, since the supply of Fair Trade exceeds the demand, the organic certification is that much more important for these growers.

Organic certification, Mutersbaugh writes, "is ... the key for farmers who want to get Fair Trade market access. If they produce coffee that is 'double certified' as Fair Trade and organic, and their coffee is gourmet quality, they will gain market access. This is why farmers spend so much -- and it really is costly -- to gain access to Fair Trade Certified/organic markets."

In response to worries about organic standards being broken, Mutersbaugh admits this is a "concern" not held only by the USDA -- Mexican grower groups worry about it as well. But external certification has its own problems. Mutersbaugh cites an example where a village had been offered certification by an external inspector, but without actual inspections. "Basically," Mutersbaugh said, "the external inspector would simply invent the paperwork! These [organizations] have come to be called 'chafa' (as in wheat chaff) certifiers, but they pose a real challenge."

Mutersbaugh hammered home two points related to corruption and certification:

1. "Internal inspectors do not, in my experience, certify their own villages: They certify other villages outside of their regional organizations."

2. "Internal inspectors are accredited. They must receive training and pass examinations approved by the national level certifier."

Mutersbaugh also tied the USDA ruling into the bigger picture of international conservation, development, and the global economy. He wondered why it took ten years for the organic price premium to increase by five cents a pound. (In June of 2007, the price for a 100-pound sack of organic coffee will jump from $15 to $20.) The cost for certification over this 10-year time period has "skyrocketed," he said, but "this price is simply not reflective of ... the cost to certify."

In addition to this, he added, certified-organic producer families are often key partners in crafting conservation infrastructure. These farmers not only produce coffee, but also habitat. Their fields and conserved lands offer water filtration services, and their conservation support preserves biodiversity and endangered species. Grassroots environmentalists in Mexico often work with networks of certified organic growers to preserve prime conservation land. "What of the songbirds protected, butterflies?" he asked.

Mutersbaugh offered a two-part compromise as a way to alleviate some of the USDA's concerns and strengthen certification processes:

1. There should be a "thoroughgoing accreditation process" for internal inspectors, he said. This would allow internal inspectors to be accredited by external bodies, therefore making the system more credible, but still affordable.

2. The organic premium should be increased to $30 a sack (30 cents a pound) "so that internal inspectors can afford to be inspectors rather than migrants to the U.S" Many good inspectors, he said, leave the business because it is such a low-paying and thankless job. A premium increase to 40 dollars a sack would be a "better bet," he adds, but he doesn't think that's realistic.

But as Mutersbaugh and the other researchers I contacted noted, barriers to entry in organic production are high, and U.S. consumers need to be willing to compensate grower groups in order to help them develop the infrastructure needed to support organic. If it takes 40 dollars a sack -- well, for U.S. consumers, that's just 25 cents more per pound than we're paying now. "Imagine," Mutersbaugh says, "getting a raise only once a decade!"

Can Coffee Stimulate Hair Growth?

Renowned Coffee and Science Expert to Discuss Caffeine's Health Benefits at International Culinary Center

New York, April 25 /PRNewswire/ -- Dr. Ernesto Illy, International Coffee Organization Promotion Committee Chairman and Honorary Chairman to premier Italian espresso company, illycaffe, is scheduled to present at the International Culinary Center on Friday, April 27, 2007. Key topics will include coffee's effects on degenerative diseases Parkinson's and Alzheimer's, weight loss, and even baldness, followed by a special espresso extraction tasting. Dr. Illy will share eighty-two years of scientific expertise with the renowned chefs and aspiring students at New York City's prestigious International Culinary Center, presenting recent breakthrough scientific coffee research including:

• The Center for Prevention and Health Service's ten-year study oncoffee's inverse correlation to the cognitive decline in men
• American Journal of Medical Genetics recent study on the interaction of coffee and Parkinson's Disease
• Caffeine reported to stimulate human hair growth in the International Journal of Dermatology

About Dr. Ernesto Illy

Throughout his career, Dr. Illy has openly shared his scientific discoveries -- not only to advance the interests of his own company, but for the benefit of all people who enjoy and appreciate the authentic Italian coffee experience. His passion and life's work make him espresso's most respected ambassador. He has single-handedly introduced some of the

most important quality control innovations in espresso brewing in the last 30 years. By applying the scientific method, illy has given the consumer the greatest gift -- the highest quality Italian Espresso coffee each and every cup.

(keep in mind, this is a press release produced by.. yup..illy.)

Certifying Coffee Aids Farmers and Forests in Chiapas

NYTimes

April 22, 2007

By ELISABETH MALKIN

NUEVO PARAÍSO, Mexico — Miguel Moshán Méndez’s troubles have piled up over the past two years.

Like other coffee growers here in the impoverished state of Chiapas, he suffered devastating losses when Hurricane Stan passed through 18 months ago, tearing coffee trees from hillsides. He lost half his trees, then borrowed money to get by. Now, he must find extra work as a laborer to pay his debt, which will make it harder to maintain his tiny farm.

“I have always fallen to the moneylender, God yes,” he said, sitting in the office of his coffee-growing cooperative.

One source of hope: the increasing number of programs that help growers get higher prices for their beans if they show that they are protecting the environment, investing in community projects and treating workers well.

Most of the programs are run by nongovernmental organizations, or N.G.O.’s, intent on both improving the lot of farmers and the environment in the world’s coffee-producing regions. The N.G.O.’s certify coffee that meets their standards, banking on the notion that consumers will pay higher prices for coffee produced with concern for workers and the environment. They believe that, in turn, will drive up the price that companies are willing to pay the farmers.

Mr. Moshán Méndez’s cooperative sells to Starbucks, which has a similar in-house program that pays higher prices to farmers who meet its standards.

In this coffee region, known as Jaltenango, on the eastern slopes of the Sierra Madre, the programs appear to be making a difference, farmers say. Higher prices for certified beans have trickled down to some growers, and certification has had an environmental impact.

In the past, the area has lost forest when poor farmers cut trees and switched to cattle ranching or growing corn to try to make more money than they did cultivating coffee beans. When the farmers earn enough money to stick with coffee instead, the forest is protected; coffee trees here are traditionally planted under a canopy of indigenous trees.

The rush to certify coffee is now drawing an expanding list of players, including giant plantations and multinational traders, something that seemed unimaginable just a few years ago.

“We have sold the idea to producers that this is life insurance,” said Santiago Arguello, who is in charge of certified coffee programs at Agroindustrias Unidas, or AMSA, the Mexican subsidiary of the giant trader ECOM Agroindustrial Corporation, based in Switzerland. “If we don’t learn to work with the little producer, the whole business will disappear.”

Such trading companies, the middlemen between growers and the corporations that roast the beans and sell coffee, have not been acclaimed for their social conscience in the past. Now as Mr. Arguello, himself a third-generation coffee farmer, sketched plans for his company to sell more certified coffee, he scrolled through a catalog of community projects he is urging importers in Europe and North America to finance.

Pioneers in the certified coffee movement watch the changes with wary approval.

“The good thing is that you see these ideas gaining traction,” said Rodney North, a board member at Equal Exchange, an importer in West Bridgewater, Mass., that has bought coffee under the Fair Trade certification program since 1986.

The most important element of Fair Trade, he said, is that it demands that buyers of the coffee it certifies pay higher than market price, and that the fixed price holds even if the market collapses. Other programs do not set a price, but those who run them argue that trading companies and smaller buyers will pay to assure a high quality supply.

The price for Fair Trade organic coffee has long been fixed at $1.41 a pound and this year it will rise to $1.51 compared with the market price of about $1.08.

But as the certification programs spread, they are drawing large plantations, or fincas, to join, raising worries among small-scale producers who fear they will lose their advantage as the original suppliers.

Rancho Custepec, one of the state’s largest coffee plantations, is one of the newcomers and is working with the Rainforest Alliance.

As part of the certification process, Armando Pohlenz, the grandson of the plantation’s founder, said he planned to put about eight square miles of his land in trust for El Triunfo reserve, a refuge for dozens of rare animals, including the quetzal.

Mr. Pohlenz said he applied to the Rainforest Alliance when he was looking for a long-term contract and a better price for his coffee, and one of his American buyers recommended that program. To get the certification, he also has had to improve workers’ safety conditions at the ranch’s mill.

Sixto Bonilla, the manager at the Cesmach co-op in Ángel Albino Corzo, the area’s largest town, said such competition from plantations would force changes among smaller producers. “If we want to stay in the business, we have to find the way to be more competitive,” said Mr. Bonilla, whose co-op sells under the Fair Trade label.

One morning last month near the end of the harvest, Margarito Robledo Vásquez watched as workers unloaded his coffee from a pickup truck into the Cesmach warehouse.

He had left his house before dawn to make the two-hour drive down the dirt mountain roads. He raked his fingers through the almond-colored unhusked beans in an open sack. “This puts a meal on the table for lots of families,” he said.

Belonging to the cooperative — and selling Fair Trade-certified beans — has paid off where it matters most: his daughters’ education. Two have college degrees, the other two are studying for them.

Over at the Comon Yaj Noc Pic co-op — the cooperative Mr. Moshán Méndez is part of — the farmers have placed their hope in the Starbucks relationship.

The co-op will receive $1.23 a pound this harvest from Starbucks, said Juan Carlos Cameras, a co-op official. (Starbucks pays $1.43 but AMSA, the trading company that is Starbucks’s buying agent in the region, takes its cut.)

With photos in Starbucks’s Mexican stores, the cooperative has become a showpiece for the chain’s Mexican franchisee, which has pledged $150,000 to the co-op’s social projects over the next three years, including a computer center for online high school classes, dormitories for the students and a sports field.

But for all the benefits of certified coffee, the plans have barely begun to blunt the acute poverty in Chiapas, the legacy of centuries of feudal relationships that are only now breaking down. “We should not think that Fair Trade can solve all the problems of inequality here,” Mr. Bonilla said.

In Brooklyn, Hipsters Sip ‘Fair Trade’ Brews

NYTimes

April 22, 2007

By LIZA FEATHERSTONE

WHEN Kazi Hossain, a real estate broker in Ditmas Park, Brooklyn, telephoned a client recently to describe a house for sale, he played up one of the property’s most desirable attributes. “One block from Vox Pop!” he exclaimed. “You know Vox Pop?”

It seems like everyone in that newly gentrifying neighborhood knows Vox Pop, a cafe and bookstore that, by day, draws young families and office job escapees. But perhaps more important than the knitting classes and band performances that establish the business as a kind of community center is its coffee, proudly described on well-placed signs and on the menu as “fair trade” brews.

“The fact that the coffee is fair trade is certainly more sustainable for the farmers, and having this coffeehouse also helps sustain our community,” said Willow Fodor, 29, a customer who said she moved to Ditmas Park because of the cafe. “I just loved the vibe.”

Fair trade, like more familiar labels such as organic, cruelty-free and sustainable, is another in a series of ethical claims to appear on products — a kind of hipster seal of approval. The fair trade ethic is spreading eastward from the West Coast, where it has been promoted by well-financed activist campaigns and where progressive politics are more intertwined with youth culture. Scott Codey, a member of the New York City Fair Trade Coalition, said the number of retailers in the city selling fair trade products like coffee, tea, wine and clothing has grown to hundreds, from 25, in the last three years.

In general, the fair trade label means that farmers of crops like coffee or cocoa in the third world, or workers who stitch T-shirts in factories abroad, are paid fairly. The label is intended as a guide for socially conscious consumers in rich countries when buying goods that originate primarily in Latin America, Asia and Africa.

Amid the wine bars and boutiques that line Fifth Avenue in Park Slope, Jonathan Coulton, 36, a musician wearing black rectangular glasses, was hunched over a laptop at Gorilla Coffee, where a blackboard proclaims all its coffees are fair trade. It “makes you feel like you’re doing something good just by drinking a cup,” he said.

It may be trendier to advertise clothing as green, or, in the words of a recent Barney’s Co-Op window display, as “insanely sustainable,” but fair trade — and its cousin, “sweatshop-free” — are gaining in popularity. Emily Santamore, a founder and a designer of Moral Fervor — a line of yoga clothing made from an eco-friendly fabric and, according to its Web site, “produced sweatshop-free in Portugal” — said boutiques regularly ask about the origins of her products. For her customers, she added, fair trade assurances are “becoming almost necessary.”

TransFair USA, a nonprofit group in Oakland, Calif., that awards a Fair Trade Certified label to farm products, says fair trade coffee is the fastest-growing specialty coffee in the United States. It claims that since 1999, its programs have put $60 million more into the pockets of third-world coffee growers than they would have otherwise earned. Such goods were once stigmatized as uncool: the weird Guatemalan pants worn by a high school art teacher, or the muddy-flavored coffee served at a student-run cafe. But savvy marketing, and better products, have helped the fair trade label shed its frumpy image. American Apparel, the fast-growing chain that pays most of its factory workers above the garment-industry standard, and which runs advertisements featuring skinny hipsters in provocative poses, has increased many customers’ awareness of labor issues and raised the design ante for products promoted as socially conscious.

Proponents of the fair-trade movement, which began in the 1980s in Europe (and where flowers and even soccer balls are labeled fair trade), say the low prices that most companies pay to producers in economically disadvantaged countries cause widespread misery: poverty, unsafe work conditions and forced child labor.

TransFair USA, founded by a group of activists in 1998, says it audits American companies that receive its certification to ensure that third world farmers of coffee, cocoa, fruit and other crops receive a “fair, above-market price.” The group says the system has improved conditions on farms and that the additional income, subsidized by higher consumer prices, has enabled farmers to send their children to universities and communities to build clinics and schools.

Fair trade has a particular appeal to a generation of consumers that came of age during campus labor protests. In 1996, Kathie Lee Gifford was humiliated on national television by the news that children in Honduras were making clothing bearing her name, and, in the ensuing years, student protesters demanded better conditions for workers making clothing with university logos; some streaked through campus because they would “rather go naked than wear sweatshop clothes.”

After graduating from the New School with a degree in literature in 1993, Sander Hicks, 36, the founder of Vox Pop, worked at a Kinko’s, where he and his fellow workers experimented with union organizing and even a worker collective. Now, he’s proud of his high-quality coffee, but asserts that the fair trade label gives it an additional “karmic kick.”

Not everyone is feeling it.

Some industry observers and journalists have identified labor abuses on farms producing crops that have been certified as fair trade by international groups, like paying migrant workers below a country’s legal minimum wage.

Jean Walsh, a spokeswoman for TransFair, conceded that this was sometimes the case. “But the fair trade system,” she said in an e-mail message, “is the only mechanism that begins to guarantee small-scale farmers the income they need to be able to improve the wages of laborers on their farms.”

(Unlike food, items such as clothing and other non-agricultural goods, when sold in the United States, have no single recognized certification system. Instead, consumers have to trust the wholesalers and retailers.)

And though many people buy fair trade products in reaction to what Mr. Codey of the New York fair trade coalition calls “mainstream commercial culture,” others point out that to make a real impact, fair trade has to become much more widespread, even if that means losing some of its in-group appeal.

Larger corporations, including McDonald’s, Starbucks and Dunkin’ Donuts, now offer some fair trade coffee, but, “it’s still too limited in the United States, to just a few commodities,” said Kevin Danaher, a founder of TransFair.

“It’s not places like Gorilla that are going to make a difference,” said Janice Allen, 27, a barista at Gorilla Coffee, with a piercing just over her lip and chipped blue nail polish. “Maxwell House going fair trade, that would make a difference.”

Global warming to damage coffee industry

Radio Australia - News

April 12, 2007, 03:05:52

Global warming poses a threat to future world coffee crops with rising temperatures and drought likely to force some producers to seek higher and cooler land.

Licht's International Coffee Report says global warming is going to present the world's coffee growers with a big challenge.

It notes a United Nations Environment Program research project in Uganda which says a rise in temperatures of about two degrees Celsius will mean a dramatic reduction in the coffee growing area .

In India's Coorg coffee region, rising temperatures and reduced rainfall will reduce the number of bees to fertilize the trees and increase the threat from a destructive pests.

[This is was orginally published on April 12, 2007 by Radio Australia
http://www.abc.net.au/ra/news/stories/s1894933.htm]

Coffee By the Bucket Better for Blood Pressure than By the Cup

By Neil Osterweil, Senior Associate Editor, MedPage Today

Reviewed by Zalman S. Agus, MD; Emeritus Professor at the University of Pennsylvania School of Medicine

MedPage Today Action Points

* Explain to patients that this longitudinal cohort study suggested that women drinking a lot of coffee may have a lower risk of hypertension than more abstemious women.

* Point out that the investigators suggested that the effects are small and patients who are normotensive, men or women, should not worry about coffee drinking.

UTRECHT, The Netherlands, March 23 -- Coffee for women, and its effect on their blood pressure, is an exception to the maxim that moderation in all things is a good approach to life, contend researchers here.

Women who drink coffee by the pot full for a long time had a lower relative risk of hypertension than did women who indulged in one to three daily cups, Cuno S.P.M. Uiterwaal, M.D., of the University Medical Center, Utrecht, and colleagues, reported in the March issue of the American Journal of Clinical Nutrition.

The effect on blood pressure of a lot of coffee did not hold for men, the investigators found in their longitudinal cohort study. But both men and women who abstained from coffee had a lower relative risk of hypertension than light coffee drinkers.

"The most important merit of our study is the elucidation of the role of coffee intake through its relation with hypertension in increasing the risk of cardiovascular disease," they wrote.

"Although there are reports claiming coffee to be hazardous, the larger cohorts show no association between coffee intake and cardiovascular morbidity or mortality or with the prognosis of myocardial infarction," they added.

They concluded that the effect of coffee on hypertension risk as it relates to cardiovascular disease may be immeasurably small.

"A practical implication from our findings would therefore be to abstain from professional advice concerning coffee intake in normotensive individuals, which indeed agrees with the latest clinical guidelines on hypertension," they wrote. "We cannot preclude that associations between coffee intake and cardiovascular outcomes are different among hypertensive individuals."

The investigators looked at the relationship between blood pressure and coffee consumption in 2,985 men and 3,383 women who took part in two general population studies of risk factors for chronic diseases.

The patients, with a mean age of 40 at study entry, had baseline visits during which they filled out detailed questionnaires on medical history, lifestyle habits, and diet, including coffee consumption.

The participants were asked how many cups of coffee per day they drank, type of coffee (regular, decaf or other), and whether they added milk or sweeteners. The participants had follow-up visits at six and 11 years.

Hypertension was defined as a mean systolic blood pressure of 140 mm Hg or higher over both follow-up measurements, a mean diastolic of 90 mm Hg or higher over both follow-up measurements, or the use of antihypertensive medication at any follow-up.

The authors found that people who never drank coffee at all had a lower risk for hypertension than light coffee consumers -- those who drank between one and three cups daily. The adjusted odds ratio for coffee abstainers versus light drinkers was 0.54 (95% confidence interval, 0.31-0.92).

On the other end of the scale, women who drank more than six cups of coffee per day had a lower hypertension risk than women who drank between zero and three cups (adjusted odds ratio 0.67; 95% CI: 0.46-0.98).

Men who did not drink coffee also had a lower risk relative to those drank one to three cups daily (adjusted odds ratio 0.60 (95% CI, 0.24-1.49), but adjusted odds ratios for the other two consumption categories, four-to-six cups, and more than six cups daily, were close to 1.00 (1.08, 95% CI 0.79-1.47 and 1.03, 95% CI, 0.72-1.46, respectively).

The authors also found an association between age, hypertension, and coffee consumption. Men and women age 39 and over at baseline had 0.35 mm Hg lower systolic pressures for every cup of coffee they drank daily (95% CI: -0.59 to - 0.11mm Hg), and 0.11 mg Hg lower diastolic pressure (95% CI, -0.26 to -0.03 mm Hg) compared with younger participants, but the latter was not statistically significant.

Dr. Uiterwaal was the recipient of an unrestricted grant from the organization on Physiological Effects of Coffee in Paris. There were no other author conflicts of interest, they reported.

Primary source: American Journal of Clinical Nutrition

Source reference:

Uiterwaal CSPM et al. "Coffee intake and incidence of hypertension." Am J Clin Nutr 2007;85:718 -23.

This article was orginally published on March 23, 2007 by MedPageToday.com. You can visit them on http://www.MedPageToday.com