A gathering of coffee traders approved a plan to combat world oversupply and rescue low prices, but delegates said on Tuesday there was no way the measures advocated by British charity Oxfam could be enforced.
A non-binding resolution adopted by a conference of mainly Ethiopian traders and Oxfam officials in Addis Ababa late on Monday urged big coffee buyers and roasters to pay the world’s coffee farmers a fair price and stipulated a one-off destruction of at least five million bags of global stocks and limiting international trade to high quality beans.
The plan, read out and declared adopted by the organisers, does not set out mechanisms for implementation or compliance.
No official representative of any of the industry’s big roasters was present at the gathering in Addis Ababa, although some of their Ethiopian agents were present.
Critics of the plan said it would not be easy to achieve its goals because it lacked a system to enforce it.
”I support the idea, but God knows whether it will work or not,” Workshet Bekele, an Ethiopian-based coffee agent for Kraft Foods, told Reuters on Tuesday.
”If it comes from the International Coffee Organisation with a mechanism to enforce it, then it could work,” he said, referring to an umbrella group of producers and consumers.
”What we need to solve the crisis is to have major producers cut their production, and the International Monetary Fund (IMF) and World Bank must stop funding countries to produce more coffee.”
In a recent report, Oxfam asked the big five roasters, Kraft Foods, Nestle , Procter and Gamble , Sara Lee and Tchibo of Germany to share their huge profits with the world’s 25 million coffee farmers.
It estimated their annual combined sales at $1 billion, at a time when farmers are earning less than their production costs.
The charity also blamed the low coffee prices on a dramatic rise in exports by newcomer Vietnam, which climbed its way to become the world’s second largest producer after Brazil in 2001 after a World Bank initiative to boost production in Asia.
The IMF and World bank deny any role in the higher crop.
Oxfam, which called the conference, said many coffee buyers and roasters were invited but only a few came.
Swiss-based Volcafe, the world’s second-biggest green coffee merchant, was represented by an Ethiopian agent who said he was not authorised to talk to the press.
Haile Reta, a U.S.-based Ethiopian coffee buyer with United American Traders Corporation, said: ”Roasters and buyers have no means to compensate poor farmers as coffee prices follow demand and supply.”
”I tell you, all this jazz and talk will bring nothing to farmers.”
Reta said his firm buys an average of 15,000-20,000 tonnes of coffee from Ethiopia per year, out of a total of 300,000 tonnes a year in purchases from other producers.
The resolution urged roasters to increase to two percent the proportion of their purchases made under ”fair trade” conditions but did not indicate a time schedule by which they should comply, or list any enforcement clauses.
Fair trade means paying farmers a price that can cover their production costs and meet their basic needs. Ethiopia is one of the coffee producers that have faced the brunt of the crisis, and is also the birthplace of coffee, which grew in the misty forested highlands of its western Kaffa province.
The country, one of the poorest in the world, depends on coffee exports for two-thirds of its foreign exchange earnings. It now faces a crisis with export earnings at a lowly one-third of previous levels.
Ethiopia is Africa’s third largest coffee exporter behind Ivory Coast and Uganda. Despite boosting its coffee exports by 14 percent in 2001/02 (July-June), earnings fell as world prices fell dramatically to touch 30-year lows.
Some coffee farmers to the east of the country are turning to production of qat, a mild leafy stimulant, which is exported to Somalia and Djibouti, to supplement their incomes. – Reuters