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Coffee Supply Chain Overhaul

Coffee Supply Chain Overhaul

Since traceability is becoming a more popular buzz word in the coffee world, it is opening the eyes of the public in terms of how poorly the Coffee farmers are compensated for their work. We have discussed how the Farmers are at the bottom of the coffee supply chain and this new awareness is bringing about a push for a coffee supply chain overhaul. In an article from Forbes July 16th 2014 , contributor Anne Field hits on major points regarding growing the farmer’s profits.

To Get a better grasp on the situation, take a look at the coffee supply chain as it reaches the consumer:

Coffee Stored after import. Fees are usually .01/lb monthly. Do the math on a 100,000 lbs.

  1. Farmer
  2. Co-Op / Processor
  3. Certifier  (Fair Trade, Organic, Shade Grown, etc.)
  4. Exporter
  5. Shipper
  6. Importing Agency
  7. Commodities Traders & Hedgers
  8. Warehouse
  9. Broker
  10. Roaster
  11. Packaging
  12. Distributor
  13. Store
  14. Consumer

14 Steps on average, and no one in this coffee supply chain works for free, and unfortunately the farmer is the one who pays the price since he needs to sell his crop and the weight of the chain forces him to sell at a very low, low price for their work. The Fair Trade organizations are doing their part in setting prices for the farmers who produce and participate in the Fair Trade standards. However since a large part of coffee grown in not Fair Trade, this leaves a big gap.  A company called Vega has an idea to help close the gap.

They are proposing the coffee farmers begin to develop plans to process, roast, and ship directly to the US, then from there to the consumer. That would eliminate 7-8 steps in the coffee supply chain and that many hands out of the farmer’s pockets. The only issue here is that businesses don’t like to give up money, and since we are talking about the #2 Global commodity, this could be met with resistance from the corporate world.

This idea would help nearly 80% of coffee farmers, giving them more control and hopefully sustainability in the future, but nothing will happen overnight, since this plan began back in 2005. In the end, it will be about who gives up what and how much in order to gain the Coffee Farmers a better income.

Support your Coffee Farmers!!