Coffee Eco-labeling:Profit, Prosperity,& Healthy Nature?

Brian CrespiAndre Goncalves

Janani Kannan Alexey Kudryavtsev

Jessica Stern

Presentation Outline

I. Introduction • Question at hand

• Background of Coffee and Eco-labeling

II. Environmental Impacts

III. Socio-Economic Impacts• Growers and Consumers

IV. Conclusions • Future and Alternative Options

Question at Hand

Is eco-labeling of coffee an effective market incentive to promote environmentally friendly production methods?

Background • Coffee

– 2nd most traded commodity in world, next to oil

– 5.3 million tons produced globally and exported in 2002 (U.N. Food and Agriculture Organization)

http://www.jeremiahspick.com/organic.shtml

Background

• Eco-labeling – A strategy to encourage strong

environmental practices through incentives for the producer

• Price premium• Competitive advantage

– Appease pressures from environmentalists

• Future considerations (sustainability)– Future market concerns– Conservationist outlook

Eco-labeling

• Not a standard process– Third party certification

• Own criteria for certification under certain principles for different aspects i.e. organic

• Credibility is key– Gives consumer advantage

– Schemes of Coffee Labeling• Fair Trade• Organic• Shade Grown

Fairtrade

Organic

Shade-grown

Coffee Certification Schemes

• Schemes are not mutually exclusive– Many growers are certified organic,

shade grown and fair trade• Must meet criteria for each, but does not

mean being certified as one means you are or are not certified by another

Fair Trade

• Seeks to offer small farmers and cooperatives of farmers a fair price for their coffee– Ensures access to credit for farmers

among other mechanisms

• Often coexisting with stated sustainable growing practices – Modern plantation farming is not

conducive to small farmers due to high resource costs and involved methods

http://gbgm-umc.org/nwo/01so/fairtrade.html

Organic

• Grown free of pesticides, herbicides, fungicides and other chemicals– Environmental benefits

• Often coexisting with shade grown certification

• Most developed current certified coffee market

Shade Grown• Grown under a canopy

of trees– The traditional method of

growth before the modernization of coffee agriculture

– Typically yields a high-quality product with a lesser need for chemical inputs

– Most often organic also

www.coffeesearch.org/politics/shadegrown.jpg

Environmental Impacts

Traditional Modernized

Perfecto and Snelling. (1995) “Biodiversity and the transformation of a tropical agroecosystems.”In: Ecological Applications 5: 1084-1097.

• Loss of biodiversity

• Invasive species

• Soil erosion

• Deforestation

• Agrochemical pollution

• High energy demand• More yield

• Control over ecosystem

• Cheaper production

But:

Environmental Impacts

Working

landscape?

Working for people:• Food safety• Coffee + fruits + timber• Natural pests control• Stable yields

…and for nature:• No habitat lost• Conserve species• Carbon sequestration

Environmental Impacts

Socio-Economics

How far does the world-wide coffee industry extend?

Current trends affecting growers deal with -

Drive for a better profit, not a better environment

Flaws in Eco-Labeling for Growers

“In practice, small farmers need additional help and incentives to adopt the [bio-diversity friendly] certification criteria . . . Small farmers with [conventional polyculture] farms need to be presented with strategies to lower the risk of investment . . . (Gobbi, 2000).”

Flaws in Eco-Labeling for Growers

“The entry cost to organic production, even subsidized, appears to be too high for the smallest producers, but organic production is a significant option for the slightly larger producers (Bray et al. 2002).”

Pro-Certification Arguments:

Growers cannot get a premium

Big companies cannot be held accountable unless they have certification

Confidence that the coffee purchased actually serves the purpose

Ensures good scientific criteria

Helps make an informed decision

Consumers

ConsumersArguments Against Certification:

Certification price is too high

Does not control possibility of fraud

Broker should be certified

Deciding between labels becomes difficult

ConsumersThree approaches:

1. Farmers should not bear the burden of certification costs.

2. “Relationship coffee” - trading coffee through known sources; certifying brokers

3. Good quality would ascertain good premium like gourmet coffee

Figure 2: (National Coffee Association) Percentages of both awareness and total purchase of eco-labeled coffee increased from 2003 to 2004.

Consumers

Drawbacks and Failures

1. Inversion of Values

2. Cost of certification schemes• Difficult without third party support

3. Certification Methodology neglecting social relations

4. Organic norms and regulations across different landscapes

Alternative Certification Systems

Origin:

Southern and Northern countries

Reasons: • certification costs • paradigm for ensuring credibility

• more adapted system to local realities

Definition:

A process which generates credibility for the organic product based on the participation and integration of all stakeholders who have interest to guarantee the quality of the product. (Meirelles 2003)

Alternative Certification Systems

Characteristics: • Involve several stakeholders• Based on negotiated standards• Trustworthy relationships• Attempt to integrate social and environmental concerns

Examples:• Community Support Agriculture• Farmers Markets• Box schemes• Home deliveries• Popular fairs

International Workshop on Alternative Certification

One last thing . . .

We created a web site with

Our paper

Our references

Links to websites

Our PowerPoint presentation