Just as coffee growers across the globe continue to grapple with declining prices, Olam Coffee CEO, Vivek Verma, has called on governments and industry to work together and develop a safety net for coffee farmers.
In recent times, prices of Coffee have plummeted the lowest international price in a decade forcing millions of coffee farmers to sell below their cost of production prompting many discouraged farmers to abandon their farms, further fuelling fears of an industry crisis.
According to Olam Coffee, the world’s coffee farmers will be left in a continual limbo unless industry and governments act fast to help them out of the current price crisis and provide future price stability as they face the impacts of climate change.
“I believe it is time to seriously look at implementing a price stabilisation fund that will subsidise farmers when prices are low for reducing production capacity over the short-term while helping them mitigate the long-term impacts of climate change,” he said
The fund would then recoup the subsidy when prices are high without any burden to local government budgets, he added.
Verma further noted that Olam is supporting farmers, 56,000 smallholders in a sustainability program with its customers and partners across 18 origins but this is a drop in the ocean.
Coffee is a tropical plant, which comes in two main types: Robusta and Arabica. It is the most valuable and widely traded tropical agricultural commodity in terms of production and earning.
Over 25 million smallholder farmers produce 80 percent of the world’s coffee, and coffee provides a livelihood for a further 100 million people in coffee-producing countries.
Coffee producing states in Nigeria include Plateau, Kwara and Kogi States just to mention few with many coffee farmers in these states abandoning their farms for other agricultural products.
Verma, however, calls for upskilling farmers to improve quality for higher income adding that farmers must apply new processes to produce differentiated or specialty coffees, which fetch a higher price on the market and could help to safeguard single-origin blends.
OLUFIKAYO OWOEYE
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