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

Coffee Eco-labeling:Profit, Prosperity,& Healthy Nature? Brian CrespiAndre GoncalvesJanani KannanAlexey KudryavtsevJessica Stern

Presentation Outline • Introduction • Question at hand • Background of Coffee and Eco-labeling • Environmental Impacts • Socio-Economic Impacts • Growers and Consumers • 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

Shade-grown Fair trade Organic

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

ShadeGrown • 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.

Environmental Impacts • Loss of biodiversity • Invasive species • Soil erosion • Deforestation • Agrochemical pollution • High energy demand But: • More yield • Control over ecosystem • Cheaper production

Environmental Impacts Working for people: • Food safety • Coffee + fruits + timber • Natural pests control • Stable yields …and for nature: • No habitat lost • Conserve species • Carbon sequestration Working landscape?

Socio-Economics How far does the world-wide coffee industry extend?

Current trends affecting growers deal with - Globalism 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).”

Consumers 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 Arguments Against Certification: • Certification price is too high • Does not control possibility of fraud • Broker should be certified • Deciding between labels becomes difficult

Consumers Three 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

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

Drawbacks and Failures • Inversion of Values • Cost of certification schemes • Difficult without third party support • Certification Methodology neglecting social relations • 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

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