Coffee Ecolabeling: Profit, Prosperity,

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Coffee Eco-labelingProfit, Prosperity,
Healthy Nature?
Brian CrespiAndre GoncalvesJanani Kannan
Alexey KudryavtsevJessica Stern
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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

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Question at Hand

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

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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
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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

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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

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Shade-grown

Fair trade
Organic
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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

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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
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Organic

• Grown free of pesticides, herbicides, fungicides
  and other chemicals
• Environmental benefits
• Often coexisting with shade grown certification
• Most developed current certified coffee market

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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
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Environmental Impacts
Traditional
Modernized
Perfecto and Snelling. (1995) Biodiversity and
the transformation of a tropical
agroecosystems. In Ecological Applications 5
1084-1097.
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Environmental Impacts

• Loss of biodiversity
• Invasive species
• Soil erosion
• Deforestation
• Agrochemical pollution
• High energy demand

• More yield
• Control over ecosystem
• Cheaper production

But
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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?
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Socio-Economics

• How far does the world-wide coffee industry
  extend?

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Current trends affecting growers deal with -

• Globalism

Drive for a better profit, not a better
environment
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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).

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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).

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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

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Consumers
Arguments Against Certification

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

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

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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)

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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

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One last thing . . .

• We created a web site with

• Our paper
• Our references
• Links to websites
• Our PowerPoint presentation