Just over a year ago, I was riding in a pickup truck—somewhere in a forgotten corner of northern Peru—next to Emiliano Vilchez, the third coffee farmer we partnered with. We were discussing how low the price of coffee was from the 2017 harvest, and how it would have to improve.
"It couldn't really go much lower, could it?" Emiliano asked me. "No, no—I don't think that's possible," I said. "If the price were to fall any further, it wouldn't make a lot of financial sense to pick coffee." Emiliano replied, "Yes...I suppose that's true."
Fast-forward to January 29th, 2019, and my teammate Zach and I were interviewing Emiliano inside of a coffee shop in Jaen, the dusty, coffee-focused frontier town where his cooperative is located. As I entered data Emiliano had provided us with into the spreadsheet in front of me, I began to shake my head as the reality became clear: the price that Emiliano had received for his coffee in 2018 had, in fact, fallen even further.
"This is terrible," I said to Emiliano. He nodded softly, silently, unsure of how to reply. After a moment, he spoke up: "Well...I suppose it can't fall any further, right?"
I wanted to tell Emiliano "yes." "Of course!" But, then again, I had just realized that the amount Emiliano had been paid, at market price, per pound of coffee, fell by 14%, from $1.08 per pound to $0.93 per pound. The word that kept coming to mind was "ridiculous." It was ridiculous that Emiliano was being subjected to market forces infinitely beyond his control. In front of me was an honest man who just wanted to receive a decent return for his hard work.
Of course, our bonus would help him immensely: Farmers First Coffee boosted his income in 2018 by 110% compared to only 56% in 2017, an enormous increase (see our transparency scorecard at the end of this post). We had also doubled the amount of coffee purchased from him, from around 2,280lbs. to 4,564lbs.
But, given our current 50% market price bonus sourcing model, the additional premium Emiliano received from us fell from 54 to 46 cents. So, even as I gave to Emiliano a significantly larger bonus than last year's payout, it felt bittersweet that he was receiving less per pound than last year: the work was all the same.
Also, for what it's worth, the "fair trade" bonus his cooperative pays out to its farmers was documented on Emiliano's receipts: 25 Peruvian soles per "quintal" (101.40 pounds of coffee). This equals $0.07 cents per pound—which I find to be an insultingly-low amount.
Here, in February of 2019, I reiterate in no uncertain terms: something is very wrong with the way the coffee industry treats small-scale farmers, even though they grow 80% of the world's coffee. This sobering reality check from our meeting that day reinforces my knowledge that our cause is noble and our work is critically-important for farmers like Emiliano.
[The price of coffee] can't fall any lower, can it?