Coffee Prices and Columbia

You may not have heard about this, but there has been a strike in Columbia for a couple of weeks now by coffee farmers demanding better prices for their Arabica beans. Arabica beans are the higher quality beans most of us drink everyday in our cups. Robusta is seen as an inferior bean. The problem is what farmers are being paid for coffee.

From a recent Financial Times article:

Arabica prices have plunged in the past 18 months are are fluctuating around $1.40 per pound. That compares with the unusually high 2011 average of about $2.55 a pound, and $1.76 a pound last year.

To off set the lower prices, the Columbian government has subsidized the coffee industry. Farmers are paid around $266 per sack of coffee. A sack of coffee equals approximately 132 pounds of coffee. According to The Columbian Coffee Growers Federation it costs $366 a sack to produce the coffee. If true, that is a significant hardship for coffee growers.

Let's think about this for a moment. Let's say you go to Intelligentsia Coffee and buy a 12oz (.75pounds) bag of coffee for $18. You just paid $18 for not even a full pound of coffee. The farmer is being paid on average $1.40 a pound for coffee. 

Now I understand the coffee has to be transported to the U.S., housed, shipped, roasted and marketed. Seems to me though, a fairer price needs to be negotiated with the farmer. We know that fair trade has made some headway in this, but obviously it isn't enough. 

Now there have been violent outbusts in Columbia with protestors and farmers. The strike will be ending this week, but what will have been gained by it. By reporting this, I hope more people will really think about what is going into their cup of coffee.

Charlie