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Fair trade is not doing enough for coffee – senior UN advisor Jeffrey Sachs

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MEDELLIN, Colombia – A small extra 5¢ in the final price of a cup of coffee, but directly paid to producers, would significantly improve their income, said world-renowned sustainable development expert Jeffrey Sachs (PICTURE) at the 1st World Coffee Producers Forum.

“We need to revisit mechanisms for making consumers pay a little bit more and producers receive a bit more. The idea of fair trade is not doing enough (…). It’s not generous enough and it doesn’t transfer enough,” he argued.

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Economics professor, senior adviser to the United Nations (UN) and bestseller author, Sachs is the director of the Center for Sustainable Development at Columbia University and the UN Sustainable Development Solutions Network.

Making simple calculations, Professor Sachs said that a pound of coffee gives about 25 cups of coffee. At a price of US$ 1.25 a pound, there is barely a 5¢ content of coffee per cup, which is the amount farmers receive.

While recognizing that there are implicit costs in the cup’s final price, Sachs noted that, if consumers paid an extra 5¢ a cup of coffee, farmers would receive twice what they are getting right now. “A small increment for consumers could mean a huge increment for the farmers. That is the idea of fair trade,” he said.

Sachs suggested that in high-purchasing power markets, such as the US or Europe, this small increment would not be detrimental to consumers, especially on a voluntary basis.

Sachs said that if consumption increased one cup per day, there would be a substantial increase in demand that would stimulate production and raise the international price.

When referring to the UN Sustainable Development Goals (former Millennium Goals), Sachs noted that coffee plays a fundamental role as a driving force of rural development and social welfare. Coffee is a key product in and of itself, he noted.

Finally, Sachs referred to the UN Sustainable Development Solutions Network as an example of fruitful alliances between producers, industry and academia to analyze common issues and find comprehensive solutions. In Colombia, the network is expanding with the support of institutions such as Universidad de los Andes.