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Oxfam:  Farmers Face Economic Ruin as Coffee Supply Exceeds Demand - 2002-09-18

The international relief agency, Oxfam, says 25 million coffee farmers in 45 countries face economic ruin, as world coffee prices hit a 30-year low. The British-based charity is calling on governments and companies to destroy 300 million kilograms of surplus coffee stocks to bolster prices.

The Oxfam report paints a gloomy picture of the world coffee market, where supply exceeds demand by 550 million kilograms annually, and growers lose money on every coffee bean they sell.

According to Oxfam, farmers now receive 58 cents per kilogram of green coffee beans, while consumers pay $7.92 for a kilogram of roasted coffee. The markup goes to the middlemen who purchase, transport, roast, and sell the coffee.

Oxfam says coffee revenues in Central America fell by 44 percent between the years 2000 and 2001. During the same period, coffee earnings fell 42 percent in Ethiopia, and 30 percent in Uganda.

Phil Bloomer is director of advocacy for Oxfam International. In a VOA interview, he explained how the drop in earnings has affected millions of coffee growers and their families.

"We are seeing, throughout our programs now, hunger, families taking their children out of school, unable to buy the basic medicines they need to cure simple illnesses," he said.

Mr. Bloomer says the world's four biggest coffee companies, Kraft, Nestle, Proctor and Gamble, and Sara Lee, are putting profits over people.

"They cannot preside over vast human misery at the bottom of their supply chain," Mr. Bloomer said. "They have to start acting, and acting now to make this market work for poor people as well as themselves."

The companies deny they are exploiting poor farmers, and spokesmen say they want to work with groups like Oxfam on solutions.

Richard Johnson is European corporate affairs director for Kraft Foods, International. He tells VOA his company is acting responsibly.

"For many years we have had projects and programs in many coffee-growing countries where we provide education, technical assistance, investments, to improve coffee quality, to ensure the farmers understand how to get the best out of their commodity, and in many countries, to improve market access."

Oxfam and the coffee companies agree on some steps to take. They would like to stimulate more demand to ease the oversupply of coffee. And they advocate programs to help coffee growers diversify into other crops.

The issues will be debated further when the London-based International Coffee Organization meets next week.