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Revaluing Peasant Coffee Production:
Organic and Fair Trade Markets in Mexico

The emergence of significant new markets for organic and “fairly traded” products has been hailed as an important part of the effort to address the chronic poverty suffered by many small-scale coffee producers in the developing world. With 20-25 million producers around the world suffering from a prolonged crash in coffee prices, the premiums in these niche markets may offer a way out of crisis.

A new study of Mexican organic and Fair Trade coffee markets offers both hope and caution for these new market-based responses to the coffee crisis. In their new report, “Revaluing Peasant Coffee Production: Organic and Fair Trade Markets in Mexico,” researchers Muriel Calo and Timothy A. Wise, find that:

  • Organic coffee premiums are too low to adequately cover the 2-3-year conversion to organic production;
  • Fair Trade markets, with their guaranteed prices, can bring producers to profitability and are playing a crucial role in cross-subsidizing the conversion to organic production;
  • Even for producers with access to niche markets, coffee prices alone still fail to compensate producers for their labor and their social and environmental contributions.
  • Only a minority of producers are likely to gain access to niche markets, so government intervention in international coffee markets will be crucial to solving the coffee crisis.

While the study suggests that niche markets alone are unlikely to provide a comprehensive solution to the coffee price crisis, they have an important role to play in promoting more sustainable livelihoods and in beginning to revalue the environmental, economic, and cultural contributions of small-scale farmers in an increasingly global economy.

“Revaluing Peasant Coffee Production: Organic and Fair Trade Markets in Mexico” is available online at: http://www.ase.tufts.edu/gdae/Pubs/rp/RevaluingCoffee05.pdf

For more on GDAE’s Globalization and Sustainable Development Program:
http://www.ase.tufts.edu/gdae/policy_research/globalization.html

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