ShareTrade is an innovative sourcing model and is a response to the on-going challenge of low prices facing many of the 25 million smallholder coffee farmers around the world.
Despite the boom in global coffee consumption over the last twenty years, green coffee prices have been falling in real terms. Coffee prices today are not only volatile and unpredictable, they barely cover farmers’ costs. This is causing sustained hardship to farming families; social provision which we take for granted such as schooling, healthcare and pension is unaffordable. We believe it is unacceptable that citizens in developed countries should be enjoying high priced coffee everyday, while farmers suffer to produce it.
The ShareTrade solution
The first principle of ShareTrade is that farmers deserve a bigger share of the price that the end consumer is prepared to pay for a cup of coffee; and only with a bigger share of the price can smallholders become economically and environmentally sustainable. This is what we call the ‘right price’. We believe that a farmer who works extremely hard in a tough environment to produce high quality coffee for us, deserves an income commensurate with that effort - one that is competitive with the manual labour of a city dweller; and should be able to contribute towards a social benefits scheme.
We also believe that a farmer should be given the opportunity to manage their farm as a proper business with access to professional advice to ensure that the farm is capable of becoming economically and environmentally sustainable, and not just a subsistence operation. We call this ‘farm transformation’. This typically encompasses improvements in quality, yield, and environmental performance; it may also necessitate additional land rental or purchase to ensure the smallholding is of a sufficient size. The resulting plan will often require some investment in the farm (such farm financing is currently not available to individual smallholders because they are a high credit risk). We believe smallholders should have access to finance, be able to take out low interest loans for their farms and be responsible for, and capable of, repayment.
Bean Capital are able to offer ShareTrade coffee through our partnership with Chimney Fire Coffee, a speciality roaster and UK leader in ethically-sourced sustainable coffee. It is thanks to their partnership with Big Rock Coffee Company who developed the ShareTrade concept that we are able to bring it to you.
ShareTrade’s five key principles according to Big Rock Coffee Company:
#1. We build long-term, direct relationships with each farmer. We cannot put in place transformation plans that may take 5-10 years to achieve without this level of relationship. We must build true relationships built on trust, honesty and hard work.
#2. We buy the coffee directly from the farmer, paying the right price as determined not by the market price, which has failed farmers in the past, but by #3, 4, and 5.
#3. We ensure the farmer can earn 1.5x the national living wage and contribute to a social benefits scheme covering education, health and pension needs.
#4. We work with the farmer to create a farm transformation plan capable of making the farm economically and environmentally sustainable.
#5. We provide access to expert agronomy advice and financial loans to ensure the farmer can implement the plans and course correct as necessary.
ShareTrade in practice
With market prices fluctuating around $1.20/lb of green coffee (Colombia), emergency measures are being discussed between coffee grower federations and governments to step in with emergency relief measures for farmers. The Fairtrade premium for those smallholders who belong to a cooperative and have been FT-certified, will help by guaranteeing $1.40/lb (plus a $0.20 social premium to the coop). There is a farm transformation plan in place with José and Luz in Colombia who receive $2.70 per lb. The current market price equates to farmers earning around 3-4p per cup of coffee sold in the UK. ShareTrade ensures our farmer partners are receiving double that – a price that guarantees both an equitable and viable income and sets in motion a transformation that will ensure a sustainable future livelihood.