The median annual income of coffee farmers in the East African nation of Ethiopia is approximately US1,800.Independentstudiesestimatethatasustainable,decentlivingincomeforatypicalfarminghouseholdintheseregionsisclosertoUS 1,800. Independent studies estimate that a sustainable, decent living income for a typical farming household in these regions is closer to US\,1,800.Independentstudiesestimatethatasustainable,decentlivingincomeforatypicalfarminghouseholdintheseregionsisclosertoUS4,500. This disparity is particularly stark for independent growers operating outside certified fair-trade cooperatives.
Global green coffee bean prices dropped by nearly 30% over the course of 2021. Smallholder farmers bear almost all of the price risk associated with this market volatility, while multinational roasters and global coffee chains maintain strong profit margins.
Development agencies have tried to address this through agricultural upgrading. The current average yield of Ethiopian coffee smallholdings is less than 40% of their capacity. Enhancing yields through technical training, organic fertilizers, and targeted irrigation could significantly increase output. Additionally, smallholders are encouraged to diversify by cultivating high-value spices like cardamom or introducing honey production, reducing their dependency on a single cash crop.
However, merely doubling yields is unlikely to bridge the income gap entirely, and raw commodity diversification faces local market saturation. Structural changes to the retention of value at the source point remain crucial.
Using the information in Extract A, examine two ways, apart from cooperative Fairtrade networks, in which coffee farmers could boost their incomes despite the falling global price of coffee.
