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Coffee crisis – Ethiopian gives first hand account


For Immediate Release – Thursday April 29 2004

Coffee crisis – Ethiopian speaker to give first hand account

Ato (Mr) Tadesse Meskela Gudeta, agricultural economist and manager of the Oromiya Coffee Farmers’ Cooperatives Societies Union in Ethiopia, will feature in a speaking tour around New Zealand as part of Fair Trade Week – a joint initiative between Oxfam New Zealand and Trade Aid, with the support of NZAID. Ato Tadesse will give a first hand account of the worst ever coffee crisis that is affecting 25 million farmers and their families around the world.

The fair trade tour starts in Dunedin on Monday May 4, then moves to Christchurch on Tuesday, May 5, Wellington on May 6 and Auckland on May 7.

“The price paid for coffee is now at a thirty-year low and small farmers are unable to cover the costs of production. They cannot earn the income necessary to feed their families, send their children to school, buy essential medicines and stay on their land. The coffee crisis is affecting 25 million producers in large parts of Africa, Asia and Latin America,” says Ato Tadesse.

Ato Tadesse has been involved in the coffee industry for many years and his organisation, a certified fair trade producer, comprises 34 cooperatives and 23,000 members. Ato Tadesse will be speaking at public forums and with coffee industry groups about the coffee crisis and how it is affecting coffee farmers in Ethiopia, the birthplace of coffee. He will also talk about the vital importance of fairly traded coffee in providing as opportunity for consumers to be able to support producers.

“Coffee is the nucleus of the Ethiopian economy. Coffee accounts for more than 50% of Ethiopia’s exports, 95% of which is grown by small farmers. About 700,000 households are dependant on coffee and another 15 million are partly dependant on coffee for their livelihoods,” says Ato Tadesse.

“While consumers in rich countries like New Zealand are paying $3 for a cappuccino, the grower is getting only three cents,” said Barry Coates, Executive Director of Oxfam NZ. “The corporate giants, Sara Lee, Proctor & Gamble, Nestlé and Kraft, who purchase half the world’s coffee crop, need a sharp reminder that the people who enjoy drinking their coffee also care about the livelihoods of the people who grow the crop. “

“Coffee drinkers can help by buying fair trade products and by persuading their places of work, local councils, supermarkets and cafes to stock Fair Trade products, starting with coffee,” said Geoff White, General Manager of Trade Aid Importers.



Killer Facts on Trade


- 25 million coffee producers facing crisis in Central and South America, Africa and Asia; in total 100 million poor people dependent on the coffee industry are affected.

- The price of coffee has almost halved in the past three years to a 30-year low. The value of coffee exports has fallen by $US 4 billion in the past five years.

- Most producers –chiefly small landholders – now sell their coffee for less than it cost to produce.

- When you pay $3 for a cappuccino, the coffee farmer doesn’t even get three cents.

- The big four coffee roasters, Kraft, Nestlé, Procter & Gamble, and Sara Lee, each have coffee brands worth $US 1bn or more in annual sales. Together with German giant Tchibo, they buy almost half the world’s coffee beans each year.

- Their profit margins are high: Nestlé’s profit margin on instant coffee was estimated at 26% in 1999; Sara Lee’s is estimated at nearly 17%.

Ethiopia and coffee

- Ethiopia is credited with being the birthplace of coffee. It is Africa’s leading producer and exporter of Arabica coffees, the finest type of coffee bean in the world.

- Coffee accounts for more than 50% of Ethiopia’s exports, generating vital income and foreign exchange.

- 95% of Ethiopia’s coffee is grown by small-scale farmers many of whom have farms less than 0.5 hectare in size. About 700,000 households are dependant on coffee, another 15 million are partly dependant on coffee for their livelihoods.


- Fourteen million people are directly involved in cocoa production.

- Cocoa farmers get barely 5% of the profit from chocolate, traders and the chocolate industry get 70%.

- Most of the world’s cocoa is grown in desperately poor countries in West Africa, where cocoa exports can account for up to 40% of the country’s export revenues.

Fair Trade – the British experience

- Ten years ago, Fair trade sales in Britain were less than ₤3 million. This year, they will top ₤100 million ($NZ 270 million).

- There has been a doubling of sales figures in the last two years alone, so clearly things are accelerating.

- Fair trade coffee now has 15% of the market for both ground and instant coffee.

- Supermarket chains are now embracing the concept wholeheartedly, launching their own fair trade brands.

- There are now 180 different lines of fair trade products available, including coffee, tea, chocolate, bananas and other tropical fruit, snack foods and so on.

- Cities, towns, universities, businesses and government departments are all now signing up to fair trade, responding to campaigning by Oxfam and its NGO allies and a growing public movement that is choosing to support fair trade producers.

The Fair Trade success story can happen in New Zealand. It can happen fast, by piggybacking off the success in Britain and the rest of Europe. All it will take is a commitment from consumers to demand Fair Trade.

More Facts about the Rigged Rules of International Trade

The crisis in tropical commodities like coffee and chocolate is just one aspect of the way the international trading system is failing the poor. Oxfam’s Make Trade Fair campaign is also working to address other injustices:

- Rich countries subsidise their farmers to the tune of US$1bn per day. This costs developing countries US$100bn a year - more than double what they receive in aid.

- 10 million West African people are directly dependent on cotton farming. They are being forced to the brink of ruin by the massive subsidies paid to US cotton agri-businesses – almost $US 4bn per year.

- Restrictions on Mozambique’s sugar exports to the EU cost the country nearly $US 100 million each year – virtually equal to what that country gets from the EU in aid.

- Trade taxes paid by Bangladesh when exporting to the US are fourteen times higher than those paid by France, in spite of the fact that French incomes are fourteen times higher than Bangladeshi incomes.

- The ability of big brand clothing companies to get their garments made anywhere in the world is fuelling a race to the bottom, causing atrocious conditions in clothing factories across the developing world, such as 45 hours of forced overtime per week (see Oxfam’s report “Trading Away Our Rights” for other examples).

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