Producers want Starbucks to pay more for sustainable coffee

On an 80-hectare farm in Barra do Choça, in southwest Bahia, rural producer Idimar Barreto Paes Filho, 64, produces between 400 and 600 bags of Arabica coffee a year, following sustainable production rules, for which he receives a bonus.

This extra payment for complying with various sustainability parameters – land care, water management and decent work are some of them – needs to go up, demand producers and representatives of coffee growers’ associations in Bahia and Minas Gerais.

The bonus for sustainable production is currently between R$10, how much Starbucks, one of the largest coffee chains in the world, pays, and R$ 45 per 60-kilogram bag of coffee, they say.

The values ​​follow the world average, but Brazilian producers argue that local costs are traditionally higher and have risen by up to 50% in two years.

Sincal (association of coffee growers) says that Brazilian coffee growers have higher production costs than neighbors with labor issues, for example, which raise labor costs. Since 2020, the sector has also suffered from the increase in the price of oil and fertilizers, raising production costs between 30% and 50%, according to a June report by consultancy StoneX.

The bean produced by Paes Filho has received several awards over the years, the most recent being the 18th National ABIC Coffee Quality Competition – Origins of Brazil – Crop 2021, promoted by ABIC (Brazilian Association of the Coffee Industry).​

Sustainability, in turn, is guaranteed by the CAFE Practices certificate, which it obtained four years ago from Starbucks, and to whom Idimar Paes Filho sells most of its specialty coffees, always above 85 points.

Certified coffee is a requirement of major coffee buyers in the world, given the pressure from consumers for a coffee based on the principles of ESG, acronym in English referring to practices of respect for the environment, social responsibility and governance.

For Paes Filho, certification has not been enough to obtain greater gains from his coffee, contrary to one of the principles of ESG, which is fair trade.

Starbucks pays him BRL 10 for each 60 kg bag of grain as a bonus, in addition to the regular bag price, currently quoted at BRL 1,300. The bonus, says the producer, barely pays for an empty coffee bag, which costs R$8.

“A bonus of R$ 10 does not pay off. I am a producer of specialty coffees, and this has cost and takes time and a lot of work to get to the level of quality that these companies demand”, says the producer from Bahia.

In addition to Starbucks, other companies also pay bonuses for certification, such as Nestlé (R$15 to R$20 bonus) and JDE Coffee (between R$20 and R$30), according to the Brazilian Coffee Growers Association, Sincal, headquartered in Guapé, Minas.

Starbucks, for example, sells 250 grams of roasted coffee beans in its coffee shops for R$35, or R$140 per kg. According to producers, one kilo of coffee makes 133 cups of coffee, each with 7.5 grams of coffee.

The only ones that pay a more attractive bonus value to Brazilian producers, according to Sincal, are UTZ and Rainforest Alliance certifiers, both with R$45. Other smaller companies pay only R$1 or R$3 for coffees certified as sustainable and of proven origin, as more demanding markets desire.

President of Sincal, Armando Matiello says that “the certifications only serve for coffee traders to show customers and final consumers that they work with sustainable coffee, but the producer does not receive any support, he only has expenses”.

To have a sustainable coffee certification, based on ESG rules (acronym for best environmental, social and governance practices), the cost varies between R$ 120 thousand to R$ 150 thousand, depending on the certifier and the conditions of the rural property, informs Matiello.

President of Assocafé (Association of Coffee Producers of Bahia), João Lopes Araújo declared that “the certification does not add value that justifies achieving this quality, it is more in the marketing of the certifiers”.

In Luís Eduardo Magalhães, west of Bahia, coffee grower Augusto Blanco, certified by Starbucks three years ago, also wants better bonuses. “Above R$ 50 would be good”, says the producer.

On a farm that produces 30,000 bags of specialty coffee in Mucugê, in Chapada Diamantina (BA), a coffee grower who prefers not to have her name disclosed said she sought other markets to escape companies such as Starbucks, Nestlé and JDE.

“We have several certificates of organic, biodynamic, sustainable coffee, and we sell directly to coffee shops in the United States and other European countries. I don’t even want these companies on my doorstep”, he says.

In a statement, Starbucks and Nestlé did not comment on the bonuses given to producers. JDE Coffee was contacted but did not respond.

Despite criticism from coffee growers, Starbucks says it is “committed to sourcing coffee responsibly, for the good of people and the planet, as we work to empower farmers.”

Nestlé, in turn, declared that “it is the largest buyer of sustainable and certified coffee in Brazil” and works “ensuring transparency about the price paid to the producer and fair remuneration”, but did not comment on the bonus amounts paid.

The world’s largest coffee producer, Brazil exports the bean to 122 countries. United States (biggest consumer), Germany, Italy, Belgium and Japan are the biggest buyers. The main competitors are Vietnam, Colombia, Indonesia and Honduras.

In 2021, in general, 40.5 million bags were exported, with revenue of US$ 6.2 billion. By April 2022, 2,808,573 bags had already been exported, with revenue of US$ 3.1 billion.