Why is there such a big difference in the price paid to farmers and the price we pay for coffee in the store or in coffee shops?
Coffee changes hands many times between the coffee tree and a cup of coffee. In addition to the work of the farmer who grew and harvested the coffee, the beans are processed, dried, milled, sorted, bagged, transported to the port and from the destination port to the roaster where it is roasted, packaged, distributed and finally served. Each of these intermediary steps adds value and cost to the coffee that the farmer harvested. Cafés have additional costs just to serve the coffee: rent, labor, employee benefits, equipment and maintenance, etc., that all add to the final price of a bag or cup of coffee. The cost of coffee served in a café represents a relatively small percentage of its overall operational costs.
Despite this, farmers receive a disproportionately small percentage of the retail selling price of their coffee, given the costs of fertilizer and pesticides, their labor and the risks that they assume (weather, pests, volatile prices, etc.). In fact, most coffee farmers are earning less today than they were 25 years ago, when adjusted for inflation. At the same time, the price for a cup or pound of coffee has at least tripled during this same period. This imbalance is under scrutiny by the Specialty Coffee Association’s Price Crisis Response effort, Lutheran World Relief and Heifer International, among other organizations.