Fairtrade Coffee Honduras

Source: Fairtrade Foundation

With food prices rising globally we should be extremely concerned about how producers in low-income countries are weathering the storm

McDonald’s recently hit the headlines for putting up the price of its 99p cheeseburger after 14 years. It’s just the latest example of soaring prices on everyday items like tea and instant coffee – and we’re expecting more to come.

For consumers long used to low prices and facing a squeeze on incomes, this is painful, and many businesses are understandably reluctant to pass on costs. With margins already tight, it would be all too easy to cut sustainability budgets.

However, this would be short-sighted. Prioritising investment in global supply chain ethics is needed now more than ever. This is important for various reasons, apart from simply being the right thing to do. It helps ensure security of supply amid shocks to the system, which are going to be with us for some time yet. It drives customer loyalty – Fairtrade is a great example of that. And most crucially, when looking at long-term risks and ESG requirements, it can secure the livelihoods of the farmers and workers who grow our produce.

Food security matters to us all, of course. The UK imports 40% of our food, and around 15% from low-income countries. So we, as a nation of shoppers and traders, have a vested interest in a continuous supply of good quality imports.

And with food prices rising globally we should also be extremely concerned about how producers in low-income countries are weathering the storm. The news is not good: food price hikes have hit hardest in countries where average spend on food is already high. In Kenya food expenditure is 58.7% of income and rising, in Ethiopia it is 44.2% and in Ghana 41.6%, compared with the UK, which is at 7.9%. Fairtrade provides valuable protection to farmers in these countries because of its unique minimum price guarantee and its community premium, but even so they have been telling us that staples like bread, fertiliser and oil are rapidly becoming unaffordable. 

A farmer from India reported rice is now 20% more expensive, cooking gas has risen by 27% and transporting his crops to market now costs 15% more. It’s a similar situation across the world: in Peru, for example, there has been a rise in the cost of agricultural inputs like fertiliser, which has doubled in price. 

If farming doesn’t pay, there’s no guarantee producers will remain. We’ve seen the impact of this most starkly in coffee, where low prices, poverty and climate change have caused more Latin American farmers than ever to leave in search of better lives elsewhere. 

Many brands and retailers have put welcome investment into supply chains, whether through choosing certification, funding programmes or focusing on long-term sourcing relationships. But continued commitment is critical. People care about ethics and sustainability and are increasingly looking for companies to demonstrate purpose. CAFOD’s report on the values the public want to see from business revealed that “reliability, acting in a fair way and respect” were most important. 

The cost of living crisis is global and it’s most disastrous for the farmers and workers who have fewer resources – particularly those who have suffered from long-term low commodity prices, debts incurred during the pandemic and climate-related losses. If Covid has shown us anything, it is that we are all inter-connected.

Real partnerships between buyers and sellers are urgently needed to respond to this crisis. That starts with a commitment to paying a fair price, so communities can keep producing the goods we need, while also looking after their own farms and families.