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An Action Plan to be developed with specific goals, the conduction of an independent study, and the creation of a Committee with wide representation of different links of the global coffee chain stand out among the final resolutions adopted by the Forum, which ended Wednesday.

Medellín, Colombia, July 12, 2017 (FNC Press Office)– The first World Coffee Producers Forum, which brought together representatives of the whole coffee value chain, concluded this Wednesday with a Final Declaration that includes an Action Plan to face common challenges, among other specific measures.

The Action Plan, to be developed co-responsibly by stakeholders of the global value chain and with the support of the International Coffee Organization (ICO), must set concrete goals, the time period to meet them, and the required funding.

This Action Plan must be based on the problems faced by coffee farming in different regions around the world, namely: low prices and excessive volatility for producers (with larger profits remaining in the other links of the chain), adaptation to climate change, scarce workforce, reduced generational change and producers’ precarious social conditions.

Taking into account the recommendations made in the Forum, the Action Plan will also be based on a study to be conducted by an independent body to analyze the behavior of coffee prices in the last 40 years, production costs in this same period, and their correlation.

The study will analyze if international coffee prices, both at the New York and London stock exchanges, reflect the reality of the physical market, and will present alternative solutions to the problems discussed in the Forum.

The Final Declaration resolved that a co-responsible commitment to implementing the Action Plan and funding it must be achieved at the highest level with representatives of the industry, donors, international cooperation, multilateral organizations, and national and local governments.

For the actions to be developed, a Committee will be formed, made up of two representatives of producer associations from African countries; two from Mexico, Central American and Caribbean countries; two from South American countries and two from Asian ones, and at least one representative of the industry in each of the following regions: North America, Europe and Asia.

The Committee shall submit a progress report in the next meeting of the ICO’s International Coffee Council, to be held in March 2018.

The next World Coffee Producers Forum will take place in 2019, and the Committee will coordinate its venue; aside from the resolutions, three countries so far have offered their territories to host the next Forum.

“We have just started a new process in the world coffee sector,” said Roberto Velez, CEO of the Colombian Coffee Growers Federation (FNC, the host organization). “Today we finished a reflection, assembling ideas, a process of listening to each other, but it is only the beginning of what we hope is a new stage.”

Velez even raised the possibility that this new way of understanding, collaboration and co-responsibility between producers and consumers, this new North-South relationship between developed and developing countries, may set the course towards a new global economic history.

Among the assumptions that gave rise to these resolutions are critical profitability and even losses for coffee farmers due to low international prices, low productivity, higher production costs related to climate change and variability, and rising labor costs, including harvesting ones.

This lower profitability has resulted in a significant percentage of coffee producers living in poverty or at least with lower quality of life (housing, utilities, education, health, etc.), and lower capacity to reinvest in their farms.

Without corrective actions to address these problems in a coordinated way and their financing, the world may face a structural reduced coffee supply, unable to meet the demand, which in turn will create undesirable imbalances in the coffee market that may put sustainability of the global chain at risk.

The spirit of the Final Declaration took into account the main conclusions and recommendations of the Forum, perfected with an active participation of delegates in thematic groups organized for their analysis and discussion.

The Forum was addressed by figures of international stature such as former US president Bill Clinton, University Professor Jeffrey D. Sachs, the ICO Executive Director, José Sette; the presidents of Colombia, Costa Rica and Honduras, the Vice President of El Salvador, agricultural ministers, and representatives of the whole coffee value chain, including, of course, producers.

The following is the Final Declaration:

The First World Coffee Producers Forum met in the city of Medellin, Colombia, on July 12, 2017, and considering that:

1. Profitability of coffee farming in many producing countries faces a critical situation, even going through periods of losses, due to different factors such as: lower international coffee prices, which have dramatically deteriorated the coffee trade terms (reducing the purchasing power of coffee growers), low agricultural productivity, increasing production costs related to climate change and variability, and rising labor costs of production activities such as harvest.

2. Lower profitability has led a significant percentage of coffee producers in the world to live in poverty, with deprivations in their quality of life (housing, utilities, delayed or poorly attended education, low access to health systems, etc.), and reduced ability to reinvest in their farms.

3. Even if development of specialty coffee in the last decades has generated some premiums to producers, these have not been enough to offset the costs associated with certifications, and the analysis of value of the global coffee chain shows that the share reaching producers is very low, in contrast to that remaining in the hands of traders, roasting companies, and distributors to final consumers.

4. If corrective actions aiming to address the aforementioned problems in a coordinated way are not undertaken and their financing is not guaranteed, in the medium term the world may face a crisis characterized by a structural reduction of the global coffee supply, with the consequent impacts on quality of life of producers and their regions’ social stability, while global demand will continue growing without being met, which will generate undesirable imbalances in the coffee market that may put sustainability of the global chain at risk.

Resolves:

1. To work co-responsibly with all stakeholders of the global coffee chain and the ICO’s support to develop an Action Plan that shall be based on problems faced by coffee farming in different regions of the world, namely: very low prices to producers and excessive volatility, the largest share of the chain value remaining in the other links; adaptation to climate change, scarce workforce, difficult generational change, and precarious social conditions for producers.

2. The Action Plan shall define the goals to be met, the time period to meet them, and the required funding.

3. A co-responsible commitment to properly implementing the Action Plan and funding it must be achieved at the highest level with representatives of the industry, donors, international cooperation, multilateral organizations, and national and local governments.

4. As starting point for the Action Plan and based on inputs of the first World Coffee Producers Forum, a study will be conducted by an independent body to analyze the behavior of coffee prices in the last 40 years, production costs in this same period, and their correlation. The study will analyze if international coffee prices, both at the New York and London stock exchanges, reflect the reality of the physical market, and will present alternative solutions to the problems discussed in the Forum.

5. For the actions to be developed, a Committee will be formed, made up of two representatives of producer associations from African countries; two from Mexico, Central American and Caribbean countries; two from South American countries and two from Asian ones, and at least one representative of the industry in each of the following regions: North America, Europe and Asia.

6. This Committee shall submit a progress report in the next meeting of the ICO’s International Coffee Council, to be held in March 2018.

7. The next World Coffee Producers Forum will be held in 2019. The Committee will coordinate with countries the venue of the next Forum.

This declaration is adopted in Medellin on July 12, 2017.