Coffee, fairtrade and rwanda


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A look at how the world coffee trade affects coffee producers in Rwanda, and the inside story on how coffee is grown.

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Coffee, fairtrade and rwanda

  1. 1. <ul><li>Coffee </li></ul>& Rwanda Fairtrade By Jonathan Penson
  2. 2. But when you buy a cappuccino in the high street, how much of the price you pay do you think goes to the person who produced the coffee beans? We all enjoy a coffee when we’re out shopping.
  3. 3. 0.05% The actual figure is… (This is the percentage that a Rwandan coffee producer gets from the average price charged for a cup of coffee in a Western country.)
  4. 4. <ul><li>why is this figure so low? </li></ul>Surprised? Do you think it’s fair? This presentation looks at: <ul><li>what effect does it have on the producers? </li></ul><ul><li>what can we do about it? and </li></ul><ul><li>where does coffee come from anyway? </li></ul>
  5. 5. Rwanda Rwanda is a small country in Africa, about the size of Wales.
  6. 6. It has active volcanoes along its borders with Uganda and Congo. This volcano is Nyiragongo, by Lake Kibuye in the west of Rwanda. Because of Rwanda’s good rainfall, there are many lakes.
  7. 7. Rwanda’s famous mountain gorillas live on the lush slopes of the volcanoes.
  8. 8. The fertile volcanic soil and plentiful rainfall mean that crops grow well. The crop growing around this typical Rwandan village is sorghum, one of the staple foods of Rwanda. It can be made into porridge and beer.
  9. 9. With such good conditions for growing food, 90% of Rwandans are subsistence farmers.
  10. 10. Agriculture supports a very dense population.
  11. 11. But look at this photo. What is happening? People are being forced to cultivate land which is too steep. This causes the erosion in the photo. This shows that the farmland no longer produces enough to feed people, so they have to farm less suitable land.
  12. 12. <ul><li>Global warming means rain in Rwanda is less reliable. </li></ul>Why is this? This means: In January 1994, the World Food Programme warned that 800,000 people were at risk of starvation in Rwanda. Remember that date and the number of people. <ul><li>Global dimming means less rain. </li></ul>
  13. 13. Make the land profitable – grow cash crops like coffee and use the money to buy food. So if your land does not provide enough food, what can you do? Look at this photo of a Rwandan coffee packet. See how important coffee is to Rwanda. Look at the man’s shoes. Not many people in Rwanda own shoes.
  14. 14. Up to 75% of Rwanda's foreign exchange earnings came from coffee. Rich countries and poor countries made an agreement in the 1950s through the United Nations, called the International Coffee Agreement. This gave producer countries quotas of coffee they were allowed to sell. Because the amount of coffee on the market was controlled, the price was stable. Coffee used to give Rwanda a good income.
  15. 15. But look at this graph: It shows the price of 100kg of coffee between 1997 and 2003.
  16. 16. <ul><li>In 1989, the United States government, under pressure from multinational companies, refused to re-sign the International Coffee Agreement. </li></ul>What happened? Without US support, the Agreement ended. The Rwandan economy collapsed within months. More coffee came on to the market, and the price dropped.
  17. 17. <ul><li>Prices reflect supply and demand. If there is more of a product than people want to buy, the price falls, to encourage people to buy more. If people want to buy things which are in short supply, they will pay more for them. </li></ul>This is true of coffee. When less coffee is produced, the price goes up. But this means coffee growers will produce more coffee, to take advantage of the high price. Thus production goes up, and the price falls. This means that prices go up and down.
  18. 18. This graph shows the relationship between the amount of coffee produced in Rwanda and the price farmers get for it.
  19. 19. Some economists say that the price cycle is inevitable: prices will always go up and down.
  20. 20. But if we look at the trend of the price, we can see that, over the years, it is falling.
  21. 21. The average price paid to producers has fallen because the power of the coffee buyers has increased. They are so powerful that they can influence the US government, which is one of the reasons it stopped supporting the International Coffee Agreement.
  22. 22. <ul><li>Nestl é </li></ul><ul><li>Phillip Morris </li></ul><ul><li>Procter and Gamble </li></ul><ul><li>Sara Lee </li></ul>4 companies dominate the world coffee market: Coffee is the second-biggest commodity by value in the world. How can companies influence the US government?
  23. 23. <ul><li>Nestl é </li></ul><ul><li>Phillip Morris </li></ul><ul><li>Procter and Gamble </li></ul><ul><li>Sara Lee </li></ul>4 companies dominate the world coffee market: Coffee is the second-biggest commodity by value in the world. How can companies influence the US government? Almost every brand name you see on the supermarket shelf is owned by them.
  24. 24. Nestl é and Phillip Morris alone control half of world coffee trade. That gives them enormous power.
  25. 25. So if you are a poor coffee farmer, you have to accept the price offered to you by the major companies. If you don’t, who else are you going to sell your coffee to? That lowers the price of coffee. Nestl é and Phillip Morris alone control half of world coffee trade. That gives them enormous power.
  26. 26. <ul><li>The average wage in the UK is </li></ul><ul><li>£447 a week </li></ul><ul><li>The average wage in Rwanda is £122 </li></ul><ul><li>a year </li></ul><ul><li>Nestl é ’s net profits are £112 </li></ul><ul><li>a second </li></ul>
  27. 27. <ul><li>That’s £3,534,579,439 a year. </li></ul><ul><li>Or quadruple the entire national wealth of Rwanda. </li></ul><ul><li>Rwanda has debts of over £717,750,000 – it had to borrow money to pay for its imports when the price it got for its coffee exports collapsed. </li></ul><ul><li>21% of its income is spent servicing its debt, </li></ul><ul><li>quadruple what it is able to spend on health. </li></ul>
  28. 28. Has the price of coffee in the shops dropped? <ul><li>Us! </li></ul><ul><li>Returns on our investments and shares </li></ul><ul><li>Interest on our bank and building society accounts </li></ul><ul><li>Into our pension schemes </li></ul><ul><li>Lower taxes – if companies make greater profits, which are taxed, we have to pay less personal tax. </li></ul>No! So where do the profits go?
  29. 29. <ul><li>What happens when you can’t grow enough food and you don’t have money to buy food? </li></ul>When there is not enough food in the country to feed everyone?
  30. 30. Between April and June, 1994, 800,000 people were killed in the genocide in Rwanda. The photograph was taken at a school in the south of Rwanda where about 20,000 people were killed. The site is now a memorial to the genocide. Some of the clothes of those killed have been hung up here in the school’s assembly hall, so that no-one can deny what happened and so people will remember.
  31. 31. The reasons for the genocide are numerous and highly complex – perhaps they will never be fully understood. But it is generally agreed that the perceived pressure on the land and the economic collapse were two of the factors that contributed to it and that perhaps the genocide might not have happened without these factors. One of the things that the people who killed were told was that the people they killed would take their land.
  32. 32. But Rwanda today is about a lot more than the genocide.
  33. 33. The schools are once again full of students. The churches are again full of people singing. The country is being re-built. 2003 2004 The capital, Kigali The children of Rwanda are smiling once more.
  34. 34. <ul><li>What do Rwandan coffee producers do for their 0.05%? </li></ul>Now let’s look at this question:
  35. 35. These are members of a coffee-producing co-operative in Kibuye Province. A coffee tree takes four years to come to fruition; during that time, it must be weeded and mulched – it’s very labour intensive.
  36. 36. The coffee cherries which contain the beans don’t all ripen at the same time, so every day people must return to the trees to pick the ripe cherries – again, very time-consuming.
  37. 37. Once picked, the skins of the cherries are removed by hand, and the beans are washed.
  38. 38. Most Rwandans get their water from the lake or river, so the water to wash the beans must be brought up in these 20 litre jerry cans.
  39. 39. After the cherries are washed, they are dried. It takes about two days to remove the skins from enough cherries to fill the basket. The basket will then be carried by hand to the nearest coffee buying post. It weighs about 30kg, and will bring about 20p.
  40. 40. Being so labour-intensive, everyone must get involved, even the youngest children, so they can’t go to school.
  41. 41. <ul><li>Why do you need money if you grow your own food? </li></ul>
  42. 42. Most children in the UK get diarrhoea in their lives. Imagine what it is like in Rwanda, where the water comes from lakes and rivers and there are almost no toilets. Diarrhoea is cheap and simple to treat – in the UK the medicine is free. There is no National Health Service in Rwanda. You must buy your own medicines. If you cannot afford the few cents for medicine, you die. If you do not treat diarrhoea, you dehydrate. Eventually this kills you.
  43. 43. <ul><li>6,000 children globally die of diarrhoea </li></ul><ul><li>every day. </li></ul><ul><li>In Rwanda, 20% of children don’t reach their 5 th birthday. </li></ul><ul><li>10% don’t reach their 1 st . </li></ul><ul><li>One of the biggest killers is diarrhoea. </li></ul>
  44. 44. Even if you grow your own food, you still need money. How old do you think he is? He is actually 15. He is very small for his age. This child cannot afford even second-hand clothes, and wears plastic bags instead.
  45. 45. <ul><li>29% of children in Rwanda are clinically underweight. </li></ul><ul><li>43% will have their growth stunted by malnutrition. </li></ul><ul><li>50% of people in the UK are clinically overweight. </li></ul><ul><li>23% of people in the UK are clinically obese. </li></ul>
  46. 46. Look at the photographs of Beatrice and Seraphina. Who do you think looks richer? Why do you think this? What do you think causes the difference in their wealth? Beatrice Seraphina They both work for Rwandan co-operatives which produce coffee.
  47. 47. Beatrice is 43 years old, and would like you to know that she considers herself to be very poor. She says she cannot afford to buy clothes or medicine, or to mend the leaking roof of her house. She finds it very difficult to afford to send her children to school. Beatrice is a coffee grower who works in a co-operative. She says she feels powerless in the face of the falling price of coffee. She also says that when you see how poor she is, you will pay a fair price for coffee.
  48. 48. <ul><li>Life expectancy in the UK is 81 years </li></ul><ul><li>- and rising. </li></ul><ul><li>In Rwanda it is 39 years </li></ul><ul><li>- and falling. </li></ul>
  49. 49. Seraphina’s greater income means that her diet is better, that she can buy nice clothes, that she has the time to have her hair done and the extra cash to buy some modest jewellery. Seraphina works in a Fairtrade co-operative. Seraphina also works for a coffee co-operative. Did you think she is richer or poorer than Beatrice? Seraphina has a greater income than Beatrice because the type of co-operative she works in is different.
  50. 50. Fairtrade means: that coffee growers can have the confidence to invest in their own future and be able to work their own way out of poverty. Fairtrade is an agreement between coffee sellers and buyers. It bypasses the big multinational companies. <ul><li>long term commitment to buy </li></ul>Guarantees a better deal for Third World Producers <ul><li>guaranteed minimum prices for producers – up to 3 times more </li></ul><ul><li>premium for community support e.g. health and education </li></ul><ul><li>commitment to protect human rights and the environment </li></ul><ul><li>certification and training </li></ul>
  51. 51. Abahuzamugambi Co-operative ‘ working together to develop ourselves’ Seraphina works in the in Maraba, Rwanda.
  52. 52. The story of Abahuzamugambi’s coffee starts with the flowers in August. Sadly, they don’t smell of coffee.
  53. 53. By May the next year, the coffee cherries are ripe to be picked.
  54. 54. Then the cherries are brought to the co-operative. Here, the cherries are being checked by (left to right), the grower, the president of the Co-op, Oswald, and Olive, who’s in charge of selection.
  55. 55. Then the cherries are weighed by Alexis.
  56. 56. Then they are put into water. The best quality cherries are the densest, so any that float are taken out. Because Rwanda is quite cool due to its altitude, the cherries grow slowly, which makes them denser. There is a natural enzyme on the surface of the cherry which eats the sugar in the skin, fermenting it; this affects the flavour later on, so has to be controlled very carefully.
  57. 57. Still in the water, the cherries then have the skins sloughed off by these machines. Each cherry has two beans inside.
  58. 58. The beans then go into this water slide. It has a gentle gradient – 1 degree. The densest beans settle first; the lighter are carried further by the current. This ingeniously automatically grades the beans.
  59. 59. The beans are then washed 5 times in clean spring water… … until they squeak like a little tree frog when rubbed.
  60. 60. By this stage the beans have been through a lot, so they are laid out to rest in the shade for a day.
  61. 61. Then they are laid out in the sun for two weeks to dry, being constantly turned by hand to ensure they dry evenly. The skins are now crisp, and the beans are known as ‘parchment’ coffee.
  62. 62. The beans are checked by hand again (by Seraphina) then this skin is removed by a machine, operated by Cansius. The beans are now what is called ‘green’ coffee.
  63. 63. After a final hand check, the beans are sacked up ready for export.
  64. 64. In London, a company called Union Coffee Roasters roasts the beans. Here, Steven is hand-roasting the beans. The coffee is then ground and packaged.
  65. 65. Here you can see the three stages of coffee: parchment green roasted
  66. 66. And here is the final product, on the supermarket shelves.
  67. 67. Coffee was first grown in Africa. Here, it is being brewed in a centuries-old ceremony in Ethiopia. Thus there is a link between the trendy coffee lifestyle of today and the African coffee story.
  68. 68. There is also a very direct link between our enjoyment of cappuccinos in coffee bars like this one in Kampala to the people who grow the coffee.
  69. 69. Jean-Marie Vianney is one of those people. With the extra income from Fairtrade, he has been able to build a house, diversify his farm, invest in more coffee trees, buy clothes for his wife and send his children to secondary school. But he still couldn’t afford to drink coffee.
  70. 70. So Abahuzamugambi bought the equipment necessary to roast, grind and brew coffee. This enables growers to improve the quality of the coffee, as they can taste the difference.
  71. 71. And coffee farmers can now get training at the new education centre in the village.
  72. 72. The success of the co-op has improved life for others in the community. This new bank – the first in the village – was built for the co-op, but everyone can use it.
  73. 73. The co-operative has even opened a cyber-café in the village which everyone can use.
  74. 74. And it doesn’t stop there. If one co-operative in an area pays higher prices, the other coffee buyers will have to pay more too, otherwise no-one would sell them their coffee. So Fairtrade forces other companies to pay better prices. Look at the changes Stanley has managed to make to his house in Uganda, where a non-Fairtrade company has been paying higher prices.
  75. 76. Many people are learning of the benefits of Fairtrade. This is an article about the co-op which appeared in an Italian newspaper.
  76. 77. This is another article about the co-op:
  77. 78. This is another article about the co-op: As you will see, its message is rather different….
  78. 79. “ FROM her smallholding in southern Rwanda, Beneconcille Murekezi pro - duces enough green coffee beans to ensure her three children get to school each day. That is some achievement, as Rwanda tentatively recovers from geno - cide 10 years ago. As a member of a cooperative which sells coffee beans to a UK firm, Union Coffee Roasters, Murekezi, 38, is in a perilous position. In fact, she is in a poverty trap. There is a ceiling through which real improvements to her life and community cannot break through. Murekezi and thousands of her co­operative colleagues would like to process all the beans rejected by Union Coffee Roasters to produce their own roasted coffee. Micro bank loans would enable the co-op to invest in new machinery. But under arcane world trade rules known as tariff escalation, Murekezi's co-operative cannot 'add value' to their beans without incurring punitive financial penalties that would make the whole project unviable. ”
  79. 80. Why can’t Abahuzamugambi continue their success by exporting processed coffee rather than just green coffee? Why aren’t they being allowed to work their way out of poverty? So, what’s going on?
  80. 81. Which of these brands of instant coffees do you recognise? If you live in a developed country, you probably only recognise Nescaf é. All these coffees, including the Nescaf é, were bought in an African supermarket.
  81. 82. So, how come you can buy Western instant coffee in Africa but you can’t buy African instant coffee in the West? Nescaf é comes from Switzerland, Dormans from Kenya, Star from Uganda and Africafe from Tanzania.
  82. 83. <ul><li>There is much more profit to be made from processed goods like instant coffee than raw commodities like green coffee. So rich countries do everything they can to stop poor countries from selling processed goods. They do this to protect their own manufacturers. So: </li></ul><ul><li>Canada charges Kenya 12 times more to import processed coffee than raw coffee. </li></ul><ul><li>On average, rich countries charge poor countries tariffs (import taxes) which are 4 times higher than they charge other rich countries. </li></ul><ul><li>Aid rules have made it effectively illegal for poor countries to charge their own tariffs. </li></ul>
  83. 84. There are other, ‘non-tariff’ barriers to poor countries selling processed goods. Star coffee wanted to sell its ground coffee in Europe. The European Union said that Star had to modernise its packaging. The new packaging equipment required would have cost Star 7 years ’ turnover. And the equipment would come from Europe.
  84. 85. <ul><li>3. Infrastructure: </li></ul>If it’s so difficult to make a living from coffee… Why not grow something else? 1. Commodity market: Growers have spent a lot of capital and labour in their coffee plantations, and it’s what they know how to grow. 2. Investment: It’s the same for almost all things that poor countries produce – sugar, cocoa, tea… If you grow something else, there is nowhere to sell it locally and no way to get it to market.
  85. 86. <ul><li>Fairtrade proves that trade can be fair and profitable. </li></ul>And anyway: sign in Uganda
  86. 87. Fairtrade’s great! footballs, rice, skirts, mango chutney, red wine, cashew nuts, penne pasta, T shirts, Christmas puddings, Belgian chocolates, muesli, Easter eggs, trousers, sugar, furniture, shoes, mats, spices, sneakers, jewellery, mint sweets, jigsaws, greeting cards, Earl grey tea, biscuits, shirts, bags, choc chip cookies, cocoa powder, white wine, bananas… What can I buy? Where can I buy it? Oxfam, Co-operative supermarkets, your local Fairtrade shop, church groups, supermarkets, charity shops, mail order, the internet…
  87. 88. <ul><li>Tell the shops you buy things from that you want a Fairtrade alternative – they do act. </li></ul><ul><li>Write to your MP and party leaders: tell them to change the trade rules. </li></ul><ul><li>Change your bank to an ethical one, and pressure your pension company to invest ethically. </li></ul><ul><li>Reduce your carbon footprint - USE LESS STUFF! And save energy! </li></ul><ul><li>Buy Fairtrade… and tell your friends! </li></ul>What can I do?
  88. 89. Download the accompanying booklet to this presentation free at… For more information:
  89. 90.
  90. 91. <ul><li> </li></ul><ul><li>Campaign for trade justice, debt relief and better aid. </li></ul><ul><li> </li></ul><ul><li>Advocacy for fairer trade rules. </li></ul><ul><li> </li></ul><ul><li>Ethical and green high street banking services. </li></ul><ul><li> </li></ul><ul><li>Ethical investment advice. </li></ul><ul><li> </li></ul><ul><li>Film about the world coffee trade, Starbucks and Ethiopian coffee. </li></ul><ul><li> </li></ul><ul><li>The Rough Guide to a Better World, according to the UK’s Department for International Development… </li></ul>Websites:
  91. 92. “ As a global community, we sink or swim together… It is precisely because parts of the developing world are cut off from the rising wealth generated through trade that some of them feel desperate. We should not be so surprised that such despair at the inequalities in wealth fosters anger and social tension – the kind, it must be admitted, which might even undermine global security and create the conditions in which terrorism can emerge.”
  92. 93. <ul><li>Written by Jonathan Penson [email_address] </li></ul><ul><li>Photography by Annie Chamberland, Rob Denton, Sara Edström, Julia di Mambro, Jonathan Penson, Jeremy Torz and VSO Media Unit – </li></ul>& Coffee Fairtrade Rwanda
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