102. Rainforest Alliance' Living Wage Benchmarks Report

 Feb. 22, 2021

"Read the fine print and you might find a gold mine!"

Those were my thoughts last week after receiving a seemingly administrative email from Rainforest Alliance to Partners, (my company Artisan Coffee Imports is one of them). The email was sharing updates to the Rainforest/UTZ license agreement. As I skimmed through the long text with fine print, the words "Living Income" caught my eye, then a link to this version 1.1 document, "Annex S10: Living Wage Benchmarks Per Country."  A goldmine!

I checked with some Rainforest contacts, and indeed, this report is the end result of years of collaboration with the Global Living Wage Coalition (GLWC). Rainforest has also worked with the Living Income Community of Practice (LICP), two pre-competitive groups focused on improving living wages for smallholder farmers of commodities, including coffee farmers.

The GLWC and LICP both utilize a seminal 2017 Manual by Richard Anker & Martha Anker on living wage reference values, "Living wages around the world: Manual for measurement." The manual is an open-access document with 20 chapters, and each chapter can be downloaded as a .pdf. To do this for 29 countries is clearly a ton of work, and Rainforest and the GLWC coalition have done this for us - that is the goldmine!

As the image to the left shows, the Rainforest document gives partners a simple table with 52 countries listed alphabetically, (we only show the first 25 lines here). For many of these countries, it only says "applicable wage", which means they don't have the benchmark for this country calculated yet. But for 29 countries on the list, including many of the prominent coffee producing countries, a benchmark monthly gross wage in local currency is given. If such a list exists elsewhere, I haven't seen it.

How can this be used? Now as a coffee buyer, I can ask my supplier what is the price the farmer is paid in local currency for his/her coffee product (parchment or cherry), and I will understand a lot more about how much coffee is really helping this individual and their family achieve a sustainable livelihood. Or I can ask how much the workers at the washing station, or the pickers on the estate are paid, and again, understand whether they have a shot at living off of those wages. For example, the living wage benchmark for Rwanda in the table is RWF 147,111 p. month. I know that in some areas rural workers are paid RWF 1,000 or 1,500 per day. Clearly, even working 30 days a month is not going to get this rural worker even close to a living wage. Something has got to change.

Of course, there are limitations to these numbers, and in the document Rainforest directs one to details on the methodology, (click here) and how to use the Reference Values (click here). The biggest cautions I note to myself are:

• these are national averages. Even small countries like Rwanda, can have vast differences between what is a living wage in one area vs. another, especially rural vs. urban wages span a wide spectrum. In large countries, like Kenya or Ethiopia, even rural wages will have a broad range.

• these are not commodity specific. Groups like LICP are working on commodity specific living income estimates, so that eventually we can understand what is relevant for a coffee farmer vs. a cocoa or rice farmer.

Regarding the use of these benchmarks within the Rainforest standard, there are important things to note also:

• To uphold the standard, a buyer must assess wages against the living wage and make improvements towards the living wage, but it doesn’t require that you pay the living wage. 

• The Rainforest standard, as it is today, applies to workers on individual estates, workers on large farms within a group, and workers in group management facilities (the office secretary and maybe the workers at a group-operated wet mill), but not the smallholders themselves nor the workers that they hire. 

36. International Coffee Day - Challenge of Transformation in Rwanda and Burundi

 

Oct. 1, 2015

Today Michigan State University and USAID unveiled a $1.8 million investment in Rwandan and Burundian coffee farmers -- which together number approximately 1 million smallholder farmers. MSU Announcement.
USAID announcement. The timing of the announcement was carefully choreographed to be on precisely on International Coffee Day, as the actual project work has been going on for two months. The delay in the announcement shows the thought and importance that the organizations wanted to bring to the fact that they are making this investment.

Other voices in specialty coffee have raised the plea for investments to strengthen the "smallholder" base of the coffee supply chain. [For example here and here.] This project could be a model for other efforts to address farmworker and smallholder issues. It brings together rigorous agronomy researchers, economics researchers and "policy shaping" activities, with solid engagement from researchers in the producing countries themselves. Personally, I have seen few donor-funded projects with such inter-disciplinary goals, activities and individuals all in one package. Such projects are a challenge to create and manage, but watch this space. To address resilience in the complex world of coffee, this type of multi-faceted project may be required.

The Challenge of Coffee-Led Economic Development
This project is also a story about the long, long road nations must travel to transform themselves from being a commodity coffee "afterthought" on the global coffee hierarchy, to a "top of mind" household name in the minds of specialty coffee consumers. Rwanda and Burundi are often touted as "poster children" who have achieved what many continue to dream of -- moving from non-existence on the specialty coffee world map a decade ago, to "darlings" of the specialty green buyers' shopping list. Both countries hold enviable reputations now for offering fruitiness, acidity, smooth body and chocolate undertones. Given the hype, it would be easy to assume Rwanda and Burundi can rest on their laurels.

Unfortunately, the reality is much closer to what every farmer knows. The work is never done. Rwanda and Burundi face pest issues that make leaf rust look like a walk in the park, and because their coffee sectors are so under-developed, the resources are scarce for addressing acute issues, like the antestia bug. In addition, these countries face decades-old issues like tree yields close to the lowest in the world (1.5 kg per tree), year-to-year production cyclicity close to the highest in the coffee world and a persistently high share of "ordinary" (commodity) vs. specialty coffee.

Thrilled and Daunted
Since I am part of this applied research project, I am both thrilled and daunted to have the opportunity to work on these issues. Thrilled, because as humans, especially coffee industry people, we are eternally optimistic that we can make the future brighter. I'm also thrilled because the team implementing this project is comprised of a unique set of true experts whose work is always excellent. Compliments to the project's director, Dan Clay, for bringing this international team together.

What is daunting is the realization that while this $1.8 million is a significant amount, my experience in economic development for over 20 years tells me it's still not nearly enough to erase decades-old problems. However, I hope we can say (with some well designed monitoring and evaluation work) that we have made a significant 'dent', and perhaps that will lead to the larger investments needed for a sustainable coffee future.

More in the months ahead!