Brussels, 17/09/2002 (Agence Europe) - Whereas the European Commission is willing to adopt, on Wednesday, a communication on the link between trade and development, Oxfam International, an NGO highly committed to promoting fair trade, has appealed to Commissioners Poul Nielson (Development) and Pascal Lamy (Trade) for the Commission to join an overall action plan in favour of small coffee producers in developing countries. It makes support to primary goods in developing countries a priority in the implementation of the Doha agenda. On the eve of launching an international campaign in favour of the global Coffee Rescue Plan in the interest of the poorest populations, Oxfam International invites the Commission to adopt the measures it recommends to contain the crisis that is hitting the coffee market head on under the combined effect of over-production and an unprecedented collapse in prices. The campaign on the theme "poverty in your coffee cup" urges all players to assume their responsibilities. It will be launched in eighteen countries on 23 September this year to heighten awareness among coffee consumers regarding the disproportion between the price paid to small producer and the profits made by large companies in the sector. At the same time, it will seek to convince the major groups and investors that their trade strategy is not sustainable.
During a press conference, Phil Bloomer, Economy and International Politics Adviser at Oxfam International, explained the extent of the crisis and the stakes of the campaign. He said the crisis contributes to increasing poverty in developing countries. Not only does it force 25 million small farmers and workers in the coffee sector to sell well below production prices, but it is also the cause of famine in Vietnam, in Ethiopia and in most of the countries of Central America. It is the reason why children are taken away from school, and why there is insufficient access to basic health products. Furthermore, it affects producer countries that are among the poorest countries most dependent on coffee (like Burundi, 80% dependent, or Ethiopia, whose loss in income accounts for twice the debt relief granted under the HIPC initiative). It is the cause of instability also (for example: violence in Guatemala further to the land reform or the phenomenon of coffee workers retraining into drug growers, in the Andes). According to Mr Bloomer, over-production (8% annually) finds its roots, on one hand, in the increased production in Brazil and Vietnam and, on the other hand, in the mistaken forecasts of the World Bank regarding market evolution. What is more, many countries, like Guatemala, grow coffee because there is no alternative, when the market is inundated by the coffee of non-traditional producers skilled in dumping. The development of new technologies (mechanical coffee grain collection) for manufacturing coffee of very bad quality (5% of the total market) makes the picture even gloomier.
Mr Bloomer underlined that the market was supposed to clear itself, but did not do so and will not be able to do so on its own. Many poor countries that have invested in coffee have not received anything back, and do not have the necessary money to invest in replacement production. Nestle is at a turning point in its policy, he says, as, giving up its liberal ideas, this company is now in favour of an intervention policy. He specified that Nestlé is the first large company to have subscribed to the guidelines set out by the International Coffee Organisation (ICO). The Coffee Rescue Plan recommended by Oxfam is along the same lines as these guidelines. It would be carried out in two phases, under the auspices of the ICO. During the first year, it would consist of: - support to the international coffee market, the immediate destruction of at least 5 million sacks of coffee; - the creation of a diversification fund for financing alternative crops; - a commitment on the part of the large roaster companies to only sell coffee that complies with ICO quality standards, to market 2% of their production according to fair trade rules and, for the remainder, to pay the producers a decent price, above the production price. Secondly, Oxfam International urges for an international initiative for setting up a modern intervention system able to stabilise prices and offer more to producer countries that give added value to coffee processing; - financing of donors to reduce the over-dependence of farmers on primary goods; - the end of the double standards policy practised by the European Union and the United States in the trade of farm products. Such a system requires an adequate policy on the part of producer countries and their cooperation in reabsorbing production. An international conference allowing all players to begin working together would complete the picture.
According to Phil Bloomer, the double standards policy denounced by Oxfam is particularly obvious in the sugar sector. He says that, at Community level, subsidies to Community producers go to a handful of companies and create a situation of monopoly, but when it is a question of tropical sugar, there is nothing but praise for free trade. The rich and poor countries, he stresses, must unite to guarantee that proceeds go to those who need them most.
Stating that the destruction of 5 million sacks of sugar would cost $100 million, which would lead to a 20% increase in the price, but would earn the poor $800 million in export revenue, Mr. Bloomer adds: "The solutions are simple. It's the political will that is lacking. We are currently at a turning point. With the Doha Agenda, we have the opportunity to ensure that the coffee market develops to the advantage of poor countries. We launch an appeal to Commissioners Lamy and Nielson to strive, together, along these lines."
Regarding this, he regrets that in the debate on trade and development all stress should be placed on the WTO and that nothing is done to raw materials. "For the Doha Round, enormous energy was spent on having developing countries agree to having included on the agenda subjects such as investments and competition policies. At the same time, how much time did the Commission devote to issues concerning basic products?", he asks. He then adds: "The European Union and its Member states really have the means to act. We would like the Commission to clearly support the implementation of this action plan". The latter was presented to the Chef de Cabinet of Pascal Lamy on 13 September.