Today marks a major milestone in our coffee journey at We The Origin as we introduce Transparent Origin Coffee at our coffee roasting company, Pirates of Coffee. Each bag of transparent origin coffee that is sold transparently displays the price paid to the producer (Farmgate Price) for the coffee.
By raising awareness amongst coffee consumers about where their coffee comes from and how much coffee producers are paid, we aim to empower consumers to make informed coffee purchasing decisions.
What is a Transparent Origin Coffee?
You may have heard of a Single Origin coffee, which means that the coffee originates from a single producer or region in a specific country, and sometimes you can even trace the coffee to a specific production lot. The traceability of a single origin coffee is retained. This allows us to know exactly where the coffee is from and enables us to pinpoint the specific characteristics of that coffee. On the flip side, coffee blends don’t offer the same traceability and can be mixed with lower quality coffee which has lost its traceability.
Transparent origin coffee takes the traceability found in a single origin coffee and adds another layer of information, which is the price paid to coffee producers at origin. Specifically, the Farmgate Price tells us how much the coffee producer was paid for the coffee.
For example, the coffee producer Worku Ado from the Dawi Agro farm in Anderacha, Ethiopia was paid USD $2.75/lb. This is more than double the price of coffee on the commodity markets (less than $1.31/lb at the time of this article).
What Farmgate Price Should I Target When Buying Coffee?
Firstly, finding the farmgate price for a bag of coffee you are buying will feel like searching for a needle in a haystack. It’s hard to find the farmgate price for most coffees. You might have some luck searching through Google or by asking a coffee roaster for the information.
Assuming you are able to find the farmgate price, the next question is: what is considered a fair farmgate price?
There is no blanket answer to this question. But my answer is that the farmgate price must be more than the cost of production, so that the coffee producer is able to make a profit and run a financially sustainable business.
The average cost of coffee production varies by country. There are many factors that influence the cost of coffee production in each origin, such as:
- Coffee varietal (for example, it takes more time/effort to produce geisha compared to caturra)
- Coffee processing methods (for example, a carbonic maceration process will cost more than a natural process)
- Cost of labour and minimum wage (or lack thereof)
- Currency exchange rates
- Climate change
- Many other factors
The only thing we know for certain is that the price of coffee on the commodity markets is unsustainably low. The greater the premium between farmgate price and commodity market price, the more likely the coffee producer is being compensated fairly.
Transparent Origin Coffees from We The Origin and Pirates of Coffee
Today as we launch transparent origin coffees at Pirates of Coffee, we’re excited. We are fortunate to have two very different transparent origin coffees: one coffee from Barreta in Panama and one coffee from Anderacha in Ethiopia. We clearly display the farmgate price on every bag of transparent origin coffee that is purchased.
We hope this is the start of something great. A step in the right direction to empower consumers to make more informed purchasing decisions when buying coffee, so ultimately coffee producers can be compensated fairly.
We want to make it as transparent as possible, so let me know if there is any other information that we should include on the coffee bag?
Hello, I might make a contribution to the understanding of compensation to the coffee farmer in Indonesia. My daughter, Mio, is a local distributor on the island Flores. Her people have certain cultural laws (adat asli) which obligate the paying of brides wealth and grooms wealth (affinal obligations) and contributions to traditional ritual. When the farmer receives an increased payment these demands must be met. However, when funds are needed, for example, a medical emergency the coop director or credit union manager will pay the costs. The Catholic Church also provides for necessary expenditures. Mio is also the agriculture association director in Bajawa and the director of a chartered charity. Many city dwellers with Flores heritage support local charitable activities with both cash and sweat. The people of Indonesia are socially supportive with a tradition of gotong-royong, so the income of one family can be spread within the community. So, in Indonesia what the farmer is paid for the coffee may not accurately reflect the real compensation. Yours, Tom Gaiser