Olam Coffee’s chief executive Vivek Verma has raised the idea of a price stabilisation fund to help farmers affected by the ongoing price crisis.
Speaking shortly after the ‘London Declaration’ issued following the CEO & Global Leaders Forum on 23 September 2019, Mr Verma said, “With farmers now in the second year of very low prices, the industry recognises the scope of what must be achieved under the London Declaration but we must act quickly. It is also critical is to find a way to give farmers a safety net that will help them be resilient in the face of climate change.
“If coffee were a product of the developed world there would have been some price stabilisation mechanism put in place or, at the very least, there would have been subsidies,” said Mr Verma.
“Unfortunately, coffee is mostly grown in developing and less-developed countries, which do not have the means to support farmers in times of low prices.
“I believe it is time to seriously look at implementing a price stabilisation fund that will subsidise farmers when prices are low for reducing production capacity over the short-term, while helping them mitigate the long-term impacts of climate change.
“The fund would then recoup the subsidy when prices are high without any burden to local government budgets. Despite the different situations of producing countries I believe this is achievable if the ICO, development organisations, commercial banks and the industry come together.”