Join our eDiscussion: 'True price transparency for consumers awareness'
Coffee is a beloved daily indulgence for many, but what if we told you that its true cost extends far beyond the price charged by most coffee corners? To build a sustainable and future-proof coffee sector, we need to embrace the true pricing mechanism, which values the impact of coffee farming and trade on people & planet. In other words, we need to know what the true price of our coffee is in order to enable consumers to make an informed choice and for the coffee industry to prevent and reduce the negative effects on people & planet.
We invite you to engage in this thought-provoking eDiscussion around the statement:
'True price transparency for coffee forces consumers to confront the real costs of their daily indulgence'
To kick-off the discussion Werner Schouten, Impact Economy Foundation, strongly advocates for making the true price transparency mandatory as it enables both consumers and industry to act on it by producing and consuming within the planetary boundaries. Read his positive opinion piece by clicking the pink button at the top of this page. On the other side of the spectrum, Yuca Waarts and Willy Baltussen, Wageningen University and Research, advocate for true price transparency within the value chain and on government level, without necessarily informing the consumer. Change will come about through legislation and improved procurement practices and not through consumer behavior. Read their critical opinion piece by clicking on the pink button at the top of this page.
The eDiscussion is ongoing. You need to be logged-in to comment. Creating an account will take only 1 minute of your time. See the log in/sign in button in the upper right corner of your screen
See also True Pricing Explained and True Pricing Around the world.
Read the opinion pieces and sign up to comment.
Let us know what you think!
Authors
Anastasia Petrova
Communications & Partnerships @ True Price
Ninja Lacey
Coalition Builder
Lisette van Benthum
NFP Coalition Builder
What other members are saying
Be the first to contribute, login or create an account
Sign upAnonymous
Very interesting pieces, thank you for sharing. I see great value in both pieces. Talking from the experience as a specialty coffee importer, I'd like to add two points: 1. Adding to Werner's point: consumers are overwhelmed in what to choose "when doing good" 2. Data ownership and accessibility on farm level of "who is good and who's not" Starting with the first, our experience learns that consumers often feel flooded with information when trying to buy a product with a positive impact. Certification schemes are numerous, so in their eyes, should we add another one? In recent years, we've been trying to convey specialty coffee as a quality improvement which allows for positive farm impacts. That "easy pitch" is quite hard as it is. Will we then now get a competition between organic labels and True Price labels? For us, as professionals in the field, it's easy to grasp the difference. But when a consumer in the supermarket, with a long shopping list in the hand wants to make the right choice in the coffee aisle, is this it? I can argue for yes: there is a real price and a true price, and it's easy to convey both on the product line. But this would need an alliance, an agreement of all big retailers, to do this. If True Pricing becomes a niche, then aren't we confusing the consumer even more? It's tempting to then think we should just all go for it - and I agree - but didn't other "labels" try to do the same before? The second point, refers to that a true price calculation is complicated. Are we providing a methodology for everyone to use, without the need for external audits, but open source access and transparently showing how you got to your outcomes? Or do we have the dangers of expensive external audits coming up? For the final consumer, this will result in a simple price, which is lower or higher than the advertised price in the supermarket or place where they are purchasing, with links to the open source deeper calculations if one desires to know so. This is the good part, as mentioned before. Dangers lie in the ownership of the data, the power imbalance of those who can and cannot calculate, and the possibility to buy off negative impacts. The latter we could decide not to do, but true cost calculating is quite intense, who's gonna pay for that work? Aren't "the big boys" the industry then at the easy end of the calculations when dictating how the industry is going to do this, if we need a "big alliance" to implement this on a wide scale, as mentioned in my first point? In my opinion, the core should be that this system is transparent, equal for all parties to use, and focus on the own responsibility and actions to improve of everyone the value chain. This also adds to including the producers. Are "they" involved, as equal partners at the table, or is this a European/American supermarket battle on how brands are being perceived? In these times of increased greenwashing, True Price might very well be the solution to come to an agreement. Though everyone has to be on board, and the calculations need to be cheap and accessible, especially for those who need it the most. We need to show that those (producers and other value chain companies) that DO good, are also being presented as the best choice. Adding to this, as a final remark, we also see the difficulty of government bodies and big firms on how to do "good procurement". They struggle on how to write good tenders, and are looking at easy solutions, where they can compare big companies to SMEs and impact in Rwanda to impact in Indonesia. True Price can be a good way to go, and I agree fully with Yuca and Willy's piece that there is a world to win here. I think when we can present this as a solution to the organizations that are soon tendering for new contracts, True Price can become a desired tool. This means that the government then works with True Price as a tool for their ecological and social goals, which then in turn might become a part of their requirements, and via this way becomes part of "the standard practice". Still, my above two points keep standing, but trying to move the discussion forward - how are we making True Price the "desired solution" for all?
Ninja Lacey
AuthorOn behalf of Herman Lelieveldt, University College Roosevelt: Sociologist Daniel Jaffee notes that at the heart of fair trade lies a fundamental paradox. In its efforts to achieve social justice and alter the unjust terms of trade that hurt small farmers worldwide, fair trade utilizes the mechanisms of the very markets that have generated those injustices. (see his Brewing Justice. Fair Trade Coffee, Sustainability, and Survival ). The debate about True Pricing in essence is a variation on this fundamental ambiguity in addressing injustices through the market. While it is certainly true that these interventions in itself will not yield a drastic change in market conditions that encompasses a total product chain, the concept itself can serve as an important vehicle to alert consumers, producers and policy-makers to the imperfections of many of the distinct food chains. If we indeed observe that we are unable to generate a true price via voluntary initiatives, it becomes ever more important to ensure public policy interventions at national, EU and a global scale in order to make the food system fairer and more sustainable. I hence feel that these two contributions actually reinforce each other.
Anonymous
Both papers have some interesting points, but it is important to maintain a critical approach that Yuca Waarts and Willy Baltussen highlight towards the mainstreaming of True Price transparency. The current percentage of conscious consumers is, despite all good intentions, still too small to move the needle. As someone who works on the ground with farmers and many supply chain players on a daily basis, I would add three aspects that are crucial for the True Price approach to become more widely used. A. Illiteracy among coffee farmers around "conventional" production costs B. Political desirability vs. supply chain reality C. Ensuring a level playing field A. As we introduced True Price methodologies in 2019 among Latin American coffee producers and traders, it was still a very novel approach for many (1). Moreover, calculating "conventional" production costs (without externalities) has never been a common practice by producers, especially smallholders, who often have lower profitability rates than their peers with bigger farm sizes (2). Without this basic foundation of production cost data, it makes it extremely difficult to add externalities to the calculations at farm level. Beyond this illiteracy, changing producer behavior based on true price awareness is challenging without the right production incentives (negative + positive). 2. On the other hand, making this mandatory, without having sufficient capacity on the ground to ensure compliance, will have a similar effect as we currently seeing with the EU deforestation legislation (EUDR) and the EU Directive on Corporate Sustainability Due Diligence Directive (CSDD) on the millions of (smallholder) producers in tropical commodity countries. Just by making reporting mandatory without ensuring the required capacity and investments, nor will make the root causes disappear, nor will reduce the externalities. The producer reality on the ground is very different from the political desirability, in which complex supply chain dynamics are not taken into account. The Wageningen University already highlighted a few aspects about this producer reality. 3. That brings me to the third aspect: the need to ensure a level playing field. While mandatory regulation is a tool that can work in a controlled environment, the reality is with coffee that it is one of the most traded commodities worldwide and with many players involved. The Dutch market is relatively small, compared to the EU and global markets, so these mandatory measures will have more effect when involving the majority of the coffee consuming market players (EU, Brazil, USA) to ensure sufficient leverage. Without proper conditions for a level playing field, there is a chance that it will shift trade streams of products with higher externalities to countries that do not have these mandatory legislation or have weaker regulation in place. That said, True Price transparency can be an effective tool for the supply chain players as it gives valuable insights on where improvements can be made to reduce costs and risks. To use a quote: "Id rather be vaguely right than precisely wrong". At the current stage of where True Price stands in its mainstreaming efforts, it would be more beneficial for the moment to focus on the supply chains players, supply chain financiers and policy makers, instead of consumers. In the end, forementioned stakeholders are the ones that are able to reduce negative externalities and putting them at the forefront of true price transparency is likely the most realistic approach to develop the true potential of farmers. Source: (1) https://www.solidaridadnetwork.org/wp-content/uploads/migrated-files/publications/TP%20CSA%20Coffee%20COL.pdf Source: (2) https://www.solidaridadnetwork.org/wp-content/uploads/2022/02/informeCostos_2020-EN-VF.pdf