responsAbility presents study of fair trade coffee growing in Costa Rica
Zurich, January 29, 2013 – responsAbility, one of the world’s leading asset managers in the field of development-related investments, has published a study of coffee growing in Costa Rica. Based on this example, responsAbility identifies three key criteria for success in developing sustainable agriculture: outline conditions favorable to development, strong producer organizations, and access to finance. Investments in fair trade are not only financially attractive but, according to this study, also help small farmers in developing economies to earn a better living.
Every day, two billion cups of coffee are consumed around the world. The main producers of this commodity are 25 million small farmers in over 50 developing economies. Despite strong global demand for their produce, most of them live in poverty. Fair trade seeks to tap the potential of these small farmers and offer them a better living.
Costa Rica is an exemplar of successful development in the coffee sector. Small farmers here enjoy higher incomes than the vast majority of coffee growers in other regions of the world. The study Fair Trade Coffee from Costa Rica: A Smallholder Success Story, written by responsibility Research, analyses the outline conditions that have bred success in Costa Rica.
In the study, the responsAbility economists identify three key criteria for success in development. They are: 1) outline conditions favorable to development, with a broadly based policy for each sector, transparent regulation and research focused on productivity and quality; 2) strong producer organizations that facilitate returns to scale, combined with better management and lower transaction costs to increase turnover and prices; and 3) access to finance as an essential precondition for producer organizations to trade profitably and grow.
Marco Fischer, Senior Research Analyst at responsAbility, explains: «On a global scale, there are roughly 40 million farmers who are part of producer organizations but suffer from a lack of access to financing. Their financing need is estimated at around USD 80 billion in total. Thus the fair trade sector has significant potential and offers commensurate opportunities for investors. The goal of investments in the fair trade sector is to use finance to tap the vast potential of small farms.»
responsAbility Investments AG
Ulli Janett, Media Relations
Telephone: +41 44 403 06 33
ulli.janett [at] responsAbility.com (e-mail: )