Most of the coffee worldwide is produced by smallholders who usually do not earn enough to make a decent living for themselves and their household. Coffee retailers, roasters, traders, and other stakeholders are increasingly implementing interventions to help raise incomes – although much work remains to be done. One key challenge is to know what constitutes this ‘living income’. In other words: how much should a typical household in a particular region need to earn to have a decent standard of living? For four coffee-producing countries, Rwanda, Honduras, Togo and Angola, this question still requires answering.
The NewForesight Approach
NewForesight has developed a deep level of expertise on the topic of living income, and uses a benchmark methodology – formally recognized through the IDH Living Income Benchmark Recognition process and B Corp, and based on the Anker principles – to determine the living income benchmark. In close collaboration with regional partners, the ICO CPPTF’s Living-Prosperous Income Workstream, NewForesight collects data on the cost elements: the cost of housing, food, non-food and non-housing (such as health or education), and a margin for unexpected events (such as emergencies).
The key output of this assignment is a Living Income Benchmark for Rwanda, Honduras, Togo and Angola. However, having the benchmark is a means to a larger end, namely, to reduce and eventually close the living income gap. For that reason, the next step is to determine the living income gap, and establish the interventions required to close this gap with concerted resources from key coffee stakeholders. Furthermore, throughout the process, NewForesight equips local coffee institutions and governments to conduct and update these living income benchmarking studies themselves throughout the years..