New report on wages and working conditions in the coffee sector and the role of global supply chains

NewForesight is happy to finally share with the coffee sector and all interested stakeholders one of the first cross-country sectorial studies focused on workers’ wages and working conditions. Most reports on poverty in the coffee sector have naturally focused on smallholder farmers but workers – often casual laborers on smallholder farms – have received less attention partially because of lack of visibility.

Coffee is primarily a smallholder-based production system. Among the world’s 18 largest producers – with a few notable exceptions being Brazil, Honduras, Peru, and Kenya – 90-95% of production is produced by smallholder producers. This report explores wage levels in five focus countries (Viet Nam, Indonesia, India, Ethiopia, and Costa Rica) that account for an estimated six million workers in the coffee sector.

The report is one of three in a research series on the challenge of improving wages and working conditions in different sectors, including tea, coffee, and banana. The tea and banana reports will be released in the coming weeks. The reports seek to contribute to a better understanding of the state of work in these selected sectors and supply chains, identifying opportunities for social dialogue and stakeholder actions that offer a way forward for progress on decent work.

The reports are undertaken as part of an ILO project on Indicators and methodologies for wage setting supported by the Ministry of Foreign Affairs of the Netherlands – and Rainforest Alliance is one of its partners. The aim of the project is to support the capacity of government and social partners to negotiate and set adequate wages and to enable committed industry-wide initiatives or enterprises to leverage better wages for the lowest-paid workers.

The report finds that average hourly wages are above the minimum wage in three of the five countries except Indonesia and in Ethiopia (where no minimum wage exists). However, despite average hourly wages being above the minimum wage, minimum wage compliance remains an issue. The coffee sector is faced with a set of root causes that perpetuate the challenges of low wages and poor working conditions.

The report studies global market dynamics and how global supply chains impact wages and working conditions in the coffee sector. Based upon a root cause analysis, NewForesight presents a range of recommendations and inspirational best practices to drive better wage and working conditions outcomes.

Many—if not all—of these issues are not new, yet progress on many basic issues remains elusive. Concerted, supply chain-wide action on critical areas such as those highlighted in the report are unavoidable. Without tackling these root causes, sector-wide systemic change will not prevail. The report highlights necessary actions for all stakeholders to take: private sector, governments, social partners, institutional actors, and civil society.

We encourage all stakeholders to read the report and contribute to improvement of wages and working conditions. Click here to read the report.

The report was developed by Daniel Pedersen and Jennifer Morton. For any enquiries on the report, please reach out to Daniel Pedersen at daniel.pedersen@newforesight.com.