New Report Shows Coffee Firms Have Yet to Commit to New EU Rules on Living Wages for Coffee Farmers – CoffeeTalk

A recent coffee sector report highlights that none of the world’s leading coffee roasters and traders have committed to paying farmers a living income, despite the impending legal obligation under the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) that takes effect in 2029. This directive mandates that large companies must address human rights and environmental issues within their supply chains or face penalties of up to 3% of their global turnover.

The biennial Coffee Barometer, compiled by various NGOs, marks a significant shift as it is the first EU regulation to formally recognize living income as a binding human right, directly impacting the coffee industry. The report emphasizes that compliance systems must be established well before the 2029 deadline. Companies will have to rethink aspects such as pricing structures, contract durations, and payment terms, which have traditionally been viewed solely as commercial decisions. The report stresses that if these practices contribute to human rights violations, companies will be compelled to modify them.

Despite this pressing requirement, the Barometer’s findings reveal that none of the 15 largest roasters and traders reviewed disclosed any living income commitments in their sustainability reports. The coffee industry remains plagued by the poverty experienced by smallholder farmers, who are central to the sector’s challenges. Approximately 12.5 million farming households, predominantly managing less than two hectares, produce the bulk of the world’s coffee while struggling to achieve a viable income, even amid current relatively high price levels.

The report critiques the disconnect between companies’ public sustainability commitments and their fundamental commercial practices, which continue to exploit low-cost commodity purchasing. The recommendation is clear: without a fundamental shift in operations, sustainability investments will only skirt around the problem, failing to address the core issues at hand. The major companies reviewed include Nestlé, Starbucks, JDE Peet’s, and key traders like Olam, Louis Dreyfus, Ecom, and Volcafe.

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