ICO and UNIDO propose new global fund to boost coffee sector

GLOBAL – The International Coffee Organization (ICO) and the United Nations Industrial Development Organization (UNIDO) have proposed setting up a new global fund to support the coffee sector.

The fund would support stakeholders throughout the Coffee Global Value Chain (C-GVC), especially farmers, address climate change and structural challenges such as living income gaps, stringent regulatory framework, price levels, volatility, productivity, quality, and market access.

The proposal was tabled during the launch of a joint report, titled ‘Sustainability & resilience of the coffee global value chain: towards a global investment vehicle’, which highlights the difficulties faced by farmers and other stakeholders.

“We are happy to release this report which provides concrete solutions to address the challenges faced by millions of smallholder coffee farmers through targeted investments in the coffee sector,” says Gerd Müller, Director General of UNIDO.

“Coffee farmers often struggle to make a decent living due to volatile market conditions, the impacts of climate change on agriculture, as well as the need to respond to growing consumers’ demand for sustainability.”

The joint report also provides insights into the current state of the coffee sector, and highlights future demand patterns and the economic rationale for mobilising public and private funding in the form of both grants and investments.

It also underscores the need to refine investment estimates through improving data access for farmers and addressing knowledge gaps in sustainability interventions to ensure targeted and effective allocation of funds.

In the press release, the partners said it is only a robust partnership between governments, private sector stakeholders, international organizations and civil society can pool resources, enhance coordination, and leverage expertise to support transformative projects in the C-GVC.

By providing financial incentives and technical assistance, the initiative will enable the implementation of sustainable, resilient, circular, and regenerative practices, thereby enhancing the long-term viability of the sector.

This is just a few months away from the implementation of EUDR regulation that requires coffee and other agricultural products to be fully traceable before entering or being traded in EU.

The deforestation regulation is part of a broader EU effort to reduce global greenhouse gas emissions and biodiversity loss, and other countries are considering similar measures.

The regulation requires EU-based importers to provide detailed documentation, such as geolocation data, to show that a product did not originate from land deforested after 2020 and that it was produced in accordance with local laws.

In practice, much of the burden will be passed on to farmers, manufacturers, and exporters in countries where the affected commodities are produced.

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