Leveraging the Market for a Sustainable Coffee Economy

This policy brief by the International Institute for Sustainable Development (IISD) outlines strategic options for the International Coffee Organization (ICO) to integrate sustainability into the renegotiation of the International Coffee Agreement (ICA). It proposes enhancing participatory governance, improving market information for differentiated coffees, coordinating technical assistance, and implementing policy measures to internalize the social and environmental costs of production.

• The sustainability of the coffee sector is undermined by market volatility, declining terms of trade, systemic poverty, and environmental degradation. Current efforts to address these issues have been fragmented, focusing separately on international market management and supply chain management, whereas a systemic policy approach treating both is necessary for global sustainability.
• The Private Sector Consultative Board (PSCB) currently lacks adequate representation for smallholder producer groups, as membership is primarily limited to major coffee associations and institutions. To address this, the brief suggests expanding exporting country representation from eight to 12 members, specifically reserving a third representative for each coffee group for smallholder producers.
• There is a need for the ICO to provide more granular market data to support sustainable production strategies. The brief proposes a Web-based "coffee observatory" to provide aggregate price data for differentiated coffees based on quality-related conditions and geographic sustainability.
• Coffee producers in underdeveloped regions require technical assistance across five key areas: improving management and marketing for sustainability/quality requirements, diversifying livelihoods, strengthening producer organizations, increasing access to credit, and improving risk management tools. To avoid duplication and inefficiency, the ICO could act as a "clearing house" for these projects.
• Producers face significant investment challenges due to the complexity of differentiated markets and a lack of infrastructure to access credit. The brief suggests the ICO facilitate a "financial services information access point" and a "risk management facility" to help producers access credit and tools like put options and hedges, which are currently used mainly by roasters and traders.
• To internalize the economic, social, and environmental costs of production, the ICO could adopt policy measures such as preferential export and import tariffs, preferential sales and services taxes, income tax credits for businesses dealing in sustainable coffees, and set premium schedules on commodity exchanges.

APA

Potts, J. (2006). Leveraging the Market for a Sustainable Coffee Economy. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/coffee_leveraging_market.pdf

Chicago

Potts, Jason. Leveraging the Market for a Sustainable Coffee Economy. International Institute for Sustainable Development, 2006. https://www.iisd.org/system/files/publications/coffee_leveraging_market.pdf.

Wikipedia

{{cite report |last1=Potts |first1=Jason |title=Leveraging the Market for a Sustainable Coffee Economy |publisher=International Institute for Sustainable Development |date=May 2006 |url=https://www.iisd.org/system/files/publications/coffee_leveraging_market.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{potts2006leveraging, author = {Potts, Jason}, title = {{Leveraging the Market for a Sustainable Coffee Economy}}, institution = {International Institute for Sustainable Development}, year = {2006}, month = may, url = {https://www.iisd.org/system/files/publications/coffee_leveraging_market.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }