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The United Nations Industrial Development Organization (UNIDO) and the International Coffee Organization (ICO) today unveiled a major building block in a potentially transformational global fund to support the coffee sector.
Citing persistent sustainability challenges such as climate change, price volatility and living-income gaps among coffee farmers, the groups are presenting the concept of a “global funding mechanism” that would require participation from industry, financial institutions, impact investors, governments and other stakeholders.
In a 72-page report published today, coinciding with the meeting of world leaders at the G7 Summit in Italy, the groups presented a broad range of sustainability challenges facing the sector, with a particular focus on climate change and financial instability among growers.
The report provides a deeply researched economic rationale for mobilizing both public and private funding, suggesting a combination of grants and investments while employing the concept of blended finance.
In short, the report makes an argument for transforming the flow of capital through the global coffee value chain (abbreviated as “C-GVC”) in order to provide more targeted interventions and give farmers and producers more financial tools.
“The report is an important resource for navigating the requirements and options for mobilizing public and private funding to support all stakeholders across the C-GVC — from farmers to consumers,” ICO Executive Director Vanúsia Nogueira said in an announcement. “It also provides invaluable and timely inputs to the G7 leaders to catalyze investment and commitment to ensure the resilience and sustainability of the coffee industry.”
Funding for the report came through the Italian Development Cooperation and the ICO’s Coffee Public-Private Task Force (CPPTF).
While outlining a two-phased approach to building a global fund over the next four years, the report repeatedly underscores the need to score key financial commitments from large players in the coffee industry.
“While producing countries and farmer requirements should be a starting point for building any new investment solution, the coffee industry’s financial participation and a few ‘cornerstone commitments’ in an innovative investment mechanism would be critical for such [a] vehicle to see the light and be able to provide a response to the multiple challenges faced by the sector,” the report states.
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Nick Brown Nick Brown is the editor of Daily Coffee News by Roast Magazine.
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