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Speech from Urs Küchler, Worldwide Sustainable Coffee Fund
At the ICO, Executive Board, 18th May 2005

  

Ladies & Gentlemen,

We are in midst of an intensive and productive debate about sustainability. Numerous projects have been running with positive results. I just mention a few examples such as the activity of CQI as presented by Mr Dan Cox yesterday, or the North-western Growers association in Cameroon as presented by Mr Christopher MBah on Tuesday. Three are many people who have achieved wonderful results and there are many good ideas in the producing countries waiting to be taken up.

It is important that this potential gets the proper attention and is combined with needs and the structure of the consuming markets since there are the end customers which, as Dr. Illy likes to say, we want to see drinking coffee with a smile. In this context, I also take up the words from Mr Caleb Dengu from yesterday; that it is crucial that the work in the origin is connected with the consumer markets. The reasons are obvious then only producing what the market honours will allow to add value to the coffee production. It has been suggested that this is achieved through:

  1. quality that can be perceived by the consumer
  2. Social welfare of the producers which will come through adequate remuneration of the added value of their work and
  3. Environmental sustainability for the ecological concerns of all of us.

In order that the coffee business and its industry can also improve the public image, these measurements have to be transparent and global which in turn can only be under a neutral and independent roof.

I dare say that there is a general consensus up to this point.

The Coffee Fund in its principle proposes a system to finance the measurements. It is not impositive; it builds on collaboration with producers, traders, industry, governments and NGO’s. This collaboration with existing institutions minimizes the administrative burden. Working with coffee production and markets in one single concept allows a customer oriented approach and assures that the measurements are practical for the entire supply chain.

The point has been risen, what is the difference between the Common Fund for Commodities and the Coffee Fund. To start with, the Coffee Fund proposes to be financed through the private sector. Furthermore, the Common Fund generally provides financing for larger projects with the trend of a structural / political character. The Coffee Fund, in turn, focuses on smaller projects, on the ground, that respond to private initiative in the coffee sector with the backing from national coffee authorities. Third, the Coffee Fund should be understood as an integrated marketing tool for the coffee business.

Now, the Coffee Fund is not in competition with any other initiative and we are always open to share synergies and avoid duplication where it could exist. Contrasting the Coffee Fund to other approaches, I would like to highlight that the Coffee Fund is practical, hands-on, it focuses on actual, real needs such as quality, technical assistance, financing infrastructure building, promotion of consumption worldwide to reach increased consumption.

A further characteristic of the Coffee Fund is that it is a flexible concept that bases on dialogue. I provide you with an excellent example. Over the last few days I have had the opportunity to discuss in depth what sustainability means with some representatives of producing countries. There are clear differences between what it means in Guatemala, Eastern Africa and Papa New Guinea. And hitherto, all of them are right. Their coffee sectors simply present different set ups and have different needs. That is why we always insist that the actual measurements taken have to be worked out together with the coffee authorities in each country. There is no such thing call one-fit-all solution.

A further example of this needed flexibility came up during a discussion with Mr Caleb Dengu yesterday afternoon, when he indicated that the board of the Common Fund for Commodities had actually hinted that if a Coffee Fund should be set up, then it should be a trust fund directly connected to the Common Fund for Commodities. // Now this proposal seems absolutely interesting as it presents a set of obvious advantages:

  1. It would make the availability of financing of small hands-on projects much faster and efficient.
  2. There would be an official, government backed control organ that will make it more attractive to the industry to participate.
  3. This then constitutes a public-private partnership.

It is clear that such a set up would need clear guidelines as to what projects can be supported and how and where. Furthermore, it would require a formal structure that will have to be put under the supervision from the ICO - as already proposed in our original scheme. 

This idea may not work out for whatever reasons, but it is worthwhile to pursue it further. Our interest is in continuing this concrete discussion on collecting funds for a sustainable worldwide coffee business and the concrete use of these funds. Such a discussion includes intensifying the dialogue with the industry. It is for this that we require the financial support form the CFC as submitted.

We have been approached by many people claiming that our concept needs to include more concrete elements. The grant as applied from the Common Fund for Commodities will be used precisely for binding in concrete elements or concrete examples for projects, for clarifying the boundaries within which the Coffee Fund shall operate and for leading an intensive discussion about the modes of financing for these projects, be it through a trust fund from within the Common Fund for Commodities, the industry or a combination of both. Among the activities financed by this grant will also be a proper discussion with the industry and their participation in the Coffee Fund. A 12 month window should allow giving a satisfactory answer to all these questions.

Though, you may disagree on some statements I have made, I am sure that you will not disagree on the fact that the concept has to be taken a step further. For making this next step, we need to count on this fast track grant as applied to the Common Fund. Give us the opportunity to continue in order that we can eventually respond to your concerns.

Thank you.

 

Stand: 16. Dezember 2005