Wednesday, 18 September, 2002, 00:48 GMT 01:48 UK

Oxfam claims coffee producers are facing ruin

Corporate giants that make huge profits from selling coffee should be forced to pay farmers a decent price, according to the latest campaign from Oxfam.

They know there is terrible human suffering at the heart of their business and yet they do virtually nothing to help Oxfam is launching a "Coffee Rescue Plan" urging political and business leaders to take immediate action, such as destroying surplus stocks and guaranteeing a fair price for farmers.

The campaign comes a week before the International Coffee Organisation (ICO) is due to meet and discuss ways to solve the crisis.

Big four drinkers

Oxfam is attacking what it calls the "big four" coffee companies - Kraft, Sara Lee, Procter & Gamble and Nestle - which it says buy nearly half the world's coffee crop between them.

The charity argues that the companies make huge profits while farmers receive only 5% of the retail price.

"They know there is terrible human suffering at the heart of their business and yet they do virtually nothing to help," said Oxfam's campaigns director Adrian Lovett.

Oxfam wants governments and business leaders to change practises to reverse the current situation of supply far-exceeding demand.

It suggests they trade only in quality coffee, pay farmers a "decent price" and back ICO attempts to rectify the problem

'Stunning policy failure'

Oxfam estimates 8% more coffee is produced than necessary every year, causing a slump in export prices.

World coffee prices in New York hit an all-time low of $0.42 per pound earlier this year, prompting sharp criticism of the contrast in retail prices.

Oxfam claims export sales from poor countries were worth 30% of the total coffee market 10 years ago, but are now worth only 10%.

The organisation is criticising the World Bank and International Monetary Fund for encouraging poorer countries to expand their export business without warning them of potential price crashes.

-- Anonymous, September 17, 2002