FREQUENTLY ASKED QUESTIONS
What is the ICO?
The International Coffee Organization is an intergovernmental organization that brings together major coffee producing and consuming countries to tackle the challenges facing the world coffee sector through international cooperation. It administers the International Coffee Agreement and is dedicated to strengthening the global coffee sector and promoting its expansion in a market-based environment for the betterment of all participants. The objectives of the Agreement reflect the priorities of Member Governments and are implemented through policy decisions by the International Coffee Council, and an annual programme of activities implemented by the Secretariat.
How did the ICO come into existence?
The ICO was established in 1963 at a conference convened by the United Nations in response to fluctuations in prices and supply and demand from the 1930s to the 1960s. During a period of severe economic depression in the 1930s and during the Second World War, supply increased, demand fell and prices were low. In the immediate post-war years, however, demand increased and supplies were inadequate to satisfy this rising demand. Between 1950 and 1953, stock levels were below the minimum needs for normal trading purposes, a situation which was exacerbated by the outbreak of the Korean War and adverse climate in Brazil. Prices rose to unprecedented heights in 1953. This gave rise to a substantial increase in planting throughout the world and over-production followed. Stocks increased and, in the second half of the 1950s and the early 1960s, prices fell drastically. This led to an intergovernmental initiative to attempt to stabilise the market and to halt the fall in prices, which had serious economic and political consequences for a large number of coffee producing countries in Latin America and Africa. Following a series of short-term Agreements among producing countries, a Coffee Study Group was formed to consider the negotiation of an Agreement to include both exporting and importing countries, culminating in the International Coffee Agreement 1962.
What is the International Coffee Agreement?
The ICA is an international treaty and the only international mechanism under which governments of countries engaged in the production, transformation, trade and consumption of coffee, work together and are committed to “strengthen the global coffee sector and promote its sustainable expansion in a market-based environment for the betterment of all participants in the sector”, with a special focus on the livelihood of farmers. It sets out the ICO objectives and the basic framework within which the Organization operates. The treaty is agreed to by Member Governments and lasts for a set period of years. The first Agreement was concluded in 1962 and was followed by the 1968, 1976, 1983, 1994 and 2001 Agreements. The text of the latest Agreement, the ICA 2007, was agreed by Members in September 2007 and is deposited with the ICO. The ICA 2007 has been extended until 1 February 2024 and is currently being revised by ICO Member Governments.
Why do we need an international organization to look after coffee?
Almost all commodities have a board representing their interests and coffee is no exception. Coffee is of great economic importance, produced in over 60 countries and accounting for the livelihood of around 125 million people around the world. Many of these countries are heavily dependent on coffee, which can account for up to 50% of their total export earnings. Coffee is a universally popular drink, a daily part of many people’s lives, with annual world consumption of over 130 million bags. Because coffee is a complex product that may be farmed and processed thousands of miles from where it is consumed, there are many issues relating to the world coffee economy that can best be addressed through international cooperation. This is the task of the ICO.
What is the impact of the ICO on world trade in coffee?
The ICO facilitates improved market transparency and a more stable and healthy market through highly regarded statistical and analytical services, in-depth economic studies and regular reports on the coffee market. It contributes to better quality coffee through different initiatives such as the already implemented Coffee Quality-Improvement Programme (CQP) – which was designed to improve the balance between supply and demand of coffee by stimulating demand through the provision of a better overall standard of quality to the market while reducing supply by eliminating significant quantities of sub-standard coffee.
Additionally, the ICO undertakes promotion activities to increase consumption of coffee. Under the 2007 Agreement, a plan for promotion and market development is currently promoting value through quality, health, sustainability and differentiation, by building a multistakeholder network of partners and supporting producing countries in de-commoditizing coffee through programmes to increase income, with a particular focus on small growers, with the ICO acting as a facilitator and knowledge provider. Other activities include facilitating consultations on finance and risk management in the coffee sector and coffee development projects that help coffee producers to improve marketing and reduce damage from pests and diseases, enhancing their long-term competitiveness and prospects in the coffee economy. The ICO also facilitates in-depth debate of the short-term and long-term market perspective and coffee prices based on the Secretariat’s independent view and regularly publishes a report on obstacles to trade and consumption.
What are ICO Members?
As the ICO is an intergovernmental organization, it brings together major coffee producing and consuming countries to tackle the challenges facing the world coffee sector through international cooperation. ICO Member Governments represent 93% of world coffee production and 63% of world consumption. As of 7 November 2022, the ICO has 49 Members: 42 exporting and 7 importing for a total of 75 countries. A list of all Members can be found here.
What is the International Coffee Council?
Decisions in the Council are usually reached on the basis of consensus. This is important so that decisions which can have a major impact on coffee, such as quality and projects, achieve as much support and acceptance as possible. When consensus is not possible, the Council can turn to a voting system that safeguards the interests of both consuming and producing countries.
Who can attend meetings?
Representatives of Member Governments, accompanied by their alternates and advisers. For the most part, representatives come from government ministries, embassies in London, and coffee boards and federations, supported by representatives from private sector and other advisers as required. Countries that are not Members of the Agreement and intergovernmental organizations with a significant interest in coffee, such as the InterAfrican Coffee Organization and the Food and Agriculture Organization of the United Nations, are invited to attend meetings as observers and participate in the work of the ICO.
Does the ICO operate a quota system?
No. The ICO operated a quota system, whereby coffee supplies in excess of consumer requirements were withheld from the market, on and off from 1962 to 1989, when the system was suspended because of failure to agree on quota distribution. However, even during that time decisions required the agreement of consuming Member countries. The 1962 and 1968 International Coffee Agreements contained provisions for the application of a quota system, as well as other activities such as promotion. The operation of these Agreements helped prices to remain relatively stable throughout the years 1963 to 1972 and production and consumption became more evenly balanced. Changes in the pattern of supply and demand, resulting in an increase in prices, led to the collapse of the quota system in 1973, and the 1968 Agreement was extended with all economic provisions deleted. The 1976 Agreement included a new feature allowing for the suspension of quotas if prices were high, and their reintroduction if prices became too low. Under this system, quotas were reintroduced in 1980 and remained in effect for most of the 1983 Agreement. While in effect, this Agreement was largely successful in maintaining prices within the agreed range of 120 – 140 US cents/lb. However, the present Agreement has no provision for this type of regulatory mechanism.
To what extent do non-governmental organizations participate in the work of the ICO?
The ICO has cooperated on a number of projects with non-governmental organizations such as the Global Coffee Platform, the Sustainable Coffee Challenge, the Rainforest Challenge, Enveritas, the Committee on Sustainability Assessment and the Sustainable Food Lab. It is committed under its Agreement to establishing and strengthening cooperative activities with appropriate non-governmental organizations with expertise in relevant aspects of the coffee sector. Non-governmental organizations also play a key role within the activities of the Coffee Public-Private Task Force and its Technical Workstreams, actively participating and contributing to the Sector-wide dialogue the Task Force promotes.
To what extent does the private sector participate in the work of the ICO?
Sixteen leading industry representatives from producing and consuming countries are members of the ICO Private Sector Consultative Board (PSCB), along with their alternates and advisers. The PSCB advises the Council on relevant matters and also enables the coffee industry to comment on ICO activities. In addition, a World Coffee Conference is held on a regular basis and brings together government and private sector representatives to discuss matters of common concern. Under the 2007 Agreement, the newly created Consultative Forum on Coffee Sector Finance also includes representatives of financial institutions, the private sector and others with relevant expertise.
During its 125th Session, the International Coffee Council adopted resolution ICC-125-10 requesting the ICO to set up a Coffee Public-Private Task Force (CPPTF). The ultimate objective of the Task Force is to build consensus on priority issues and actions to be submitted for consideration to the International Coffee Council (ICC) and the CEO and Global Leader Forum (CGLF).
What is the London Declaration?
In September 2018, the International Coffee Council (ICC) adopted Resolution 465 on “coffee price levels” during the 122nd session in London. This led to a Sector Dialogue organized by the ICO, engaging the relevant sector stakeholders and broader international community in the dialogue on coffee price levels. This culminated in the development of a joint Declaration of Intent of stakeholders from both the private and public sector in the form of the “London Declaration” which was signed the next year in September 2019 by 12 private sector companies and welcomed by the 125th ICC Session. All signatories and supporting organisations commit to taking action focusing on four themes: promoting competitive and sustainable production; fostering responsible and equitable growth; promoting responsible consumption; and promoting public-private dialogue regarding policy development.
What is the Coffee Public-Private Task Force (CPPTF)?
Following the adoption of the resolution ICC-125-10, the ICO held a series of webinars in which the Coffee Public-Private Task Force (CPPTF) was formed, consisting of 16 private sector ‘Sherpas’—representatives of the signatory companies—and 16 public sector representatives of ICO Member countries, both importing and exporting. The aim of the CPPTF and its related Technical Workstreams (TW) is to implement the ICC Resolution 465 and the London Declaration, thereby actively advancing the work of the Sector-wide Dialogue initiated and led by the International Coffee Organization (ICO). The ultimate objective of the Task Force is to build consensus on priority issues and actions to be submitted for consideration to the International Coffee Council (ICC) and the CEO and Global Leader Forum (CGLF).
The objectives of the Task Force are settled to drive the discussion on a joint long-term vision beyond 2020 for the sector in order to achieve:
1. transformational solutions towards sustainable, inclusive, and resilient global coffee value chains;
2. consensus-building among public and private sector coffee stakeholders on a roadmap for the implementation of the commitments and concrete actions contained in the London Declaration and in line with the International Coffee Agreement to achieve the long-term vision;
3. new joint concrete, practical, actions that build on local initiatives and allocate resources; monitor and report on progress and measure impact.
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