§ Tony Worthington
To ask the Secretary of State for International Development how her Department is helping small coffee producers in developing countries to diversify into alternative livelihoods following the sustained decline in world prices. 
§ Clare Short
Addressing commodity problems, including those arising from a sustained decline in prices, requires the establishment of a more favourable environment, at both domestic and international level, in order to reduce commodity dependence and encourage value added through processing.
The UK, through its development programme and other endeavours, is supporting a range of actions that seek to expand the trade opportunities for commodity dependent countries. The UK also lends support to a variety of activities within the countries themselves in order to generate the economic growth, and other conditions, that provide enhanced opportunities for livelihood diversification.
§ Tony Worthington
To ask the Secretary of State for International Development what assessment she has made of the impact of the low price of unprocessed coffee on the livelihoods of coffee producers. 
§ Clare Short
The UK forms part of the European Community's delegation to the International Coffee Organisation (ICO) and which deliberates on coffee matters. In 2001, the ICO organised the first World Coffee Conference and which drew attention to the challenges posed by low coffee prices. The UK is also a member of the Common Fund for Commodities which has a particular interest in the livelihoods of commodity dependent peoples, particularly in the least developed countries.31W
The main cause of low coffee prices is oversupply, with production far exceeding consumption. Many poor smallholder farmers, particularly in Africa and Latin America, are dependent on coffee for a livelihood. The dramatic fall in prices has therefore had, and continues to have a significant livelihood and development concerns.
§ Clare Short
[holding answer 30 October 2002]: The current situation of historically low coffee prices is having a significant effect on the livelihoods of very large numbers of coffee producers (who are predominantly smallholders) and those working in related industries and services. The income that people derive from the production and sale of commodities like coffee is influenced by a number of market (price, quality requirements) and non-market (pests and disease, weather etc.) factors. Low prices also have substantial macro-economic effects in terms of foreign exchange earnings, income to the exchequer and hence on debt repayment. Many of the poorest countries, particularly in Africa, remain dependent on a narrow range of commodity exports of which coffee is but one example.
The UK, through its development programme and by working at international level, supports programmes that seek to expand the trade opportunities for poor countries and improve the economic, social, environmental and political framework within which commodity-dependent people derive a livelihood. Diversification, both horizontal (into other economic activities or crops) and vertical (greater participation in value-adding activities within the coffee value chain such as processing) forms an important element of this broader approach.
In many countries we are assisting governments to develop poverty reduction strategies that address the needs of poor producers, taking into account commodity dependence. Ghana, Tanzania and Uganda are examples. We also support capacity building of individuals and producer organisations to better enable them to explore alternative markets and options and engage in the supply chain.
DFID provides support to producers and producer groups to meet the growing range of quality (eg food safety) and performance criteria (eg environmental; social) that increasingly characterise developed country market requirements. We also fund research on smaller producers (eg integrated pest management, germplasm quality, post-harvest management) that aims to provide effective and low-cost solutions for those seeking to diversify both vertically and horizontally.
DFID is also working hard to ensure that pressure is maintained for pro-poor trade reform (including CAP reform)—to ensure that any diversification efforts by poor coffee producers in developing countries are not undermined by unfair trade arrangements. We are also, with other Whitehall Departments, working to ensure that the Common Fund for Commodities is more poverty focused.