Appeal: Africa's coffee farmers ground down by thriving global market

This is not the usual story from Ethiopia. Mohammed Ali Indris has work. He even employs a labourer. He has two hectares of land. Until recently, it provided his family with the income to buy food, clothes, medicines and education.

He is not a victim – or not, at any rate, of drought, famine, disease or some other natural disaster. But his story is crucial to understanding the depth of the problems that the continent of Africa faces.

Mohammed lives in Kafa, the province that gave its name to the crop that originated there: coffee. The peasant farmer, 36, is one of 15 million Ethiopians – a fifth of the entire population – who rely for their living on the crop of arabica coffee, the finest in the world, organically produced in the land to the west of the Great Rift Valley.

There is no drought in Kafa. Rainfall is abundant, vegetation lush and the soil so rich that it needs no fertilisers or pesticides. The coffee bushes grow under the shade of acacia trees in which monkeys and wild hogs forage. Yields are good.

And yet the same crop of seven sacks of "red cherry" buys Mohammed's family only a quarter of what it did seven years ago. Coffee prices have plunged to a 30-year low, declining more than 70 per cent in the past four years alone.

It is not just coffee. The price for most African commodities has plummeted in recent decades. So much so that the continent, instead of developing, has been going backwards. This is, as a recent Oxfam report put it, "a stunning policy failure at every level".

But coffee is a graphic example. The price has dropped because of world supply, thanks largely to massive increases in production in Vietnam and Brazil. These have come about since the collapse of the International Coffee Agreement in 1989, which kept the price stable by agreeing quotas limiting the amount individual countries could export. The shift from a managed market to a free-for-all has had dire consequences for people such as Mohammed.

Macro-economists talk about allowing the market to find a balance between supply and demand, but Mohammed, who supports a family of 12 – including the four sons of his dead brother – knows the human cost of that easy phrase.

"Three can't go to school now because I can't afford the uniform," he says. His family have stopped eating meat, butter and oil. "We are just eating corn. The children's skin is getting dry and there are signs of malnutrition."

The reality of "allowing the market to bring supply and demand back into line" could involve the deaths of hundreds of thousands of children like Mohammed's. Something has to be done, according to the Oxfam report, Mugged: Poverty in Your Coffee Cup.

The irony is that the coffee industry is thriving. Despite a slight overall decline in consumption, the arrival of a Starbucks on every city centre corner and the growth in the speciality coffee market means that profits are up. Most money, however, is made by the five big roasters – Kraft, Nestle, Procter & Gamble, Sara Lee and Tchibo – which buy almost half of the entire global supply.

Mohammed is lucky to get just one per cent of the price of a jar of coffee on the supermarket shelf. Nestle, by contrast, gets about 26 per cent profit per jar of instant brand.

It's not enough to shrug our shoulders and blame the market. There are, Oxfam reveals, moral questions. Mohammed is too poor to travel and sells his coffee to whichever trader turns up after harvest. In the same way, the Ethiopian Export Promotion Agency, which controls only 3 per cent of the world market, has no bargaining power against the massive transnational roasters.

There are questions, too, for the World Bank and International Monetary Fund (IMF), whose "one size fits all" economic adjustment policies persuaded poor countries to boost their export of raw materials. The result is that all of the poor nations are "running for the same exit", Oxfam says. In failing to give proper advice on the impact of increased production on world prices, the Bank and IMF were guilty of a "dereliction of duty".

Nor do the Western donor nations escape criticism. They have "contributed directly to the crisis by deeply neglecting investment in rural development" to encourage low-productivity coffee farmers to seek alternative incomes. Oxfam also attacks the "double standards" that require poor nations to open their economies to Western companies while heavy protectionism is used to block them out of rich-country markets.

To Mohammed Ali Indris it all looks deadly simple. "Our lives depend on coffee. Coffee is everything for us," he says. It may be deadly, the work of agencies like Oxfam shows, but it is far from simple. And we in the rich world are complicit in its complexity.