Glossary and Definitions

Certification

Certification guarantees (through a certificate) that specific rules and regulations of voluntary standards are met in a particular environment (e.g. individual producer, producer group, cooperative or even region). These producers must meet certain requirements - social, economic and/or environmental.

Certification calls for independent third-party confirmation of this status, conducted by an accredited auditor. Typically, certifications must be renewed annually are designed to protect both buyers and suppliers. Roasters buying certified coffee benefit from the guarantee provided by the certificate and by using the sustainable branding on their retail packaging. This contributes to better marketing opportunities because of a specific market demand for certified goods. 

A Circular Economy

A Circular Economy model for the coffee sector designs, balances, and implements regenerative practices, resource efficiency, and waste reduction, while creating value from process outputs to achieve environmental, social and economic sustainability. Driven by a systemic and holistic approach, it draws inspiration from the dynamics of natural systems to regenerate, maintain, and create shared value for all stakeholders, across different contexts and within the entire coffee value circle.

ITC Circular Economy Working Group (2024)

Climate change adaptation

Climate change adaptation is ‘the process of adjustment to actual or expected climate and its effects. In human systems, adaptation seeks to moderate or avoid harm or exploit beneficial opportunities.

In some natural systems, human intervention may facilitate adjustment to expected climate and its effects’. This adjustment includes many areas such as infrastructure, agriculture and education. In the coffee sector, climate change adaptation typically consists of technical solutions to adapt coffee production and processing to climate changes. Long-term strategies are needed to improve conditions to adapt to future climate risks and build capacities as required, including the development of financing mechanisms.

Intergovernmental Panel on Climate Change (2014) and ITC (2012).

Climate change mitigation

Climate change mitigation is a ‘human intervention to reduce the sources or enhance the sinks of greenhouse gases’. Human interventions reduce the sources of other substances that may directly or indirectly limit climate change. These include reducing particulate matter emissions that can directly alter the radiation balance (e.g. black carbon) or measures that control emissions of carbon monoxide, nitrogen oxides, volatile organic compounds and other pollutants that can change the concentration of tropospheric ozone, which has an indirect effect on the climate.

In the coffee sector, climate change mitigation often refers to measures to reduce greenhouse gases to help protect the climate and generate carbon credits. It targets all value chain actors, from producer to consumer.

Intergovernmental Panel on Climate Change (2014) and ITC (2012).

Crop year

Crop year. Coffee is a seasonal crop. Seasons vary from country to country, starting and finishing at different times throughout the year. This makes statistics on worldwide annual production very difficult to collate: any single 12-month period may encompass a whole crop year in one country, but will also include the tail end of the previous year’s crop and the beginning of the next year’s crop in others. To compare supply aggregates as well as supply with demand, where possible supply data have been converted from crop year to coffee year (which runs from October to September). It should be noted that this is not always possible.

Exportable production

Exportable production is total annual production less domestic consumption in producing countries. Availability for export is equivalent to the carry-over stocks from the previous year plus exportable production of the current year. Any difference between exportable production and actual exports (surplus or shortfall) results in an adjustment up or down of the carry-over stocks to the following year.

Exportable supply

Exportable supply is defined as supply minus domestic consumption and an amount deemed to be required for working stocks.

Living Income

'Living Income is the net annual income required for a household in a particular place to afford a decent standard of living for all members of that household.’

Living Income Community of Practice, 2019

Organic agriculture

Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved.

IFOAM - Organics International

Supply

Supply is generally defined as the sum of production in a given coffee year plus stocks carried over from the previous year. 

Global coffee supply = world production in that year + opening stocks in producing countries + opening stocks in importing countries, also called inventories.

Exportable supply is defined as supply minus domestic consumption and an amount deemed to be required for working stocks.

Sustainability

Sustainability is a holistic approach that considers ecological, social and economic dimensions, recognizing that all must be considered together to find lasting prosperity.

Sustainability consists of “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” This is not a new concept. The definition builds upon the 1987 definition of "Sustainable development” proposed in Our Common Future, also known as the Brundtland Report, that was published by the World Commission on Environment and Development.

Paradox, Coffee

The coffee paradox is the stark divide between decreasing and unstable prices for farmers and increasing prices for consumers.

Daviron and Ponte, 2005

Verification

Verification enforces certain agreed criteria and practices, but does not use a certificate to market the claim to the final consumer. Instead, company standards or internal supply chain standards rely on verification processes that are not as rigid and costly as a certification process that has to be conducted by appointed auditors. Local third-party actors such as NGOs – or even second-party actors – may be asked to verify adherence to specific criteria. The timing between repeat verifications may be significantly less onerous than an annual recertification process.

Working stocks

Working stocks are not precisely defined. They relate to the volume of coffee required to maintain a steady and planned flow of exports to the market. They are generally perceived as the amount of coffee in the pipeline in an exporting country at any one time. Harvesting and export patterns vary from country to country. As a result, working stocks are not defined as a fixed percentage or proportion of a country’s production or export capacity, but rather as an individual amount unique to every country. In many respects, the calculation of working stocks is arbitrary, but it is generally based on historical data for each country.