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Starbucks Teams with Aid Agencies to Support Sustainable-Coffee Farmers

MEXICO CITY - Sept. 28, 2004 - Seeking to improve the livelihoods of small-scale coffee farmers while conserving the environment, the U.S. government, working through the United States Agency for International Development (USAID), has joined forces with Conservation International (CI) and Starbucks Coffee Company to create the Conservation Coffee Alliance.

With a focus on Central America and Mexico, the Alliance promotes private sector approaches within the coffee industry that are environmentally sensitive, socially responsible and economically viable. The U.S. Ambassador to Mexico, Tony Garza, hosted the official signing of the memorandum of understanding in Mexico City launching the Alliance.

"USAID began its environmental activities in Mexico in 1989 and was the first bilateral donor to support the Mexican Government and conservation community's efforts towards sustainable development," said Adolfo Franco, administrator for Latin America, U.S. Agency for International Development. "Since then, USAID's commitment to conservation and social welfare has grown stronger. USAID is proud to support the Starbucks - Conservation International partnership for the benefit of local communities living in one of Mexico's important ecosystems. This Alliance approach is a new, creative way of doing business. It combines market forces and business interests to help improve the lives of rural people and the environment worldwide."

Building upon the success of the six-year partnership between Starbucks and CI, the Alliance uses a field-to-cup approach to community-level conservation that includes all aspects of producing, processing and marketing specialty coffee. The work supported by the Alliance is intended to provide economic incentives and technical assistance that will enable small-scale farmers to adopt conservation practices while producing high quality coffee. Activities will focus on CI's Conservation Coffee projects in Mexico, Costa Rica and Panama. Alliance efforts have been funded by three-year commitments from USAID and Starbucks at $1.2 million and $1.5 million respectively.

"By uniting the strengths of the government, conservation and private sectors, we are breaking new ground in supporting small-scale coffee farmers and raising the scale of biodiversity conservation in Mexico and Central America," said Glenn Prickett, senior vice president, Conservation International. "The alliance will demonstrate practical, cost-effective methods to improve the ecological, economic and social integrity of the world's quality coffee growing regions."

The goals of the alliance include increasing the number of coffee producers participating in the Conservation Coffee program, expanding the area of coffee fields that are being farmed using best practices, and making more high quality sustainable green coffee available to roasters. The Alliance will also engage with interested stakeholders that share its goals. The long-term objective is to broaden the resource base available to support small-scale coffee farmers and biodiversity conservation and enhance the ability to drive meaningful and measurable changes within the coffee industry.

"One of Starbucks highest priorities is working with farmers and their communities to encourage and expand the production of high quality, sustainable coffee and support farmers' success into the future," said Dub Hay, senior vice president of Coffee, Starbucks Coffee Company.

Since Starbucks and CI began working together in 1998, the collaboration has produced significant benefits for habitat conservation and farmer livelihoods in Mexico, Colombia and Peru. Beginning with its flagship site along the buffer zone of the El Triunfo Biosphere Reserve in southern Mexico, CI has established several Conservation Coffee project sites within regions scientists have classified as biodiversity hotspots. The 25 biodiversity hotspots make up just 1.4% of the planet's surface, yet harbor more than 60% of all plant and animal diversity, and are under increasing threats according to CI.

CI works directly with farmers to promote environmentally responsible growing practices such as water and soil conservation, crop diversification, and chemical fertilizer and pesticide reduction that help protect the surrounding forest, streams and wildlife. Starbucks works with CI and the cooperatives providing farmers with financial support, technical assistance to raise the quality of their coffee and a market for their crops. Last year, Starbucks purchased 1.8 million pounds of Conservation Coffee at price premiums ranging from 60% to 200% higher than local prices in Colombia, Mexico and Peru.

Additionally, CI manages the $6 million Verde Ventures fund, which provides debt and equity financing to coffee cooperatives and other small businesses contributing to biodiversity conservation in CI's priority areas. In January 2004, Starbucks announced a $2.5 million direct loan to help capitalize the fund.

Starbucks has also enabled consumers to support these conservation efforts by making the high quality, sustainable coffees from Conservation Coffee project available to Starbucks customers across North America and in select international markets. These coffees include Starbucks Organic Shade Grown Mexico, Decaf Shade Grown Mexico, Conservation Colombia and Starbucks Peru.

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