Starbucks Unveils Plan to Reward Suppliers

Starbucks Corp. unveiled a plan to pay coffee suppliers up to 10 cents more per pound if they protect the environment and abide by local minimum-wage and worker safety laws.

The test program comes as the coffee industry faces a worldwide glut that has pushed wholesale prices down 40% over the last year, to around 40 cents per pound.

With prices so low, Starbucks senior vice president Mary Williams said, some coffee producers are not being paid enough to grow the high-quality coffee Starbucks needs.

The Seattle-based coffee chain has been paying an average of $1.20 per pound, and has not reduced its payments as the wholesale price has fallen in the last year. However, Starbucks coffee also retails for above-average prices.

Starbucks rose 7 cents to $19.10 on Nasdaq.