Wake Up! The True Grind On Fair Trade Coffee
By Jillian Polaski
Filed Under The Big Picture |
With 54% of America drinking coffee on a daily basis and 25% being “occasional” coffee drinkers, we can safely say that approximately 80% of the population is very familiar with sipping a cup of joe. Second only to oil, coffee is the most traded commodity in the world, with the United States alone consuming one-fifth of total global production.
Yet, as demand for this roasted bean rises, value is sharply declining. In August 2001, the price of coffee fell below fifty cents per pound, although the prices in coffee houses and grocery stores remained constant. This means a sponging of excess profits by all parts of the coffee industry except the farmers in poverty-stricken countries such as Ethiopia that grow some of the most high-quality beans in the world. This is not an unusual story in the coffee industry.
Before opening The Cup espresso cafe in Boulder, Colorado, owners Chris and Wendy Ball began doing research on the different varieties of coffee and were appalled to uncover the conditions that many farmers are forced to work under. In defiance, they decided to sell only Fair Trade certified organic coffee. “We wanted to make sure that the business we chose to do was not being done on the backs of slave labor,” says Chris. The walls of their funky and modern cafe, rather than being lined with salable art, are lined with pictures of coffee farmers and their families engaging all stages of bean production. “Putting faces to these people is super important,” Chris says.
Due to coffee being an internationally traded commodity, its price is dictated by many of the same market factors involved in the sale and production of oil. The people who farm the coffee have no access to the markets and this leads to huge price instability. When a farmer begins planting their crops, prices might be, for example, $3.00 a pound, but by harvest time it could have dropped to $1.00. Of that price, the farmer generally does not see enough to meet their costs of production, much less to feed a family. Part of the problem is the roller-coaster of supply and demand. Coffee is a delicate crop that can be destroyed at any stage of the process, from planting and harvesting to roasting and brewing. It is prey to natural disasters (common in most tropical growing climates) and a hurricane or tsunami can easily wipe out an entire annual crop. When this happens, the price of coffee soars, farmers see an opportunity and begin planting coffee, which leads to an over supply when all the plants recover, and the price plummets even further.
In addition to the stress of widely fluctuating market prices, coffee farmers also have to worry about Coyotes. No furry animal, these money-hungry middlemen pass through and demand that farmers sell their harvests to them at a set, sub-standard price. Because farms are generally far removed from their marketplaces and the farmers usually have an immediate need for money to buy food and pay their expenses, they are left with no choice but to sell. “It’s a brutal system that stacks itself against the people at the very bottom,” Chris explains.
Fair Trade policy (created by Transfair USA and monitored by the Fair Trade Labeling Organization and third-party organization FLO-CERT) attempts to alleviate many of these problems by establishing a set price per pound for coffee. This allows market fluctuations over the course of the harvest to be smoothed out by guaranteeing farmers a living wage. Fair Trade farmers are currently paid $1.26 per pound of coffee. If, however, the market price goes higher than that, the farmer is paid the market price plus five cents, or eleven cents if the coffee is organically grown.
In addition, Fair Trade policy guarantees free financing to farmers so that they won’t feel pressure to sell their crops at a low price because of momentary hardships. Technical assistance is also provided so time can be taken to improve the quality of their beans and therefore garner the higher prices per pound that specialty coffee sells for. Finally, it gives farmers access to international markets and allows them to participate in international debate. “It gives the people a voice and allows them to have some power over their own lives,” Chris says.
Fair Trade coffee is not, however, without its problems, and one of the main issues it currently faces is green-washing. Big corporations have figured out that Fair Trade coffee sells, and consumers are more than willing to shell out more money in support of the humane treatment of farmers. Many coffee houses in the EU and North America advertise that they carry Fair Trade coffee, but only sell it in whole bean packages on the shelves; they don’t brew it. Or, worse, companies will pay the Fair Trade price for a pound of coffee, but won’t adhere to the other policies of Fair Trade, yet still label that coffee as fairly traded.
“Corruption is one of the largest scapegoats that people say they use as a reason not to buy Fair Trade coffee,” Chris explains. “I acknowledge that there are some problems with it but my answer is, at least it is trying. You can’t wait for the silver bullet to start shooting at the problems that are out there. You have to use the tools that you have available to you right now to make a difference.”
It is a chain of responsibility- from the certified organizations to ensure all companies that use their labels are meeting strict regulations to the consumer remaining informed about these issues. Corruption is a problem that consumers have to pay an increasing amount of attention to. The best thing to do is to ask the right questions at a local coffee retailer. If a coffee shop has organic, Fair Trade certified coffee on their shelves but they aren’t brewing it, ask them to. If it is labeled as “fairly traded” but does not have a certification- it is probably not an accurate representation of what goes on behind closed-doors. For Fair Trade to succeed, it means a holistic integration of economic, social and environmental responsibility on everyone’s part.
- Get informed on the current state of fair trade policy by un-biased organizations such as Oxfam
- Search for retailers near you that are dedicated to supporting the fair trade movement by only serving certified coffee
The terms “shade-grown” and “organic” seek to further enhance the social and environmental quality of coffee growing environments. Organic production has it’s own certification that places harsh limitations on chemical pesticide and fertilizer use. If coffee is “shade-grown” it means that farmers are able to grow other crops (like bananas) amongst their coffee plants, therefore providing them with additional income.
Posted on September 29, 2008 |
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9 Responses to “Wake Up! The True Grind On Fair Trade Coffee”
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Ok- THANK YOU for writing a clearly researched, succinctly written article that gives people what they need to know about this issue. I have always been confused about what is fair trade, what isn’t, what the certification entails and what the major issues where. I also was confused about the term “shade-grow” that is often thrown into the mix- I am now a more enlightened (and dedicated) drinker of the roasted bean!
Great article Jilian.
And thanks for one of the best espresso pulls in Boulder Chris!
Check this info out from Global Exchange:
“Coffee is the world’s second most valuable traded commodity, behind only petroleum. There are approximately 25 million farmers and coffee workers in over 50 countries involved in producing coffee around the world. Coffee was traditionally developed as a colonial cash crop, planted by serfs or wage laborers in tropical climates on large plantations of landowners for sale in colonial countries. Coffee producers, like most agricultural workers around the world, are kept in a cycle of poverty and debt by the current global economy designed to exploit cheap labor and keep consumer prices low. An estimated 11 million hectares of the world’s farmland are dedicated to coffee cultivation. The largest producer and exporter is Brazil, followed by Colombia, Vietnam, Indonesia, and Mexico. Around the globe, the annual consumption of coffee has expanded to 12 billion pounds. For more information about the history of Latin America and coffee, see Coffee and Power by Jeffrey Paige (in bibliography)”
A great overview on where we’re currently at in developing Fair Trade standards. It was important to note how cafes advertise their fair trade beans and brews. At my old favorite coffee spot, Gorilla Coffee in Brooklyn NY, everything brewed and sold is fair trade and promoted as such. Unfortunately as I’m getting settled in a new town, it isn’t always quite as clear at the cafes that I’ve been to. These are independent shops, but it’s also interesting to note that Dunkin Donuts has been selling fair trade espresso for years but only began advertising it as such recently as awareness of these standards grows. However, the rest of their brews are not fair trade to my understanding, and sold in styrofoam cups as well! Still as one of the largest sellers of coffee in the U.S., it feels like progress.
Great article Jillian. Any scoop on Starbucks and Fair Trade? Do you know if Fair Trade coffee is their regular “brew”?
I am a distributor for a Fair Trade 100% organic coffee. The beans go right from our farmers to our roaster then right to the customer. Thanks for the great info on the Fair Trade issue. We also make sure that1 10% of our corporate profits goes back to the region by helping the Invisible Kids program.
Also since we do not flame roast this coffee it is one of kind and very low acid. Get a free sample at http://drinkcoffeegetpaid.com
Thanks
Dr Robin Rushlo
this is a pretty good article! well researched and fairly accurate. one important comment though, fair trade coffee does not “guarantee free financing”. trans fair usa’s website states that “Farmer organizations are also eligible for pre-harvest credit” whatever that means. note the distinction here, it is guaranteed, and it is credit (not free). with these “credits” or loans come interest.
Also note that pre-harvest financing (credit) is not required for a roaster to use the Trans Fair USA Certified Fair Trade “bucket-boy” logo on their package. I say this because more and more roasters are claiming that they do this for producer cooperatives. I’m assuming they claim this because they’re buying the green coffee from an importer and assuming the importer is extending this benefit to the producer cooperative. The importer only has to attempt to secure credit for the producer cooperative if the cooperative asks for it. Often times, even economically secure importing companies do not succeed at securing this financing for cooperatives.
on another note, it’s important to realize that when you see the “bucket boy” Trans Fair logo on a product, it only certifies that product and not all the other product the roaster offers. The term green washing refers to a roaster who carries a small percentage of Fair Trade offerings yet promotes the Fair Trade concept with literature and point of purchase material so as to convey an image of “doing the right thing” when, in most cases the non-fair trade offerings they supply subsidize the more costly fair trade items.
I say this because it’s important to support roasters/companies who are 100% committed to fair trade.
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Thanks to Mark and Mel for digging into a dark corner of this issue and shedding even more light.