Fair Trade Coffee

What is Fair Trade coffee? Where does it come from and who makes it? Is it organic coffee or is it a gourmet coffee brand? Is Fair Trade a good cup or coffee or just an expensive one?

Fair Trade Coffee

The idea behind Fair Trade coffee is provide a price floor for small scale coffee farmers for their coffee. The FairTrade.org.uk website writes about coffee farmers and the beginnings of the Fair Trade idea.

Fairtrade was started in response to the dire struggles of Mexican coffee farmers following the collapse of world coffee prices in the late 1980s. With Fairtrade, certified coffee producer organisations are guaranteed to receive at least the Fairtrade Minimum Price for their coffee, which aims to cover their costs of production and act as a safety net when market prices fall below a sustainable level. Through their producer organisations, farmers also receive the additional Fairtrade Premium to invest in business or community improvements.

The coffee bean is subject to the same swings as other agricultural commodities and farmers cannot simply cease coffee production until prices recover. Fair Trade tries to protect their small farmers and farmers cooperatives from ruin during down times.

 

To achieve the benefits of fair trade coffee look for the Fair Trade International Logo

Fair Trade International Logo

 

Small Coffee Farms Help by Fair Trade

The coffee market is huge and worldwide but the majority of coffee is produced on small coffee farms by the small producer or cooperative. None of these growers have the pricing power to gain a better market share or better price. They are largely at the mercy of a global supply chain. And the profits increase as one ascends the supply chain away from the coffee farmer.

Fair Trade Coffee Helps Smooth Out Boom and Bust Cycles

When there is a good year more coffee is produced that can be sold at reasonable prices. But, at the same time the costs of the small coffee farmer do not change. The situation in Mexico in the 1980’s was just one example of the boom and bust cycles that can devastate both small and large coffee farmers. A price guarantee for Fair Trade coffee helps farmers survive when the price of coffee falls.

A Unique Product and Supply Chain

We have written about gourmet coffee brands and have noted that these folks have well known brands and do not have a problem selling their product and making money. This is the situation that Fair Trade wants to copy. To do this they help coffee farmers take care of their land and grow better coffee. And they market their product to coffee drinkers as coffee that is good to drink and good for the coffee farmer.

But, to sell Fair Trade coffee it has to pass through the supply chain to the coffee roaster and to you. Thus there are Fair Trade certified growers and coffee roasters.

More Than Just Coffee

Coffee is not unique in being produced by small farms and being subject to boom and bust cycles. So, as Fair Trade has grown it has included bananas, chocolate, cotton, flowers, sugar, tea and many other commodities to its list of Fair Trade products.

Fair Trade Coffee versus Organic Coffee

Is fair trade coffee the same as healthy organic coffee? When does fair trade coffee differ from organic coffee and when are they the same thing? Fair Trade certification is not the same as USDA organic coffee certification. However, there are certified organic coffees produced by Fair Trade farmers. And Fair Trade coffee farmers learn and apply sustainable agricultural practices. So, much of Fair Trade coffee is organic coffee in fact even if it is not certified. Fair Trade coffee farmers learn to avoid synthetic fertilizers, herbicides, pesticides, fungicides and other chemical that get into the coffee and linger in the soil and water table. Unfortunately, to be certified as organic, a grower needs to have their soil tested and have in place a verified plan for every practice and procedure starting with planting and including crop maintenance, harvest, de-husking, bagging, and transport. And at all times organic coffee must separated from non-organic coffee to avoid cross contamination. This is simply too expensive and difficult for a small and subsistence coffee farmer to do.

Does Anyone Else Follow the Fair Trade Coffee Model?

We have written about both UTZ and Rainforest Alliance. Both of these organizations follow a plan similar to that of Fair Trade. They teach small coffee growers how to farm better and they help the farmer get a better price for his or her coffee. These organizations are also concerned about child labor practices and childhood education. Both of them also deal with a wide variety of food products and not just coffee.

 

Rainforest Alliance has a system similar to the Fair Trade coffee approach to supporting small farmers

Rainforest Alliance

 

Where Does the Money Go with Fair Trade Coffee?

Fair Trade coffee is a wonderful idea but does this system achieve its stated goals? An article in The Guardian discussed not so fair trade. It wonders if enough of the money brought in by Fair Trade prices goes back to farmers in developing countries.

Economist Paul Collier argues that Fairtrade effectively ensures that people “get charity as long as they stay producing the crops that have locked them into poverty”. Fairtrade reduces the incentive to diversify crop production and encourages the utilisation of resources on marginal land that could be better employed for other produce. The organisation also appears wedded to an image of a notional anti-modernist rural idyll. Farm units must remain small and family run, while modern farming techniques (mechanisation, economies of scale, pesticides, genetic modification etc) are sidelined or even actively discouraged.

Part of the problem is that they need to sell Fair Trade coffee at a bit of a premium in order send money back to farmers. But the advertising and promotional costs cut into available revenues. There appears to be a tightrope that these folks need to walk in order to fulfill their mission.

Where Can You Get Fair Trade Coffee?

One easy place to try a cup of Fair Trade coffee is your local Starbucks. 100% of their espresso roast is Fair Trade coffee. However, Starbucks is not 100% Fair Trade. Rather they say that their coffee is “ethically sourced.”

An offshoot organization in the USA is Fair Trade America. Their website lists where you can get Fair Trade coffee. These sources include both coffee shops where you can walk in for a cup and online sources as well. A competing USA organization is Fair Trade USA. They have a similar set up and purpose.

 

Fair Trade America provides Fair Trade coffee to customers and benefits to its coffee farmers

Fair Trade America Logo


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