The “Fair Trade” label is a reassuring beacon that a purchase is part of something bigger than itself. With between 50 and 70% of the world’s coffee grown by small family farmers, they are often subject to a loss of profit in a long chain of middlemen, exporters, brokers, importers, roasters, distributors and retailers. This conventional trade route from bean to cup is feed extensively by crop grown on large estates and coffee plantations that make up the remaining percentage of coffee farmers. The estates often employee migrant workers at poverty level wages as owners hoard the already small profits.
When an indigenous people can maintain a small family farm they traditionally held no control of the bean once an industrialized processing mill buys the crop. The farmers got only 2% – 4% of the final retail price that as www.transfairusa.org indicates, “Trap farmers in a cycle of poverty and debt.” The family farmers traditionally lacked transportation and agro-technology relying on often corrupt Middlemen and Exporters reinforcing this cycle and forcing estates to pay workers less. Farmers’ children often left school early to work to make ends meet. Cut short of fundamental literacy and mathematics it became an uneducated struggle to manage a family business.
Paid only $0.25 per pound, it takes 4,000 beans handpicked by farmers to make one pound of coffee. “Coyotes”, as middlemen are known in Latin America, paid the farmers less than what the beans cost to grow. This is where Fair Trade comes in, eliminating the middleman and exporters, making certified importers guarantee to pay at least $1.26 per pound. Fair Trade importers put the money consumers pay for coffee directly into the hands of the farmers.
The Fair Trade route starts with the 800,000 producers of between 20 – 25 million farmers and plantation workers growing coffee beans according to the FairTrade Labeling Organization (FLO). Specifically, under the FLO the TransFair USA umbrella organization covers close to 550,000 farmers organized into 300 cooperatives across Africa, Asia and Latin America. As coffee roasters and distributors caught on it lead to what TransFair USA reported as 7,000 retail locations carrying the Fair Trade logo in 2002. As of 2005 their logo is seen in more than 33,000 locations in stores such as Albertsons, Harris Teeter, Publix, Safeway, Trader Joes, Whole Foods, Wild Oats, and hundreds of cafes.
As consumer demand grows, the profit funneled directly to farmers enables them to invest in transportation and agro-technology. Many farms have taken on organic growing practices boosting the price they are paid to $1.41 per pound. TransFair USA estimates that these farms earn 3 to 5 times more then their days of muddling through corruption and exploitation.
When local leaders embrace Fair Trade and unite farmers into co-ops, economic conditions improve becoming a forefront in further equality movements. One example is in agronomist and co-op manager Fatima Ismael Espinoza from Jinotega, Nicaragua who helped release a coffee blend from the hands and minds of local women. “Las Hermanas” was brought to market in 2001 as testament to the progressive impact seeded by Fair Trade. The success of those women blossoms from the 650 member cooperative of Jinotega farmers who reduced their almost one million dollar debt by 85% over only 6 years.
The influence and success of Fair Trade will only grow in the larger scope of the United Nations’ Millennium Goals. In accord with the philosophy of Fair Trade the Millennium development plan aids impoverished countries in debt relief and by committing industrialized nations to give 0.7% (less than a penny of every dollar) of their gross domestic product. It boldly strives to be the end of poverty and Fair Trade systems will be essential in nourishing newly developed economies.
Succeeding in exactly what the Millennium Goals hope to achieve, from Ethiopia, the motherland of the coffee bean to the nearly 5 million Brazilian coffee workers, Fair Trade can harvest the assuage of poverty. TransFair USA’s producer profiles show how the increased profits have built and improved schools for farmer’s children, even offering scholarships. Education also extends to training programs for farmers and in farm management leading to better business models. With improved banking and loan systems, additional to micro-credit the farmers then build better infrastructure.
Beyond the infrastructure of farms their prosperity builds roads, housing, warehouses for storage and repairs on all existing structures and equipment. Within a renewed structure also comes improved quality of life in healthcare, insurance, disaster relief and consumer goods. Where many of the initiatives are a fresh start for farmers, they can establish sustainability in organics and environmental stewardship. Soil and land quality flourishes giving farmers more exports with a product in demand and less imports with crop diversification.
Some of the co-oops have existed since the early 1980s, but the Fair Trade Label established under the FLO, based in Germany was launched in 1989. Ten years later TransFair USA opened the market to certified US importers and is now a primary overseer of Fair Trade products. The FLO label, among other Fair Trade labels such as the Fair Trade Federation, also extend to teas, chocolate, fruits, sugar, jewelry, clothes and handicrafts. Coffee is by large the token product of Fair Trade by way of economic impact, as well as historically.
The FLO arose from a reaction to steep declines in coffee prices under the guise of the heroic Dutchman Max Havelaar from the Netherlands. Max may have been a fictional hero, but he embodied a fight for the rights of coffee pickers being exploited in the Dutch colony of Java on the island of Indonesia. Max’s literary presence in 1860 by Dutch novelist Multatuli inspired Europeans into the awareness of exploitation of a people for the pleasure of others, namely them. This spirit was the grounds that brewed the pot of the FLO, which originally stemmed from the Max Havelaar label started by Solidaridad, a Dutch development agency in 1988.
In many of the Fair Trade countries, coffee is their largest cash-crop export and globally coffee is second after Petroleum as the most widely traded commodity. Fair Trade organizations can relish in impressive local movements, but the international arena with multinationals like Kraft Foods, Nestle and Sara Lee, dominate 70% of the world’s coffee profits. The Fair Trade market barely penetrates the institutionalized distribution network that harbors an existing system possibly ripe with corruption. What’s more, as Fair Trade stimulates economic vitality, the improved conditions and crop yields face what some in the industry consider a coffee crisis: Overproduction.
If the multinational corporations, who control world prices of coffee, are faced with this dilemma, the Fair Trade system does not have a bright outlook for exponential growth. Farmers, importers and distributors will have to depend on the Fair Trade foundation of customer loyalty. In all optimism this has a foreseeable stability as consumer purchasing power takes on an ethical dimension.
Well known brands of coffee like Starbucks, Seattle’s Best and Millstone have been certified on certain blends. The official logo is a recognizable black and white figure holding a coffee mug in each hand, denoting balance and emulating the yin and yang symbol. The Starbucks Fair Trade blends sell from about $9 per pound to $11 per pound, Seattle’s Best for about $12 per pound and Millstone less than $10 per pound. Brands and retail locations can be searched for on the transfairusa.org web-site or just ask about it at local coffee shops, markets and grocers.
Making a purchase that’s larger than yourself improves the lives of millions. Not just in putting profits directly to producers, but also in raising the bar for multinational corporations to take notice of consumer awareness. The ethos behind the consumer supported Fair Trade labels is a partnership for equality in international trade that encourages sustainable development, securing the rights of marginalized producers and workers. Consequentially, when the people who grow the crops are secure and educated, even coffee will taste a little less bitter.