About 150 million Americans over 18 years of age drink coffee every day. Of those American adults, 30 million drink specialty coffee beverages such as mochas, lattes, espressos, cappuccinos, frappuccinos, macchiatos, and iced coffee beverages. Recently, a new option has swept menus nationally: Fair Trade.
Fair Trade certification exists to assure consumers that strict social, environmental, and economic measures were taken when the labeled item in question was produced and traded. The idea behind the certification is to create a means for farmers and farm workers to escape poverty – by simply requiring that farmers receive fair wholesale market prices for their crops (as opposed to a small fraction of the total price, which is closer to the world average) By doing this, Fair Trade enables farmers to be competing contenders in the global market.
It can be confusing when it comes to figuring out who actually certifies a coffee with Fair Trade status, as it is a non-governmental movement, but the simple answer is that there are many national and international federations that work together to help companies commit to Fair Trade. Of those on the list, the most internationally recognized is Fairtrade International (FLO), the largest standards-setting body in Fair Trade labeling.
For the most part, Fairtrade International (FLO) works so that that farmers producing coffee with the certification label are part of a cooperative with other local growers. To be certified, the producers and cooperatives have to meet a set of political standards, and pay FLO (or other Fair Trade labelling organizations) a fee for certification. After the farmers are paid back for the market value of their coffee, the cooperative collectively determines how the extra money made is spent (ideally) to benefit the producing communities.
Fair Trade has become increasingly popular in the USA in the past 20 years; from 2004-2005, an increase from .34%-.51% of the total national coffee product was Fair Trade, and since then has only increased, as such companies as Starbucks, Peet’s Coffee and Tea, McDonald’s, and Walmart have started offering Fair Trade brews.
Fair Trade USA, a nonprofit based in Oakland, CA, has been the USA’s leading advocate of Fair Trade coffee since 1998, and is the primary labeler of the products we see in the US. Their aims to “enable sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth,” have had positive effects in various ways. Under their watch, Fair Trade funds have helped to expand healthcare availability in coffee countries, empower women, increase access to education, and encourage the communities in their cooperatives to design their own projects based on their unique needs. In 2009, Fair Trade USA raised the average price-per-pound that is paid back to the farming co-ops to $1.69, far above the market price of $1.25.
But how fair is Fair Trade? Is it an ethical decision, or just another popular flavor?
The aim of Fair Trade coffee is indisputably positive – no one wants fellow humans to have to mortgage their future or sacrifice their rights. Unfortunately, the decision to buy Fair Trade is not as black and white as one might think. What other variables should you consider when buying a cup of Fair Trade coffee?
Large Corporations and Fair Trade
One thing critics first consider is what it means to buy Fair Trade from major corporations, like Walmart. If Walmart can afford to sell Fair Trade coffee, and do so in the thrift Walmart-ian way that Walmart promises, it causes one to wonder how. Even if they are buying coffee fairly from farmers, they are forced to compensate for lost profits somewhere else, and since we can’t verify where those cuts are made (employee benefits or wages? other products? etc). These big corporations hurt the smaller sellers who sell Fair Trade for more than just economic reasons, as they lose their Fair Trade market to the larger companies that sell it for cheaper. So while some aspects are fair, others may not be – and a consumer’s decision, while well-intentioned, may support a less-than-fair business practice without even knowing it.
Additionally, people may be pleased to see that Walmart, Starbucks and McDonalds have taken a step to offer Fair Trade brews. Yet, out of the dozens of different brews of coffee at each of these establishments, typically only one or two options are Fair Trade, the one exception being Starbucks, who bought over 428 million pounds of coffee in 2011, 86% of which meets Coffee and Farmer Equity (C.A.F.E.) Practices, Fairtrade, or another externally audited system.
Furthermore, if the majority of the coffee that chains sell is not Fair Trade, this highlights to critics that the companies are using Fair Trade as a simple trend or “flavor” used for economic reasons, rather than a commitment to ethics.
High-Quality Farmers Who are Not Part of a Fair Trade Co-op are Hurt
High-quality, organic coffee bean farmers may have to charge more than $1.41 per pound – the current Fair Trade floor price – for top quality organic beans (Starbucks paid an average of $2.38/pound in 2o11). This means that opting for Fair Trade rather than other gourmet roasts may compromise the quality of bean, and it does not necessarily ensure a better return for coffee farmers.
Critics argue that the Fairtrade International (FLO) brand particularly (but not all other Fair Trade businesses), harms non-FLO farmers. FLO’s farmers are said to be paid higher prices and are given advice on techniques, both of which will lead to increased output on the global market. If output is increased, and coffee is economically inelastic, then the market price of coffee will decrease. The result? FLO farmers will get a higher price while the majority of other Fair Trade farmers get a lower price.
Difficult to Regulate
Fair Trade is nongovernmental, making it hard to regulate. Some critics are skeptical that Fair Trade companies rarely disclose how much extra they charge for their branded coffee and how much of this extra charge actually reaches the third world. In one case where this info was found, it was revealed that a British café chain was passing on less than one percent of the extra charged for Fair Trade to the exporting farming cooperative.
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Both sides of the Fair Trade tension have well-developed arguments, and as with every purchase, it is up to the consumer to decide what to buy. Perhaps having large corporations promote Fair Trade coffee for economics is not a bad thing, but brings the deeply complicated issue to the table for discussion. Perhaps these larger corporations promoting competition actually sets standards for the smaller ones.
There are many factors to consider, but if money is the issue holding you back, fear not! Many trustworthy, small, companies sell 100% organic and Fair Trade brews for comparable prices to the standard pound of coffee.
- Equal Exchange’s 14 oz. Organic Bird of Paradise brew is $11.99, which is comparable to Peets’ House Blend that is sold at $12.50 a pound.
- The Santa Cruz Coffee Roasting Company sells all organic, Fair Trade blends for $11.95 a pound. (And I can vouch for this company – delicious!)
- Dean’s Beans also sells 100% organic, 100% Fair Trade beans for $8.59 a pound. If you are looking to do more fair trade research, Dean is a passionate high-quality coffee roaster and advocate of uncorrupt Fair Trade. More info on the industry and Dean’s delicious brews can be found at Dean’s Beans.
“None of us want to be accessories to a human-rights abuse in a global supply chain. But right now, most of the companies involved in these supply chains don’t have any way of assuring us that nobody had to sacrifice their rights to bring us our favorite brand-name product.” — Auret Van Heerden, Fair Labor Association. For more exploration of Fair Trade in coffee and other products, listen to his TED Talk.
Featured image by Adam C. Baker (Originally uploaded to Flickr as Fair Trade), via Wikimedia Commons
