Someone once wrote in a song that “the rich get richer and the poor get children.” According to industry statistics, for every pound of coffee sold in the U.S. (with a typical retail price of from $5 to $9), the average coffee farmer receives less than thirty-five cents, while the average picker would garner less than fourteen cents. The disparity is even greater when the coffee is sold by individual cups. The price of coffee was once protected by a set of multinational treaties called the International Coffee Agreement (ICA). According to a United Nations report submitted in 2005, between 1980 and 1989, the International Coffee Council Composite Indicator Price for coffee averaged just under $1.28 per pound. But in 1989, the ICA collapsed, and with it, the price of coffee.
Up to 15 years later (between 2000 and 2004), the average price had still not recovered, reaching only 54.33 cents per pound. The same report estimates that some 125 million people worldwide depend upon coffee for their livelihood. A small number of more fortunate coffee growers were able to form new relationships with specialty coffee associations, disaster relief groups, or other organizations that enabled them to stay in coffee farming and make a living at it. In many situations and countries, however, farmers were unable to eke out even a meager existence by growing coffee. They no longer had money for basics such as education or medicines. Many simply abandoned their farms, turning instead to crowded urban areas where there was already a high level of unemployment or underemployment. Farmers also emigrated illegally in an attempt to find work of any type; low coffee prices stimulated increased planting of narcotics.
In 1997, a number of diverse groups (including some of the specialty coffee associations and disaster relief organizations), attempting to find a way out of this increasingly bad situation, joined forces to form FLO, Fair Trade Labeling Organizations International.
Fair Trade Today
There are now twenty individual national Fair Trade associations; in the U.S., the association is called TransFair USA (the other associations are in Japan, Canada, and seventeen European countries). Coffee (or other commodities) certified as Fair Trade must comply with a number of conditions economic, social, and environmental. For instance, Fair Trade emphasizes direct trade with farmer cooperatives or collectives, thus bypassing the formerly ubiquitous middlemen who were the farmers’ sole means of gaining access to international markets but often took the lion’s share of any profit gained from selling the coffee.
Fair Trade demands the free association of workers and farmers, with “structures for democratic decision-making.” Farmers are to be paid fair prices for their crops, and workers must be given decent living and working conditions. Farmers must have access to pre-financing, as well as “additional premiums for community and business development.” And both agricultural and farm management practices must be long-term sustainable, including restricted use of agrochemicals: genetically-modified organisms (GMOs) are not permitted on Fair Trade certified farms.
Not A Perfect Solution
This sounds wonderful, but not everyone is enamored of Fair Trade. For starters, the FLO will only certify cooperatives or collectives of farmers, not individual farmers, effectively penalizing those with independent farms who care deeply about the quality of their beans. Typically, certification of cooperatives or collectives allows the hundreds or even thousands of farmers that are part of these groups to share the certification cost, which will, Nicole Chettero, Public Relations Manager of TransFair USA, says, “more than likely pay for itself within the first year.”
But not everyone within a collective or cooperative will care equally about coffee bean quality. Ms. Chettero notes that there isn’t sufficient manpower within her organization to certify every individual farmer in each country right now, and adds that “any individual farmer who has the resources to spend on certification probably doesn’t need to be certified,” a statement I don’t necessarily accept. Fair Trade’s goal, according to Ms. Chettero, is to help the “most disadvantaged” farmers before anyone else gets assistance, those who live in isolated areas with limited access to markets and may have no idea what the price of coffee is in the wider world. This is admirable, but just because someone doesn’t have the “most disadvantaged” status conferred on them by an outside entity, it doesn’t mean they don’t need assistance, whether that’s with the price of their coffee, pre-financing for the next year’s crop, or technical help in transitioning to a more ecologically-friendly farming system. Some individual farmers have formed, or are trying to form, direct relationships with specialty coffee roasters or sellers in the U.S., and perhaps in other countries, as well. (Continued)