WHAT IS FAIR TRADE?Fair trade has become as trendy as a caramel macchiato. It’s the label both companies and consumers want to wear. But fair trade is a cause being fought on many fronts and the idea that laid its foundation is getting lost in the politics of the movement. This grass roots campaign turned marketing engine is more than a price or a label. It’s a system created to ensure that farmers are paid for their crop. Although a higher price is one aspect of the system helping to meet this goal, it is not the only thing that defines fair trade.
Coffee is the second-highest traded commodity in the world and fifty percent of it is grown on small family farms. In America alone 2.3 billion pounds of coffee is consumed each year and for every daily coffee drinker there is a worker that depends on the crop for his or her livelihood. But the majority of small family farmers are living in poverty. They don’t have the money or the means necessary to transport their crop from their mountain-growing communities to their local market. They must rely on local middlemen to buy their crop from them. Forced to sell at rock-bottom prices with no other means of income and no other option to exhaust, the small coffee farmer gets stuck in a cycle of dependency that becomes impossible to break. Fair trade gives farmers another way to sell their coffee and companies a better way to buy their coffee. It seeks to shorten the trade route from farmer to roaster by cutting out unnecessary channels. Instead of importers buying their coffee through brokers, exporters, and middlemen, they can purchase directly from small farm cooperatives. These democratic organizations are made up of small coffee farmers whose farms have been Fair Trade Certified. Their coffee is sold through these cooperatives and the money is funneled back through to them. So the farmer is guaranteed to make a profit and companies are guaranteed that the price they are paying is going back to the communities in which their coffee is grown.
OUR VISION FOR FAIR TRADE and SUSTAINABILITY
The idea behind fair trade coffee involves paying farmers a "fair" price for the coffee they hand pick and bring to market. The price we pay for fair trade coffee is most often above the market price for that coffee. The majority of the difference is what goes directly to the farmers which is anywhere between 10 to 18%. Unfortunately, this system is not without its limitations. Namely with coffee farmers. Farmers have to pay to have their crop fair trade certified and we have to pay to certify that the coffee is fair trade. That is money that does not make it to the coffee farmer.
Additionally, in times where the coffee market has prices that hover close to the fair trade guaranteed price of $1.23 / lb. Farmers that have crops set for fair trade offer their coffee on the open market to try to get a higher price. While we want to see the coffee farmer make as much money possible, this practice lowers the available fair trade coffee on the open market and artificially driving the price higher. The coffee grower does not see the additional money created by the supply/demand economics and thus defeats the purpose of premium based fair trade pricing.
To correct this problem, we are in the process of creating two new programs within our company, one simple and one much more involved. Our simple plan is to identify coffee growing regions our coffee comes from and setup an economic assistance program in those regions that support the farmer directly. While we are still working on the logistics, this program would take a percentage of our green coffee buying dollars and invest it back into these economically challenged areas. We hope to have program in place by early 2010. in the mean time we have committed our selves to helping the farmers by blendiing all of our coffees with Fair Trade/Organic coffees. This allows (though limited) us to immediately help those who need it most.
We have partnered with organizations like Grower's First (www.growersfirst.org) in the past. Our partnership will help in creating a buying COOP that works with individual growers in very rural areas of Mexico, Nicaragua, Honduras, and Ethiopia. That coop will be responsible for economic development via small loans, agricultural assistance with organic certification, processing assistance and ultimately assistance in selling the coffee of which we will be a buyer.
The unique factor driving this endeavor is equipping the coffee farmers with tools and skills that make their coffee more valuable on the commercial market. Additionally, we will be able to trace the coffee from the individual farm all the way through to the cup of coffee our customers enjoy, a huge selling point that is needed but not provided with almost all coffee today.
Eventually, as our company grows, we would like to move away from fair trade coffee completely and into a more hands on role like our partnership with Grower's First and the economic development programs. Until then, we continue to use only fair trade certified coffee as available on the market.