Fairtrade movement looks to improve coffee market

You wheel your shopping cart down the coffee aisle and a million different products tower over you on never-ending canyon walls. You stop in front of the colored shiny bags with choices including organic, conventional, fine roasted, Colombian and also what is called “Fairtrade.”

Fairtrade represents what many people consider to be a good cause, but is also a little more expensive. You imagine poor Juan Valdez struggling to put food on the table and being abused by intermediaries. It is only a little more money, but for that farmer it could be the way out of poverty.

Without further debate, you drop the bag into your cart and go on your way feeling good that you’re making a difference. Many coffee drinkers have had a similar thought, yet few have taken the time to check what Fairtrade means and see whether it does what it says it does. Are the extra cents truly helping farmers?

Like many economic concepts, Fairtrade cannot be categorized as either total success or failure. It has improved farmers’ wages and provided money for needy communities, but it is unclear whether it can fully lift farmers out of poverty, and has failed to replace conventional trade.

Fairtrade consists of 445 coffee-producing cooperatives that represent more than 800,000 farmers from 30 countries; the top five producers are in Central and South America. These cooperatives are required to follow certain standards set forth by Fairtrade International, an organization consisting of three producer networks and 20 national organizations including Fairtrade America. These groups stress protecting the ecosystem and treating workers fairly. The blue and green Fairtrade logo assures consumers these standards are observed at all stages of production.

Safety net

One of the biggest benefits of Fairtrade is the minimum price guarantee that ensures farmers will always get paid at least $1.40 per pound. This guarantee serves as a market floor.

According to Fairtrade International’s Kyle Freund, the minimum price is updated “on a regular basis.” Currently, the organization is “collecting data on costs of sustainable production” to determine if a new update is needed. The current price was set in 2011.

This price guarantee provides farmers with a fair wage even in times when coffee prices drop, as they often do. Jenna Larson, spokeswoman for Fairtrade USA, describes it as a “safety net” that is crucial “in one of the most volatile commodity markets.”

Farmers are highly susceptible to changes in coffee prices since they are often unable to easily shift to other commodities when prices fall.

One study by GlobalFood Discussion in 2013 found that Fairtrade certifications increased household living standards by 30 percent for farmers in Uganda. Yet the minimum price guarantee often doesn’t reduce overall poverty, which is caused by more than one factor.

One study in 2004 by Christopher Bacon, who teaches at Santa Clara University in California, surveyed 228 coffee farmers in Nicaragua that sold either Fairtrade or conventional coffee. He found that 74 percent of all the farmers surveyed reported a decrease in their quality of life in the last few years, with only a small difference attributed to whether farmers sold in regular or Fairtrade markets. According to Bacon, this shows that higher income from Fairtrade “is not enough to offset” other conditions.

The only way for Fairtrade to influence the market is if farmers sell 100 percent of their beans that way, which does not happen now. As a 2014 Harvard study showed, the supply of Fairtrade coffee is much greater than the demand for it.

Comparing coffee

Ed Freedman is the owner and founder of Shearwater Organic Coffee Roasters, in Trumbull, that specializes in selling organic coffee.

Freedman said that his roastery has supported Fairtrade coffee since it started four years ago. He will continue to do so because Fairtrade “helps expand organic farms and fair wages,” he said.

He said he thinks organic coffee is high quality, and that Fairtrade helps organic coffee sales by encouraging practices that produce “better-grown coffee.”

But the positive effects don’t always translate to farmers. In 2014, the University of London released a four-year study that concluded that workers at Uganda and Ethiopia Fairtrade farms did not see higher wages. The study also found that Fairtrade farms did not have better working conditions.

The Fairtrade community responded by passing new labor standards like the right to collective bargaining, and a new focus on promoting living wages. Freund, of Fairtrade International, said these standards were part of an initiative to “ensure that Fairtrade benefits extend to all,” especially to migrant workers.

Before Fairtrade, farmers had to compete with larger industries that often had more access to the market and government benefits. This meant small producers often depended on intermediaries to get their products out, and were paid whatever prices the intermediaries wanted to give them.

Joseph Wein, founder of Cereza coffee roaster in New York City, spend a year living with coffee farmers in the Colombian mountains and said he was “shocked” that coffee is bought and sold so many times before reaching the consumers. Following this experience, Wein organized his roaster to provide these producers with the highest profit through Fairtrade and Direct Trade.

“I met some very talented, knowledgeable, and impressive coffee producers there,” said Wein who founded Cereza Coffee a year ago. “I was inspired by the passion, dedication, and time put into producing such beautifully executed coffee.”