It’s Fair Trade? Great! But… uhh, what does that mean?

This article is posted by Foodie Abroad. Check out her other articles on Decaf and the Ethics of the Bean.

When it comes to buying coffee, the options seem endless. So how do you choose?  Many opt for price and/or efficiency (read: instant … gasp). Others will seek out a specific bean type. Many will choose beans from a specific roaster and others still will just pick the bag that pleases them, for what ever reason, be it aesthetics or witty brew names.

I must admit that I select my coffee based on roast, but if a pretty bag catches my eye or intrigues me with its naming, I’m likely to switch teams. One thing I always try to look for when buying my coffee is that it is third-party certified fair trade. I am not necessarily convinced that fair trade is the solution to the myriad labour, environment and distribution problems that plague coffee farming, but in the short term it seems like a step in the right direction.

Many readers of this blog may be concerned about finding a good, strong, quality cup of coffee, and perhaps are not interested in issues related to fair trade. But hear me out, because there is a very good argument to be made about a correlation between quality and fair trade. If your producers are living healthier and more profitable lives thanks to higher wages, they will be able to produce better coffee. I mean, when I am paid a living wage, the quality of my work improves, and the same logic applies to coffee production.

So what is fair trade?

Simply stated fair-trade coffee bypasses the coffee trader thereby giving the producer (and buyer) higher profits. At each point along the supply chain, the price of beans increases. In a non-fair trade economy, the price paid for the raw beans is much less than the price the coffee is eventually sold for. Even when you take into account value added (roasting, packaging, distributing), coffee farmers do not earn a fair percentage of value of the final product.

Fair trade (which extends to tea, sugar, bananas, cotton, flowers, wine and cocoa, to name a few) began as a market-based social movement that sought to provide an equitable wage to farmers, craftspeople and workers. Beyond fair wages, as a social movement, fair trade seeks to empower marginalised producers and workers by ensuring that they have a greater stake in their production (some sort of ownership, often based on a cooperative model).

This is by no means a new venture. In the 1940s, faith-based groups worked to popularize fairly traded goods, but in recent years, awareness and willingness to purchase fair trade products has truly increased. The Fairtrade Labelling Organization estimated in their 2007 Annual Report that the annual sale of certified fair trade goods has reached $3.62 billion worldwide. That said, they also contend that Fair Trade farmers sell only one fifth of their coffee at fair trade prices ($1.26 is the minimum price per pound). The remaining coffee is sold at dominant market price as demand remains low.

To be clear, fair-trade certified coffee does not necessarily mean that extra money makes it way back to the coffee farmers. Also, many companies are jumping on the fair-trade bandwagon and creating their own fair-trade label and standards. This means that they are essentially acting as judge and jury, instilling little confidence in a meaningful and progressive buying policy.

A third-party certifying body is independent and will perform an audit to ensure that the beans in question meet the set standards. FairtradeUSA, an independent third-party certification organisation, requires the following before they will put their logo on a bag of coffee:

  • That coffee importers purchase from the small farmers included in the International Fair Trade Coffee Register.
  • That fair trade coffee growers are guaranteed a minimum “fair trade price” of $1.26/pound FOB for their coffee.
  • If world coffee price rises above this floor price, fair trade coffee farmers will be paid a small ($0.05/pound) premium above market price.
  • That coffee importers provide a certain amount of credit to farmers against future sales, helping farmers stay out of debt.
  • That coffee importers and roasters develop direct, long-term trade relationships with fair trade coffee distributors, bringing greater commercial stability to the market.

In a nut shell, those are the basics of fair-trade coffee.

Looking for a local certified roaster? Check out this list of TransFair USA Licensed Partners (click here).

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