Fairer trade?

Local coffee houses bypass Fair Trade, working directly with growers to get them more money

At Ritual Roasters, the coffee comes direct from the farm and is roasted in San Francisco


Many people will pay more for a cup of coffee if a significant amount of that money goes to the people who grew its beans, helping improve their lives and communities. That's the idea behind Fair Trade Certified coffee.

But Fair Trade may not be as lucrative for coffee farmers as people are led to believe, and uncertified San Francisco roasters such as Four Barrel, Ritual Roasters, and Blue Bottle appear to be making more significant impacts on the growers they buy from.

Fair Trade was once just a name for ethical commerce and an idea to fairly pay the farmers growing our food, but Fair Trade Certified* is now a trademarked term owned by Fair Trade USA*, based here in the Bay Area. To label their coffee with the Fair Trade certification, coffee farmers must buy into the system and abide by strict standards set by the cooperatives that oversee their production.

Although Fair Trade Certified coffee sells at significantly higher prices than generic coffee, the coffee producers often don't see the majority of the increased profits. That's because all the parties involved in the system take shares of that increased price.

"The buyer buys the coffee at a hiked price, assuming the price is trickled down to the farmer, but it isn't," says Masumi Patzel, a political scientist who made a recent research trip to the coffee farms of Guatemala. "The people who are benefiting from Fair Trade are the exporters."

The coffee producers only receive a fraction of the final cost of the coffee, says Patzel, and her research has shown it hasn't done much to improve conditions in coffee-growing communities.

"What are these farmers going do? How are they going to feed their families?" she asks.

Patzel says that in Guatemala, a country of mostly farmers and peasants, more than half of all personal income is spent on food (compared to about 20 percent in the U.S.), food prices have risen 80 percent in the last 10 years, and nearly half the population suffers from malnourishment.

Buying into the Fair Trade system and switching to the monitored system of growing coffee can be costly for the Guatemalan farmers who are struggling to get by. "They are just not making the cut," she says, noting that on the farms she visited, farmers only drank instant coffee because they couldn't afford the coffee they grew.

Yet Fair Trade USA spokesperson Stacy Geagan Wagner says Fair Trade has helped farmers. "Fair Trade is essentially an agreement between producers, industry and consumers," she says. "Fair Trade agrees to pay a fair price for the products."

At Fair Trade USA, which oversees the label, that "fair price" comes to at least $1.40 per pound of coffee beans, with an added 20-cent community development premium given to the farmers and a possible 30-cent organic incentive.

"Essentially the farmers always get higher then market price," Wagner says, "because they get the premium, the organic incentive and the minimum price."

However, the International Coffee Organization's most recent composite had the average worldwide coffee price at $2.15 per pound, higher than the Fair Trade price. To work with the ever fluctuating coffee market, Fair Trade Certified coffee farmers are either paid the minimum of $1.40, or the current market price, whichever is higher.

"The Fair Trade minimum covers the cost of sustainable production," says Wagner, "so they don't starve to death when the market crashes."

Some of San Francisco's most popular coffee roasters have chosen to buy their coffee directly from the farms that grow it, bypassing the Fair Trade system and paying the farmers significantly more while forming a strong relationship between producer and roaster. Without the middlemen, there is suddenly a smaller separation between the farmer growing the coffee and the consumer purchasing it.


@Oona. I'm disappointed that after our many discussions you continue to misrepresent the goals of Fair Trade certification. While I could spend time addressing the individual theories you present, I'll focus on a few key inaccuracies:

• Our mission is Sustainable Community Development: Fair Trade USA is a mission-driven nonprofit organization. We focus on sustainable community development. Price is part of that equation, but not the whole story. Certification verifies that a company's claims are true, that money is being invested in the communities for vital social services, that workers have safe conditions and that farmers are protecting the environment, among other benefits.

• Our Organization's Name is Fair Trade USA: Your article uses the wrong name for our organization. Our name is Fair Trade USA and there is no such thing as a TransFair USA label oversight division.

• No One Can Trademark Fair Trade: No one can trademark the term “Fair Trade” because it is legally classified as a fair use term. Therefore, Fair Trade USA does not have a trademark on the term Fair Trade, nor have we ever claimed to.

• Fair Trade and Direct Trade: To compare these models, you must understand that they have different goals. Fair Trade USA is a third-party certifier that sets and monitors standards that protect, and empower farmers and workers. Direct trade is focused on delivering the best quality coffee from a single farmer. Fair Trade is also a means for developing and delivering coffee quality, but our goal is to alleviate poverty and empower communities to help better their own lives through viable trade, not aid.

Readers, if you are looking for more accurate information on the impact and relevancy of Fair Trade please visit http://www.fairtradeusa.org. In just 12 years, Fair Trade USA and its partners have generated more than $220 million in additional income and benefits 1.2 million farmers and workers annually with better prices, community development funds, training, direct connections to US buyers and more.

Posted by Fair Trade USA (Stacy Geagan Wagner) on Aug. 19, 2011 @ 4:20 pm

You claim a lot for faair trade but: have you ever visited a central american community that is produucing fair trade? They do not get a cent of the price increase! They do not know of such price increase! Fair trade usa should go and make sure that the lives of these people are improved upon and not the money get lost somewhere in the way!

Posted by Guest Mike on Aug. 20, 2011 @ 6:45 am

Thank you for your post on Fair Trade. I would like to share important additional information about the Fair Trade movement and marketplace, regarding other fair trade labeling initiatives. Fair Trade USA is just one reputable fair trade labeling initiative in the marketplace that focuses on certifying single ingredients and products, instead of companies and brands dedicated to fair trade throughout their entire product line. While it is commendable for an otherwise non-fair trade company to offer one or few fair trade products, fair trade consumers prefer to support brands and companies that are dedicated to fair trade throughout their corporate DNA.

IMO’s Fair For Life Fairtrade certification (www.fairforlife.net) is a new fair trade labeling initiative in the marketplace that focuses on entire companies and all their major supply chains. Mission-driven fair trade companies such as Dr. Bronner’s, Equal Exchange, Theo Chocolate and Guayaki are all certified fair trade through IMO’s Fair For Life certification program. Many more dedicated fair trade companies are moving to the IMO FFL certification so they can distinguish themselves as fully dedicated brands rather than just offering a few fair trade products. IMO’s FFL certification requires a company-wide audit of all products and supply chains in order to earn the FFL seal on labels, which ensures over 95% of their products by sales volume have a majority of Fair Trade content,

The Agricultural Justice Project (AJP) (www.agriculturaljusticeproject.org) is another important new certification that focuses on domestic fair trade production. Currently the international fair trade system focuses on marginalized communities in underdeveloped countries, but American farmers and farmworkers also face similar issues of volatile pricing and unfair wages and working conditions. We need to bring fair trade criteria home, as its not enough to treat earthworms with respect via organic certification we have to think about impoverished farmworkers in the United States too.

Fair trade is growing rapidly and there is a fair amount of consumer confusion. The mission of the Fair World Project, www.fairworldproject.org, a fair trade consumer advocacy campaign of the Organic Consumer Association, is to educate consumers about fair trade and different certification systems to enable informed responsible purchases when shopping.

Ryan Zinn
Campaign Director
Fair World Project

Posted by ryan Zinn on Aug. 20, 2011 @ 8:08 am

Fair For Life reaps all the efforts of Fair Trade and does nothing to help the certification of producers. Fair for Life is a joke for any company that uses it.

Posted by Guest on Aug. 30, 2011 @ 2:21 pm

"Direct Trade" is a convenient label for the roasters in that is is not a certification, therefore the claims are not verified, and the consumer really has no way to know what the actual impact of it is or even what it actually means. What I mean by this is that direct trade can mean different things depending on how each company chooses to conduct their business, and the consumer has to take their word for it. Plus, the coffee business is complicated enough that the end consumer really has no way to make a comparison between the amount of money that has gone to the farmer in a direct trade transaction and the amount of money that has gone to the Cooperative in a Fair Trade transaction. Fair Trade certified coffee is different from direct trade in that FT is exclusively from farmers who are extremely small (and therefore usually poorer) than the farmers that have the capacity to sell directly to a roaster, because FT has focused on farmers that have plots smaller than 10 hectares. For farmers at that size, the Cooperative model of pooling resources for capital improvements and making micro-loans available when needed is ongoing as long as they are a cooperative member. The scale of what Fair Trade has accomplished over the last 10-15 years is huge, and it is the reason many roasters and consumers have become so curious about where their coffee came from; therefore I think that it is wrong to make statements about direct trade at the expense of Fair Trade. Certainly direct trade can be a very good thing, but I think it is important to remember that it is a very small percentage of the market, and so can only reach a tiny percentage of coffee farmers.

Posted by Guest on Aug. 24, 2011 @ 11:10 am

It's understandable that young companies would want to differentiate themselves from their predecessors, but doing so at the expense of the Fair Trade model is rather less laudable than you might be led to believe. While it's a noble thing to help one farmer by buying the small quantities that direct trade represents, it can't begin to compare with the worldwide effort that Fair Trade has made to address the complex problem of low income for millions of farmers. Though the problem is far from being solved, the Fair Trade model has no rival in raising the consciousness of the coffee industry to the issue and attempting to actually address it on a mass scale.
Robert Fulmer and Helen Nicholas
Royal Coffee Inc.

Posted by Guest Robert Fulmer Royal Coffee Inc. on Aug. 24, 2011 @ 2:18 pm

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