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