Fair Trade Coffee: an Overview of the Issue

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Here's a breathtaking statistic: The $3 many Americans shell out every day for a latte at Starbucks is equivalent to the daily wage of a Central American coffee picker. Nonplussed? Here's another heart-stopper, specially designed for the non-gourmet coffee drinker: Those $3.95 cans of Maxwell House and Folgers you pick up at your local supermarket, well, the beans that fill them are bought for around a quarter and come from corporate farms that use environmentally poisonous pesticides and clear-cut forests to produce the highest possible yields.

This may just serve as more fodder for those already sufficiently demoralized by the practices of big business. But what is interesting about such stats is they are being used to create a new American political animal: the ethical consumer. True, the ethical consumer may pale in comparison to the do-gooders of old -- the abolitionist, the suffragist, the fighter for civil rights or no nukes -- since his primary act is figuring out how to ethically empty his wallet.

Yet considering multinational corporations like Microsoft have annual revenues higher than the GNP of most countries -- and deregulation in the U.S. is on the rise -- ethical consumerism may be the best political weapon Americans have got.

Enter Fair Trade Coffee Consider the example of fair trade coffee or "politically correct coffee," as Time magazine has dubbed it. Fair trade coffee sells for a minimum of $1.29 per pound -- which goes directly to coffee farmers, not to "coyotes," the middlemen who pay farmers usually no more than 35 cents a pound. It is grown on small farms, which tend to cultivate in the traditional way: under the rainforest canopy and without pesticides. And because fair trade coffee has doubled farmers' annual incomes, more than 500,000 people in 20 developing nations are now living above the poverty line.

Nothing wrong with that. Indeed, those who hear about the benefits of fair trade coffee tend to support it. The only problem is that a nationwide advertising campaign is needed to get the word out, and large coffee retailers -- the ideal candidates for such an effort -- will not do it, since buying coffee at fair trade prices would cut into their profits. "Oh, it's the same old story again," you might say. "Good ideas, impossible to implement." But what is different about the fair trade coffee campaign is that, thanks to a coalition of nonprofits, good ideas are being implemented using ethical consumerism as a bargaining chip.

Dutch Innovation The story of fair trade coffee begins in 1988, in Holland, motherland of the international human rights movement. A group of fair traders selling coffee and other products at a crafts market decide to create a fair trade seal -- a label that will let customers know the product was bought at a decent price. They call the seal Max Havelaar after a best-selling 1860 book about the exploitation of Javanese coffee workers by Dutch merchants. In doing so, the traders remind their countrymen that coffee is a commodity tied to the history of colonialism.

In the same year, the Fairtrade Labeling Organization (FLO) is founded, an umbrella institution for European certification organizations like Max Havelaar, which have begun to help coffee farmers create fair trade cooperatives and connect them to retailers in the North. During the next decade, FLO's members draw a whopping half million farmers. The reason? Coffee farmers receive a tripled per pound price and FLO's arrangement eliminates their dependence on middlemen.

The farmers' end of the bargain is also relatively simple. In exchange for letting TransFair England, for example, inspect their farms and collect 10 cents per pound on coffee sold, coffee farmers get the right to use the fair trade logo. By 2000, FLO's efforts are a success. Fair trade coffee cooperatives have spread from Guatemala to Indonesia, and the TransFair certification seal is found in 16 European countries as well as...
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