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How fair is fair trade coffee?

April 25, 2010

I was woken this morning at 5am by a lonely cat noisily attempting to explore a large paperbag full of heavy upholstery parephenalia, you know, the kind of bag that crinkles and then makes a very loud thud when it hits the floor.  It took a few hours and a large cup of coffee but I’m finally ready to move on from this rather unpleasant start to the day.  Chances are good that when you read this you’ve had your morning caffeine jolt too.  Apparently more than 50% of americans are regular coffee drinkers,with an average consumption of between three and four cups a day.  That’s a lot of coffee – 196 billion cups of it by my calculations, which some say makes coffee the second most traded commodity in the world, and which certainly gives coffee buyers a lot of purchasing power.

Lately I’ve been thinking a lot more about my daily coffee.   I recently read Confessions of an Eco-Sinner by Fred Pearce which is a very enlightening book that I highly recommend  – in each short chapter Pearce selects one object that he owns and attempts to track down how it got to him through the global trade network.  His chapter on coffee takes him to Kenya where he visits with a group of farmers who are part of a fair trade collective.  Their coffee is purchased for $1.46 per lb which is 16% more than the price of coffee on the open market.  In addition, the fair trade organization also provide the farmers with community investments in education, local infrastructure, etc.

But as Pearce notes, this additional compensation seems minimal when viewed by comparison with the tremendous amounts of money the coffee fetches from the consumer.  By his calculation the same coffee that fetches $1.46 for the farmers who grew it, is turned into $300 worth of lattes at a Starbucks stateside.  Pearce describes one  farmer’s 5-acre coffee farm where 1400 trees produce around 660 lbs of coffee in a year.  At the going rate for fair trade coffee that is around $1,000 for his years worth of toil.  My further calculations reveal that Starbucks will rake in the same $1,000 selling fancy coffee drinks made with just over three lbs of coffee.   It doesn’t really seem like such a fair trade at all.

In my dream world the race for ever cheaper caffeine would reverse as we all clamor to pay higher, fairer trade prices for our morning brew.  I hope a few of you will join me in this quest, if all the math, and the moralizing didn’t totally alienate the audience that I no doubt drew in here thanks to Noerah’s gorgeous coffee photographs!

–By Talia

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9 Comments leave one →
  1. April 25, 2010 1:52 pm

    I don’t drink coffee, can’t stand the taste of it hot. But I do drink a lot of TRea.

    and I love that pot and mug.}:P

    • April 25, 2010 3:43 pm

      Thanks: the pot and cups were a gift from my aunt, we bought them from the factory back home in South Africa. I don’t use them as much as I’d like: the cups are pretty tiny!
      We are hoping to get some tea posts up soon: our tea expert has promised something so we’ll see!!

  2. ivorypomegranate permalink
    April 25, 2010 5:13 pm

    I’m glad I clicked on that gorgeous picture and read this, you bring up some really thought-provoking points. If coffee is bought so cheaply from the source, how is it that Starbucks has convinced us that a latte is worth $3?

    • April 25, 2010 5:29 pm

      I’m so glad you were lured in by the photo! Somehow Starbucks managed to reshape the entire coffee culture without any of the profit going back to the farmers. Its so hard to trust where you shop as a consumer these days. There is so little transparency.

      • April 25, 2010 8:11 pm

        I am impressed that you have done some homework in this area. Although it is true that only a fraction of the money earned in North America and other 1st world countries goes directly to the farmers, there is another factor to consider. “Fair” wages are wages that will allow the recipient to eat and live for that day. Prior to Fair Trade, the coffee industry was predominantly built on the backs of women and children who had to work 3 days (est) to eat. Now, with Fair Trade projects, those same farmers are thriving in their communities.

        A working model of assisting people 3rd world countries involves a careful balance of sustainable work and fair return. Our dollar and theirs cannot be compared because of the differences in the standards of living. The apple cart would be upset if we were to apply the same measure of success as we have here. There have been examples of this in African countries, where one tribe is helped, quickly become healthy and wealthy, only to knock out the next tribe.

        That being said, I am grateful to see that you are so conscientious and willing to look at what will one day become the status quo. The system will never be perfect and we need to keep careful track. Thank you.

      • April 26, 2010 9:29 am

        Margot,
        thanks for your thoughtful and thought provoking response.
        You are of course right that it is not important to compare dollars but rather to look for a living wage.
        From what I understand fair trade used to give a much higher rate relative to open market, about 3times the price, but now it is only a small percentage higher. and that lower rate is not actually providing the living wage that those of us making the choice to be ‘ethical consumers’ are expecting from the fair trade label.
        Fred Pearce notes that the farmers he visited could not afford transportation to bring their beans to the cooperative, had leaking roofs and struggled to send their children to the schools they themselves had gone to. This does not seem like a reasonable living.
        For now the coffee I buy is from gimme! coffee and it is what they call ‘relationship coffee’ that is purchased at a premium above the fair trade rate.

  3. Nichole permalink
    April 25, 2010 8:25 pm

    You make a good point and I’m glad that you’re making people think about these things :). The thing is, Starbucks doesn’t JUST put coffee in those drinks. there’s milk, syrup,etc. So it would probably drive their business into the ground if they only charged for the actual coffee used, not to mention every business needs to make some kind of profit. so of course they charge more than farmers are paid for growing the coffee beans. I really wish Starbucks didn’t charge quite so much, because their prices are too expensive in my mind, but they are trying to profit.

    • April 26, 2010 9:32 am

      Nichole:
      Of course you are right that there are many other expenses for a business selling coffee, you mention several, and also there are wages, rents, etc. And I certainly don’t expect a company not to make a profit.
      My point is that many of us feel they charge a lot of money for their coffee. I also know that they market themselves as an ethical company, they talk about how well they treat their employees, etc, etc. Because of both these things I think it is reasonable to expect that the consumer could purchase from them without having to worry that the farmers on the other end of the transaction were being exploited.
      Also, though I talk about Starbucks, this discussion is much more general, and there are many outlets selling coffee that have the same problematic purchasing processes.

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