coffee with the power to influence

Is Fair Trade sustainable?

In Social Justice & Environment on July 25, 2009 at 8:59 am

Is a guaranteed premium price without a guaranteed premium cup sustainable?

In December 2006 The Economist argued that “guaranteed pricing could not only supplant the reflex to diversify crops, but encourage more producers to grow coffee; driving down the conventional price even further.”

Fair Trade guarantees that farmers are paid an economically sustainable price. The Fair Trade Labeling Organization (FLO) markets and creates demand for fair-trade products; consumers are made increasingly aware of living wage issues, and that certified products can improve the lives of workers. Fair Trade continues to grow – less than ten years ago all Fair Trade coffees came from Central America. Today, certified coffees are available from almost every coffee producing country.

The suspicion is that Fair Trade is designed to sell low quality coffee at higher prices. Fair Trade co-ops are composed of hundreds of farmers producing different qualities of coffee often blended together. Money flows back to the co-op and is allocated equally amongst its members. The argument then is there’s no motivation for individuals to improve farming techniques, experiment with other coffee varieties, or access new markets.

According to Coffee Review the average cupping score for Fair Trade coffees in 2004 was 87.3, whereas the average for non-Fair Trade certified coffees was 86.8; bringing into question claims that Fair Trade coffees are inferior to specialty non-Fair Trade. Furthermore, Fair Trade coffees seem to be improving. The average rating for Fair Trade coffees rose from 85.0 in 2001-2002 to 87.2 in 2003-2004; supporting the position that paying more money on a guaranteed basis will improve quality.

TransFair explains that Fair Trade has a floor price rather than a fixed price. While the floor price may be irrelevant when farmers are selling above it by virtue of quality, Fair Trade certification often ensures that these same small-scale specialty coffee farmer have direct market ties. Nevertheless, despite continued market access and a guaranteed price, farmers are still struggling. Many coffee professionals believe price increases based on quality is the solution

Non-certified coffees that earn fair trade or higher prices are what some call the next wave of sustainability. Cup of Excellence (CoE) and Intelligentsia’s Direct Trade programs aim to reward quality in the cup. With the primary goal of selling coffee at a profit, organizations that self-certify face a conflict of interest that’s hard to ignore. Third parties like FLO are invested in the integrity of their certification label, not profitability. This is not to say that models like CoE or Direct Trade do not operate with integrity.

Fair Trade fills the gap between the micro-lot coffee aficionado, and the grocery store Robusta buyer. Consumers rely on the seeming transparency of certifying bodies to help guide their purchasing choices; they’re off to a good start with any specialty coffee, including Fair Trade.

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