We have been asked for our opinion on Fairtrade coffee quite a bit recently and because it is a very complicated area I’m writing up a quick introduction to the subject with some recommendations for further reading should you be so inclined.
The Fairtrade organisations (yes there are more than one) work by guaranteeing a minimum price for bulk commodities such as coffee, cocoa, tea, and bananas which include a premium paid to the producer to be used for improving their businesses. This is paid for by certification fees and royalties collected from the retailers who then in turn increase their prices to the final buyer.
We obviously don’t buy cocoa or bananas so from now on I’ll refer only to the coffee markets.
Fairtrade coffee is a market commodity (and in fact the second most traded item after crude oil) so prices are negiotiated this year for next years crop. This is of absolutely no use to speciality coffee roasters like us who need to taste the beans before we buy them.
Our coffee comes from the top 3-5% of world production and we can’t tell a year in advance who will have a good harvest and produce the best coffee. Here’s the important bit, we pay the market price for the best beans (in a highly competitive spot market) after they have been grown which is inevitably much higher than the Fairtrade guaranteed price.
If you are a coffee farmer you will almost certainly have a range of quality in your harvest, some fields will be better than others and the natural range of a crop means that after sorting and processing there will be some better and some worse sacks of coffee. The best stuff you will easily get a good price for provided you have access to the market and aren’t ripped off by middlemen who control the transportation (some central American countries suffer here) but the poor quality stuff will be sent to Fairtrade as they guarantee a minimum price.
This is a double edged sword, yes you sold it and got something but this system does not encourage you to improve your methods and sell more of the crop at a better price, locking the farmer into low standards and low rewards.
Add to this reports spanning many years that as little as 5% of the Fairtrade price actually makes it back to farmers and it is worth considering that the Fairtrade badge is not a guarantee of sustainability.
We buy coffee from a coop in Guatemala who have said that once the costs associated with joining the Fairtrade scheme have been paid there’s nothing left to put back into the business, which is why they are working hard to produce more speciality coffee to sell to people like us at three times the Fairtrade price.
The system that we (and many other speciality roasters) are moving more towards is direct trade. Very simply we buy as much as possible of our coffee direct from coffee farmers, this way we know exactly how much they get and they have direct access to an end user who is focussed on extremely high quality and will pay premium rates for it.
This is of course not easy, the farmers and the roasters need to get in touch in the first place, across language barriers normally, the setup involves travel and shipping costs but once in place these relationships tend to thrive. The increased connectivity afforded by email and the internet has made possible what would have been very tricky even twenty years ago.
So no, we are not Fairtrade registered, some of our coffee comes from certified farms but since we are not we can’t sell it as such. We chose this way forward because we don’t think the costs are justified and are dubious about how much of the money would find its way to coffee farmers.
Instead we are cultivating (no pun intended) relationships with coffee farmers from Thailand to Brazil and slowly moving our supplies to direct trade, it is hard work and slow but very much worth it in the end.
If this article has created more questions than it has answered then I have achieved my aim. For further reading I would suggest looking into the rainforest alliance certification, organic options, and of course doing your own research into the Fairtrade organisations. We have not made our minds up definitively on this subject and as part of my research for this article I have been looking over the latest accounts for Fairtrade UK which had some encouraging aspects.