fair trade

Fair trade coffee is coffee which is purchased directly from the growers for a higher price than standard coffee. Fair Trade coffee is one of many Fair Trade certified products available around the world. The purpose of fair trade is to promote healthier working conditions and greater economic incentive for producers. Coffee farmers producing Fair Trade certified coffee are required to be part of a coop with other local growers. The coops determine how the premiums from Fair Trade coffee will be spent. Growers are guaranteed a minimum price for the coffee, and if market prices exceed the minimum, they receive a per pound premium. Fair Trade coffee has become increasingly popular over the last 10 years, and is now offered at most places coffee is sold.

Beginning of Fair Trade

Fair Trade certification began in the Netherlands in 1988 in response to dropping coffee prices in the world market. The supply of coffee was greater than the demand, and since no price quotas had been reimplemented by the International Coffee Act,the market was flooded. Fair Trade certification aimed to artificially raise coffee prices in order to ensure growers sufficient wages to turn a profit. The original name of the organization was "Max Havelaar", after a fictional Dutch character who opposed the exploitation of coffee farmers by Dutch colonialists in the East Indies. The organization created a label for products which met certain wage standards. Within ten years three other labeling organizations began: the Fair Trade Foundation, TransFair, and Rättvisemärkt. In 1997 these four organizations jointly created the Fair Trade Labeling Organization, which sets Fair Trade standards, and inspects and certifies growers.

Certification

The Fair Trade Certification label allows farmers and farm workers to escape poverty by providing them the skills and the means to compete in the global market of agriculture products. Although Fair Trade began in the late 1940's, certification and labeling was not enacted until 1988. This label assures consumers that strict social, environmental, and economic measures are taken when the production and trade of an agriculture product occurs. Fair Trade standards require that farmers receive fair wholesale prices for their crops. This ensures that farmers will receive approximately $1.26 per pound of raw coffee beans as opposed to the world market average of $.60. Farmers who are involved with Fair Trade receive minimum floor price and an additional premium for certified organic products. In addition to the price standards of Fair Trade labeling there are other principles that must be abided by.

Standards for Fair Trade Coffee Certification

Fair labor conditions: Those who work with Fair Trade farms are able to work with freedom of association, safe working conditions, and fair wages. Child labor is strictly prohibited.

Direct trade: With Fair Trade, importers purchase from Fair Trade producer groups as directly as possible, eliminating the middle man and letting the farmer compete in the global market.

Democratic and transparent organizations: Through proof of a democratic market, Fair Trade farmers and farm workers decide how to invest Fair Trade revenues.

Community development: Fair Trade farmers and workers invest Fair Trade premiums in social and business development projects like scholarship programs, healthcare services and quality improvement training.

ORGANIC

Organic coffee is coffee that has been grown according to organic farming techniques, usually without the use of artificial fertilizers, pesticides or herbicides. Many producers exclusively use the three main coffee certifications: shade grown, organic, and Fair Trade. They do this in an effort to create a more environmentally and socially responsible product as well as to market it to more affluent socially responsible consumers.

The term organic can also refer to farms, or products from them which incorporate socially responsible activities such as recycling, composting, soil health and environmental protections.

Organic Producers

The primary producers of organic coffee are Peru, Ethiopia, and Mexico. In order to be sold as organic coffee in the U.S. it must gain organic certification and meet the following requirements:

• Grown on land without synthetic pesticides or other prohibited substances for 3 years.
• A sufficient buffer exists between the organic coffee and the closest traditional crop.
• Sustainable crop rotation plan to prevent erosion, the depletion of soil nutrients, and control for pests.

The Effects of Organic Coffee on the Environment

Organic agriculture stimulates the environment's natural development of disease and pest control. Because much organic coffee is shade grown, large amounts of forest may be preserved. This preservation has many additional benefits: minimizing soil erosion, preserving habitat, especially for birds, further, the leaves from the trees and bird droppings naturally fertilize the soil. Birds also control pests by eating insects that eat the leaves of coffee plants.

The Organic Coffee Market

The initial amount of capital needed to grow an organic coffee crop is less than traditional because it does not require up front purchase of synthetic fertilizers or pesticides. It typically yields a smaller crop and thus the farms tend to make less money relative to the size of the farm. In 2006, 67,000 metric tons of organic coffee were sold in the world, while world coffee consumption, including both organic and non-organic coffee was estimated at approximately 6,900,000 metric tons in 2005.