[Austin]

I've been reading more about fare trade coffee and the impact on the local coffee producing communities. How do y'all feel about fair trade as opposed to non fair trade coffee?

[AlterCow]

I worked in the natural food biz for about 5 years directly with food vendors/distributors and I think it is good on many levels, but in the end the fair trade companies like Equal Exchange still make a killing off of the farmers. It's a big green business machine and that = $$$.

Some of the values they instill in the farmers are great: for example cooperative farming community and better growing practices (canopy grown). The farmers do make slightly more than one that sells to the likes of big corporate coffee companies/distributors. So it can be considered better.

I do have to say I love the product that such companies acquire. It aint Folgers!

That's my take.

[bosunbrew]

Sounds like an insurance plan to me? When the prices crash, farmers will still get a certain agreed-upon price for their work. The economics of coffee are really interesting to me (I'm not very knowledgeable, though). I also think that Fair Trade was very influential, back in the early 90s, as a way to get people thinking about the farmers that were getting screwed for putting a lot of work into creating quality produce. I mean, the major companies were simply buying up farms or driving down the price by accepting crappy coffee? Again, I'm not real knowledgeable on this, so these are just my barely-informed opinions. Very interesting, though.

[AlterCow]

You got some grasp on it. I am not all knowing, though, but here's some more insight...

In order ot have "quality" coffee a farmer needs to grow it under a canopy of trees and other vegetation. When a farmer does they are growing within an ecosystem that has a rich abundance of flora and fauna.

The lessor "quality" coffee is grown in an all sun environment. When this is done there is little to no ecosystem revolving around the farm and fertilizers and pesticides are introduced. While the harvest is considerabley greater the qualities of the beans are lessened by chemical nutrients and sprays to ward off insects. THe plants are stressed into high production and the plant stress also contributes to the quality of the produce. Farmers clear cut forested land to plant dense rows of plants. Without any natural decaying vegetation, or animals lending to the richness of the soil composition, chemicals become a necessity to make the plants churn out the beans. This also has been found to impact the migration of birds, which in turn lends to the growing medium the plants are in. A vicious cycle.

What a Fair Trade situation creates is a demand for canopy grown produce, where the farmer is compensated not only by the industry, but in many cases their governments, to create a quality canopy grown coffee. This not only ensures the beans are darn tastey, but the farmers can have a ustainable argiculture model that also contributes to the biodiversity of a region. This of course is not the end all to this arguement: having smaller businesses contributing to the argicultural model (distributors and local/regional vendors in industrialized nations alike) they get to form policy as to how the farmers have a voice within their industry and not have big biz calling all the shots.

As I continue to examine it seems like a big win for the small guy. Family farms across the globe can make it a very profitable venture as well as small and big biz. Corporate biz still gets a say within the industry, but there is leverage to make them play "fair". Still, corporate coffee has its grip on a considerable share of the market, but if you look at what some big biz does compared to others playing with the same buying power (compare say... Folgers brand (Proctor and Gamble) to Starbucks (Starbucks LLC)) there is a considerable difference in what is being pruchased, processed and sold to the public.

Interestingly enough, because of the demand for Fair Trade coffees, companies like P&G diversified their gameplan. Conventional coffee prices plummeted in the early 2000's forcing P7G to re-examine their role in the industry and start to buy fair trade coffees. Also, during this crisis it was found that family farms in places such as Nicaragua, Colombia and Mexico were literally having to decide on this legal enterprise or forced to starve/lose their farms, or resort to drug cultivation (cannabis and coca)! A study in 2001 found that although Folgers made about a billion dollars in profits that the fair trade industry lessened demand for their product and the undercut their farmers (going wholesale price was around $.50 a pound! Farmers were averaging around $300 a season. That means an average farm was producing only 600lbs of coffee).

So, fair trade has a big impact on the market. We pay more... but I think the majority of us would find that tolerable considering the impact it has not only on countries, but families and the environment as well.

[bosunbrew]

Very informative post. I'll pay more, knowing that the farmer is able to make a profit while making quality coffee. I know that forest lands in, say, Brazil and other countries, were pretty much decimated to create a plain for coffee to grow on... the shade-grown coffee offers a much better environment for coffee plants, and also better supports the entire ecosystem (birds live in the trees and help fertilize the ground, for example).
Coffee is such a complicated industry. Second-most traded commodity on the planet, behind oil, I believe. Imagine the voracious greed for oil, and try to put coffee in that same context. I'll support new initiatives to create a solid, profitable lifestyle for the farmers, even though I'm sure I'm only aware of a small portion of the issues at hand. With the cooperatives, auctions, organic-growing incentives, etc., the money issues are very tight.
And, will the typical consumer really want to pay more for a Fair Trade (or other labeled) coffee? If so, are they supporting the Fair Trade organization, or actually supporting the farmer and environment?
I try to stay educated, and I'm always willing to learn more, but some part of me will always be questioning where the money really goes. Fair Trade, or organic-certified coffee, for that matter, is never a negative for me, but it's not a deciding factor in whether I choose to purchase a particular bean. I certainly try to keep in open mind as I continue to learn about the various certifications, and their impacts.
Thanks again for the information!

[AlterCow]

Oh for sure, you're welcome. I like talking about these things. There are definately things that I still don't know about the industry.

You have good reason to question where the money goes. It is a big industry, as you have stated. Fair Trade or no, the companies make a sizeable profit. That is the nature of wholesale and retail... the price becomes bloated by the time it gets to the consumer. The companies that promote Fair Trade make it viable for themselves, which means in order to compete with the already established money in the industry it too has to mark it up considerabley. I don't have numbers, but the farmers in many cases (not all) are not making a killing, but they do have more say in their own farms and how they are legit in what they grow. The farmer is valued more not only for their product, but for their contribution to their environment.

In the end there is definately a few folks sitting on a pile of money while others toil for their riches. Catch 22?

[HoosierJoe]

I am always for the small businessman(person), being one myself. In the growing countries, they do not have open markets. The lions share goes to whomever pays off the right people.

So I support the fair trade.

[homeslice]

I suppose it's only fair trade as long as the farmers find it fair. Fair trade isn't relevant to us the consumer until we understand the business perspective from the growers.... I don't.

What does it take to make a "fair trade" to growers? Also, how do I, someone living by capitalism, determine what a fair wage is for growers in third world countries?
Just because they are getting more than what corporation's offer doesn't mean they're managing a "fair" life for themselves. For all I know they could be making poverty wages by their own country's standards.

[kau]

Like petrolum are there certain regions that produce the majority of raw coffee beans?

[Red River Roaster]

Here is a link on the coffee growing regions. While the oil region has the rich guys, the coffee growing belt has some of the poorest countries in the world. Check out this National Geographic link. Coffee @ nationalgeographic.com