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Chelsea Green Blog

Making it Real: Why Fair Trade Matters

Dean Cycon, author of Javatrekker: Dispatches from the World of Fair Trade Coffee, asks us to take a second look at our business models, our connection to populations around the world, and yes—our coffee.
In the hyper-caffeinated world of coffee marketing, it is very difficult to tell the truth from a load of beans.Most marketing materials are prepared with the sole goal of increasing sales, rather than informing or educating consumers as to the real qualities of the product or of the lives of the people who provide it. One could easily be forgiven for believing that all coffee farmers are smiling Juan Valdez types, happily trotting down the mountain with their mules, on their way to deliver beans directly to the consumer. And why are they always immaculately dressed in white with a well-pruned mustache? While there certainly are happy, well-fed farmers in the coffee world, they are mostly the ones who own large farms, have high degrees of education, and access to credit. The overwhelming majority of coffee farmers are poor, have little opportunity for education, and scrape by on small plots of land no bigger than the front lawns of many suburban American homes (sans the frog pond). These farmers are at the low end of a commodity chain that prices their product in accordance with the speculative calculations of financial houses and investment firms on a frothy trading floor in New York—unrelated to the actual costs of production and any sense of a reasonable profit for the farmers. At the village level, most farmers let their beans go to local middlemen (called coyotes in Latin America) who pay pennies for what we end up paying a dozen dollars for at the store. There is an alternative for the small farmers of the world, a way to realize meaningful prices for their labors, a way to realize cherished dreams of education for their kids and sufficient food on the table. That’s what Fair Trade is all about, and it is the most tangible result to the work us Fair Traders do, and some of the most gratifying that I have seen during my Javatrekking. Fair Trade guarantees a minimum price of $1.51 per pound (for certified organic coffees, which is all we buy at Dean’s Beans) when the quirky world commodity price falls below that figure. During the early years of the new millennium, the world price fell as low as 35 cents, barely half of what it took farmers to produce the beans. When the market price rises above the floor, Fair Trade always adds a nickel, thus giving farmers an incentive to stay in the system when the market gets a little more real. Fair Trade also offers farmers pre-financing of coffee purchases. This means that when a farmer asks, a Fair Trade buyer is supposed to pay as much as 60 percent of the contract up front, instead of waiting months until the coffee ships from the coffeelands. Not all buyers provide pre-financing, regardless of the flowery language in many marketing brochures (yes, Fair Traders puff, too). But it is a growing aspect of Fair Trade business, and it provides farmers with essential money needed to harvest and process their new crop, or, frankly, to feed their families until the rest of the money comes in. When pre-financing isn’t available, farmers have to borrow from local banks or coyotes at rates anywhere from 10 to 30 percent per month. Farmers are also required by Fair Trade to organize themselves into democratic, transparent cooperatives. These structures offer the first opportunity for most farmers to have a say in their own governance. This has an especially significant impact for women, whose voice in management is not often heard in rural, Third World communities. About half of the coops that I deal with are run by women. And all of these women juggle motherhood, baking cookies and running complex farmer organizations with astonishing efficiency and heart. I have worked on the ground with coffee communities in a dozen countries since 1989 and can testify to the real impact Fair Trade has on the lives of the farmers and their families. In Nicaragua, the farmers of Prodecoop, four thousand strong in the mountains of Esteli, pooled their Fair Trade premiums for years. Four years ago, I walked with Prodecoop manager Merling through the abandoned processing plant that used to provide contract services at high fees to the coop. “One day we will own this place and put it to work for the community, not against it,” she said with steely-eyed determination. Later, Prodecoop bought the plant and the farmers went to work repairing it. Now they process all of their own coffee, keeping the added value for their members, and have provided about twenty more jobs in the community. While no coop member is driving a new Prius, there are a lot of newer pick-up trucks in Esteli, and there is more food on the table. Our Ethiopian coop, Oromia, has put the extra money toward schools and health clinics in several communities. I sat in one such school last November (and will return later this month) in Negele Gorbitu, in the Yirgacheffe region. The one-room school was jammed with more than a hundred students sitting three to a desk. The ages ranged from six to sixteen (“They are rated by what they know, not by age, and many of the older ones have never had a chance to go to school,” Tadesse, the coop manager, informed me). I was moved to tears by these kids. They so desperately wanted an education, but the government didn’t have the resources or wouldn’t prioritize rural education enough to give these kids teachers, books, pens, and a roof to keep the rains out. At the same time, outside the window another hundred kids played or just sat around. There wasn’t enough money to make schooling available to everybody—yet. The need for self help in healthcare was apparent, as well. Driving to the town we passed four men carrying a woman on a homemade stretcher. They were walking seven miles to the nearest health clinic, and when they got there they might find no medicine, no doctor, but maybe a trained “community health care worker.” Fair Trade premiums were also being used in Negele Gorbitu to build and staff a health clinic, but it wouldn’t be finished for several months. In Kenawat, a small Muslim village in northern Sumatra, Indonesia, Lucia shows me the new water system and electric lines built with Fair Trade funds. This area suffered hard during the years of conflict between the Indonesian army and GAM, the rebel group fighting for greater autonomy for the region. According to Lucia, the export manager of PPKGO, our farmers group, and Salim, the agronomist for the group, Fair Trade premiums kept many of these small villages intact during the conflict and recent pricing crises. As we speak, colorfully dressed women with head scarves pass by, collecting water from the common tap, smiling broadly and moving on. One woman tells me that the clean water allows them to wash their hands before prayer, fulfilling the obligations of their faith. In the mountains that drop toward the Amazon in central Peru, twenty-two women stand in line to apply for loans from the newly established women’s credit fund at Pangoa Cooperative in Satipo. The first woman uses the loan to pay for university fees of her son—the first coop member to attend the university in Lima. Another woman buys materials for an enclosure to raise and sell cuy, a giant hamster-like creature that is eaten with relish (literally) in these mountains. The loans are the first credit these women have ever received, and the loan papers are quickly filled with descriptions of the latrines, water supply lines, chickens, fencing, store shelving, and other projects these dynamos unleashed wish to pursue. Esperanza, the manager of Pangoa, looks on and smiles. “These women’s lives are being changed, Dean, right here and right now.” These are the real faces of Fair Trade in the coffeelands. But let me be real. Only twenty percent of the coffee from Fair Trade-certified cooperatives gets sold as Fair Trade. The rest gets sold under conventional pricing, which even at the current higher level does not give a farmer much to feed his family, and certainly doesn’t give the community enough to build a school, a well or a health clinic. This is not the farmer’s fault. It is the same coffee grown in the same manner. The problem is that most people in the coffee industry are not willing to recognize Tadesse, Salim, Esperanza, and the other farmers as true partners in our businesses—they are simply cheap wage slaves to whom we can give pennies while selling their coffee for inflated prices. It is not an economic issue—even at our higher-than-Fair-Trade-prices paid to farmers we make a very good living. It is not a quality issue—non-Fair Trade roasters are buying the same beans as we are from Oromia, PPKGO, and Pangoa, just not paying the price. Quality actually improves under Fair Trade because there is simply more money for technical training, new processing equipment (Oromia is currently installing eco-friendly washing stations from Colombia in several coops) and the farmers have an incentive to care for their crop better if it will bring higher returns. It is not an availability issue—eighty percent of the Oromia crop is out there waiting. It is first and foremost an ethical issue, plain and simple. So take a look deep into your coffee cup. Behind the aroma, the acidity, and the body lay the real lives of farmers and their families. The choices we make at the supermarket and the café have immediate and profound impacts on almost thirty million people around the globe, on their ability to drink clean water, to educate their kids, and to dream of better lives. Fair Trade works. Help make it happen. By Dean Cycon

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