Fair Trade: a life or death issue

World Vision Ethiopian BoyInternational trade is not something many of us think about on a daily basis but for many people, particularly in developing countries, it can literally be a life or death issue. The vagaries of commodity prices and the historical lows recorded, particularly for coffee in the early nineties, has had disastrous consequences for millions of small farmers. Completely reliant on middlemen to buy their beans, many were forced into crippling debt or lost their land and homes, as market prices dropped below the cost of producing the coffee.

There are several reasons why paying a ‘fair wage’ to the poor farmers is an important issue – the first is obviously an issue of ‘fairness’ – the farmers are typically poor, grow the beans on coffee trees on small plots of land and have very little market ‘power’. This means that it is usually everybody but them who gets fairly paid for the fruit of their labour – the roaster, the coffee shop owner, the barista, or even the co-operative to whom the farmer usually sells the coffee beans – they all typically make a bigger cut than the under resourced farmer [and their family] who grow and harvest the beans.

The other reason is one that we outlined in a serious article by well-known US-based writer Steven Krolak in our Spring 2004 issue called ‘Sticks and Stones’. In this feature we highlighted future problems for the supply of top quality ‘specialty’ coffee, if small coffee farmers are not able to get a ‘fair’ price for their produce. Most people now know the difference between arabica and robusta beans – robusta grows on plants which are sturdier and can survive at lower altitudes than arabica. Robusta however, is considered a harsh bean with higher caffeine levels, that is typically used in instant coffee, while it is arabica that is prized for its delicacy and sweetness in great espresso coffee [there are some exceptions to this - for instance many Italian blends have a high proportion of robusta, as they like the strong, powerful taste that it adds] – and it is the high quality of arabicas that are often sourced from the small farmer plots.

As Steven Krolak pointed out, if a farmer cannot make at least a subsistence living for himself and his family from growing specialty coffee, then the world’s long-run supplies of this delicate resource may be jeopardised. There have certainly been documented cases of farmers in poor countries uprooting their coffee trees to plant something else, because they are simply not able to make a living from coffee. The world prices for coffee have gone up a little from a couple of years ago, when coffee was selling at historic lows, but even now, it’s important that the money goes to the right person, not just the big companies and the ‘middlemen’ as has often been the case.

The Fairtrade Foundation was established in 1992 by CAFOD, Christian Aid, New Consumer, Oxfam, Traidcraft and the World Development Movement. These development agencies recognised that by enabling farmers to sell their products directly to them at a better price, they were able to trade their way out of poverty and improve the lives of all those in the community. Through the “One World” shops and catalogues, consumers could purchase a range of goods that had been fairly and ethically traded.

Much has developed since then and Fairtrade labelling has been brought into being. There are now 21 national initiatives from across Europe, Japan, North America, Mexico and Australia/New Zealand which market and promote Fairtrade in their respective countries. An umbrella body, the Fairtrade Labelling Organisations (FLO) International, was set up in April 1997 to co-ordinate their work and run the monitoring programmes more efficiently.

So, what does Fairtrade mean?

According to Oxfam, the term Fairtrade refers to an independently audited product certification and labelling system that ensures those who grow and produce coffee get a fair go. It does this by paying farmers and workers a fair price for their work, helping them gain skills and knowledge to develop their businesses in the global economy and by providing a certification and labelling system to ensure Fairtrade standards are met and that the benefits of Fairtrade get back to the farmer who produced the product.

Fairtrade also means farmers and communities are able, and obliged, to use improved environmental methods and establish democratic associations or co-operatives to start local community development projects from the proceeds of Fairtrade. They also gain access to low-cost credit and technical assistance and receive a social premium that supports community projects.

Often working hand in hand with Fairtrade is Rainforest Alliance. With respect to coffee in particular where some of the single origin coffees are shade-grown, meaning the bushes grow within the natural forest, farmers have been forced to deforest their land in order to grow alternative crops. Rainforest Alliance stands to collaborate with agencies, national bodies and local communities to “develop and implement standards that are socially and environmentally responsible, as well as economically viable”.

The bottom line however is that Fairtrade still has to compete in the free trade arena and so the products have to be marketable and ultimately saleable. With the rise of the boutique coffee scene in Australia, we should be seeing a steady rise in the availability of Fairtrade single origin coffee’s, and this not only feels good, but tastes good too.

We also spoke with Peter Weston, Senior Field officer for World Vision in Ethiopia. Peter Weston and Shenkolla Farmers

World Vision and Jasper Coffee, one of Australia’s leading Fairtrade coffee companies, have formed an alliance to bring into Australia a Fairtrade and Organic Certified coffee from the Yirgacheffe region of Ethiopia. This is a relatively unique project for World Vision. We spoke with Peter about his experiences working on this project at ground level.

Peter has been involved with long term community development projects for World Vision in Africa for the past 6 years and, for the last 4 years, has been directly involved with development projects in Ethiopia. One thing that struck Peter when he first started working in Ethiopia was that everywhere he went, the coffee was magnificent. “You can be in a remote little community, right off the beaten track, no matter where you are you are bound to find someone with a gleaming, beautifully maintained Italian espresso machine, and they can make you the most perfect macchiato”. It was working with one such community in the South of Ethiopia that Peter realised how much coffee was bound to the history, social rituals, identity and livelihoods of these people. “Until that point we had been avoiding engaging coffee because it had become so unprofitable and we were helping them to diversify into other income streams”. Peter had already seen many coffee farmers, unable to support their families, tear out their coffee plants and clear the forests to plant other crops. The despair at having to do this was clearly evident. Peter decided to find ways to support them in maintaining this traditional livelihood as well as continuing to work on the wider community issues of health, education and developing other sustainable enterprises.

Peter could see the injustices and exploitation of these farmers at the hands of middlemen. “Most of the farmers have not had an education past primary school level and are semi-literate at best – this is quite literally exploited as these farmers certainly haven’t had experience in money handling or negotiation and have little access to fundamental infrastructures, like transport, necessary to run a profitable business”.

So where do you start? “We worked with the 3 separate co-operatives of the area, bringing them together for the first time, to improve numeracy and literacy skills, money-handling and organisational processes. We also provided assistance with re-invigorating some of their processing machinery”. With the slump in the coffee market over the past years, there has been little margin to support a family so if machinery broke down, it was unable to be fixed. “Even before there were any tangible improvements in their lives, there was an extraordinary new sense of hope and vision – they could see a future for their families in coffee and were starting to talk with real optimism”. Peter then started the process of working toward and gaining Fairtrade Certification. “Only one of the three co-operatives has gained international Fairtrade Certification at this stage so the other two continue to be a work in progress as we bring up their internal capacity to reach Certification standards”, Peter says.

Back in Australia, World Vision teamed up with Jasper Coffee to import, roast and market the coffee. “Sales here are still relatively small compared with the production but nonetheless we are now seeing them find other coffee markets in other parts of the world”. Peter also initiated closer communications with the greater Yirgacheffe regional co-operative. Through this, they have been able to tap into other markets such as the US, some parts of Europe and Japan.

Even still, most of the beans are sold on the open market. But the higher premium gained from the small proportion bought directly from the co-operatives is spread across the community and has made significant improvement in the lives of all the families. “The specific work toward helping this community access fair trade prices has seen more food on the table, schools being re-built and the community being able to be in charge of their own development – there is no way in the world that the broad brush concept of free trade could make the differences I have seen in this particular community in Ethiopia”. Peter goes on to say, ” that is why Fairtrade is so necessary, there are so many who are completely un-resourced and suffer at the hand of middlemen who, within the free trade arena, can manipulate the system to their advantage”.

“In this job you do see some of the hardest things that humanity has to put up with and we in Australia really can’t comprehend what some of these people are capable of withstanding and how they continue to function under these conditions”. Peter goes on to say, “the thing here is that the coffee is great – it is not just a case of buying the coffee because it will make your conscious feel better, it is very much a premium coffee”.

And From The Café Owner’s Perspective

Patrick Sloane is a regular contributor to Crema magazine, and is the moderator of the Crema coffee forum.  He also runs Castro’s Kiosk at Melbourne University, which stocks exclusively FairTrade coffee organic coffee from the Okapa region in Papua New Guinea.  He is also a consultant to the hospitality industry.

For starters let me state that I’m hardly impartial when it comes to the Fairtrade coffee debate. The café I co-own sells Fairtrade coffee and I’m unashamedly biased when it comes to promoting the benefits of the stuff. But there seems to be a bit of confusion in the wider community as to the benefits of Fairtrade certification.
I’ve heard it said that Fairtrade certification provides little incentive for coffee farmers to improve quality, as they get paid the same price, regardless. Not necessarily so, says Cameron Neil, who works locally in Fairtrade Labeling, as he suggests that, Fairtrade provides market access, long term trading relationships, stable minimum prices, etc. That provides certainty for investment in quality enhancement.’
And as a café owner which sells Fairtrade coffee I would add that in a competitive market place, its not enough to sell an ecologically sustainable and ethical product, quality control needs to be a given to ensure repeat sales and return patronage.
I believe that the future of Fairtrade coffee lies in producing superb quality, single origin, high-altitude, shade-grown crops, which have been grown using organic and sustainable methods.  These value-added products offer a significant return on investment for the farmer, and they showcase the uniqueness of the terrain from which the coffee is derived – the terroir if you will. Certainly, Fairtrade coffee roasters are not the only ones to extol the virtues of single origin coffees.  They are, however, due to their close relationships with the growers (which is a stated aim of the Fairtrade movement) uniquely positioned to capitalise on this area of comparative advantage.
And I for one love trying new coffees from different regions, and examining the qualities that make them unique.
Another valuable contributor in the development of sustainable coffee agriculture is The Rainforest Alliance and Small Coffee Farmers Certification Program, which aims to conserve ecosystems by protecting healthy soils, rivers, and wildlife.  Maria Justina Liatas, the owner of a several small coffee farms in the mountainous region of northeast Peru, has found that through Rainforest Alliance certification, she has been able to introduce sustainable agriculture to her farming practice.  Initiatives such as separating her garbage, composting organic waste, and planting trees on her property, have not only helped minimize the impact upon the environment, but also improved the quality of her crops, which means a higher return for her harvest, and better wages for her workers. ‘We know that we used to damage the environment, but we didn’t understand the consequences,’ says Maria. ‘Now we are reforesting with native species and protecting the forests we have.’
Both Fairtrade and Rainforest Alliance certification offer an ethical alternative to the deregulation of the global coffee economy, which has been responsible for flooding the marketplace with lesser quality products from countries such as Vietnam, which a couple of years ago, resulted in the price of coffee plummeting to an all-time low.
Many coffee farmers earn less now in real terms than what they were earning 30 years ago, as the price they get for their crops fails to cover production costs. 

Note that not everyone agrees with the Fairtrade label – many roasters complain that it’s taken on a life greater than itself, and simply become another marketing ‘brand’ You can follow conversations about issues like this on our chat room [see: the Forum on www.cremamagazine.com.au >> Trade page]. However, whether or not you accept the roaster arguments, in the eyes of many, it is in highlighting the issues of the poor farmers in the first place, that organisations like Oxfam have done a particularly important job.



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