Fair trade coffee

Fair trade coffee refers to coffeebought and sold in the international commodities market that is traded with a specifically set, above-market price. In return, producers of the coffee are required to ensure a living wage for workers, follow basic guidelines for safe and healthy production operations, and abide by growing and crop processes consistent with making coffee a sustainable industry, working with agricultural economists to protect the environment as a way to guarantee a future for coffee production.

Coffee production is a key element in the economies of many developing nations, most notably countries in South America, Africa, and tropical islands along the Pacific Rim. Indeed, coffee is second only to oil as the major factor in the economies of developing countries. Coffee is the dominant export for these nations. According to the Food and Agriculture Organization of the United Nations, coffee is a $24 billion international market. Because Europe and North America, the most vital consumers in coffee, are largely unable to grow the crop domestically, the dynamics of trade are essential to the coffee industry.

Background

Coffee exportation has been a central (and controversial) element of developing economics since the sixteenth century when European merchants first created a buyer-friendly market through the exploration and colonization of Africa and South America. They abided by no international law, however. Because of the rapidly rising demand for coffee and tea in Europe and, later, the United States, large industrial mercantile corporations set up exploitive operations in coffee-growing nations—often in cooperation with corrupt local governments—that used indigenous or enslaved African labor to sustain exports. This practice went on for more than two centuries as the coffee industry expanded worldwide. Little concern was given to labor conditions on the coffee plantations, and little interest was paid to the enormous environmental damage this growing was doing to the soil.

Problems stemmed from the nature of the coffee plant itself: given the extremes of the tropical climates where coffee was grown, the industry was regularly shaken by cataclysmic shortages as crops failed or as weather destroyed entire annual yields. Coffee crops were susceptible to sudden frosts or long-term droughts. Because the demand increased over time, coffee sales went through fairly regular cycles of boom and bust. In some years, coffee prices dropped below profitability, and in others coffee supply dwindled to such a degree that importers (and in turn consumers) were expected to pay two or three times the ordinary cost.

In the 1960s, the already unstable market was affected by the international green movement, as environmentalists began to scrutinize the operations of coffee growers and their massive plantation systems. It was noted that coffee producers refused to abide by even minimum standards, such a crop rotation and nutrient irrigation, as a way to guarantee soil health and, in turn, a sustainable industry.

Beginning in the late 1960s, the United Nations, with the cooperation of the International Coffee Organization, established an agreement that set specific limits on how much coffee could be traded between countries as a way to help stabilize the prices and, in turn, help guarantee better working conditions in coffee-growing countries. Over the next decade, new agreements extended the range of what came to be called "fair trade" coffee. Negotiators saw that manipulating market prices could be an effective strategy for both improving conditions on the farms and implementing basic environmental protocols to help protect the future of the crop. In addition, when a bumper crop of coffee flooded the international market and, in turn, created economic havoc that drove prices down, as happened in 1988, these agreements helped protect the stability of the industry and to avoid extreme fluctuations in consumer pricing.

These agreements—worked out among coffee producers, coffee exporters, and their governments—sought to define quotas as a way to monitor market pricing, including paying small-scale producers a competitive price to not grow during boom cycles. During the 1990s and early 2000s, a wide range of international organizations were established to help provide a network of production and trade to create a stable international market for coffee and tea while also protecting both the working conditions of the farmers and workers who produce the crop and the viability of the land that is used.

Fair Trade Coffee Today

The agreements among consumer nations—worked out across several decades with the help of forwarding-look economic theorists, environmentalists, and transnational market analysts—to help develop reasonable market support for coffee growers—and in turn to guarantee the growers of those nations ways both to protect their industry and to help conserve the land itself—would seem a noble ambition. There is debate, however, about the effectiveness of these international agreements.

Fair market coffee certainly worked as a promotion. Fair market coffee became an advertising element for coffee brands and, particularly, specialty-coffee-shop chains in the United States and the United Kingdom as a way to promote their services to environmentally conscious customers. However, environmental crusaders and economic social activists began to point out that the goals of fair market coffee, while admirable, were not uniformly carried out by producers in various countries. A primary concern is that the high price that consumers pay for fair trade coffee has not translated into better working conditions for employees of the coffee plantations. Organizations such as the Committee on Sustainability Assessment have attempted to apply some kind of scientific metrics to test both the social and environmental impacts on the producer nations. However, evidence suggests that conditions on these farms have not significantly improved over the three-decade-long experiment in fair trade coffee; in nations such as Indonesia, Colombia, Vietnam, and Brazil, workers continue to work in unhealthy conditions and to live in poverty.

Bibliography

Blackman, Alan, and Jorge Rivera. The Evidence Base for Environmental and Socioeconomic Impacts of ‘Sustainable’ Certification. Resources for the Future, Mar. 2010. PDF file.

FAO Statistical Pocketbook: Coffee 2015. Food and Agriculture Organization of the United Nations, 2015. PDF file.

Fridell, Gavin. Fair Trade Coffee: The Prospects and Pitfalls of Market-Driven Social Justice. Toronto: U of Toronto P, 2007. Print.

Haight, Colleen. "The Problem with Fair Trade Coffee." Stanford Social Innovation Review. Stanford U, Summer 2011. Web. 16 Aug. 2016.

Hallam, David. "Falling Commodity Prices and Industry Responses: Some Lessons from the International Coffee Crisis." FAO Corporate Document Repository. Food and Agriculture Organization of the United Nations, 2003. Web. 16 Aug. 2016.

"History." ICO.org. International Coffee Organization, 2016. Web. 16 Aug. 2016.

Jaffee, Daniel. Brewing Justice: Fair Trade Coffee, Sustainability, and Survival. Upd. ed. Berkeley: U of California P, 2014. Print.

"World Fairtrade Challenge: More Than 1.8 Million Join the Coffee Break." Fairtrade.net. Fairtrade Labelling Organizations International, 16 May 2016. Web. 16 Aug. 2016.