Commie Coffee - is it a Fair Trade?
Monday, September 28, 2009 by Chris Lesinski 
Today, we're addressing "fair trade" coffee. Believe it or not, there's a workaround in how you buy your coffee that keeps it truly "fair."
The common misconception is that "fair trade certified" coffee is the best bean to go with from a social perspective. People trash Starbucks for poor Fair Trade support – but buy your coffee just about anywhere that has a billboard and you’ll be a part of similar corporate shenanigans.
First, here’s a little introduction. Before coffee gets into your cup, it’s grown, picked, processed, shipped, roasted and ground, in that order. Usually, a corporation stands in front of everything and just gives you the roasted, pre-ground (or even flavored) beans. And since they’re standing there, blocking the rest of the process, there’s no transparency. You get bags of beans that don’t denote roast levels or region specifics. You need something like “fair trade certification,” or you’d never know what’s going on. The certification guarantees that farmers (way back in the very first step of the process) were paid at least a “fair” price for the coffee – enough to live on. There's essentially a minimum amount of money that the farmers are guaranteed to have been paid.
But, this is coffee made for the dough. Think about the economics. What happens when you put a price-floor on a commodity? The result is the same reason we refute communism and socialism here in America. Quality goes down. The market gets flooded with supply as farmers (even shoddy ones) gobble up the nice "fair trade" prices. It pushes the price down for those who aren’t involved in the program. Next thing you know there’s coffee farms in Canada selling over-priced garbage to Frenchmen. If that's the system you'd like to invest in, keep going to the grocery store for your coffee.
Here's the workaround: Coffee can be fairly traded without being “fair trade.” That’s what you’ll be getting if you go to a premium place for your coffee or order the green beans and roast it yourself. Boutique roasters have a totally different process than the corporate coffee producers. Small shops roast and grind right there in the store. The owners – and even some of the baristas – have met the farmers that grow their beans. The storeowners and importers make frequent trips to tropics. In a relationship like this, the importers and the farmers will sit down and try the coffee together since they’re both vying to make the best cup together. They’re invested in those third-world communities, and in return, the families and communities strive for the best coffee. It’s a symbiotic relationship.
Coffee is a serious business in developing countries. These farmers take pride in their crop. It’s land, crop and technique passed down for generations. If their coffee isn’t quite up to par, then they don’t want the charity of fair trade organizations. They want to fix it. And any legitimate coffee-buying entity is willing to invest in a bunch of bicycles for transporting beans quicker, or a different processing method – as long as it means better taste in the cup, a mutual goal. When you buy coffee from a local roaster or importer, you’re getting two things: quality and fairness. They go hand in hand. No certification required.
What are your thoughts on fair trade coffee? Leave a comment.
[image via FarmerGary]
Reader Comments (5)
What you describe in your penultimate paragraph describes what Intelligentsia Coffee does with their Direct Trade Coffees. Counter Culture Coffee has a similar program. With Intelligentsia, they have a direct relationship with the farmers and guarantee to by 25% more than would "Fair Trade Certified" coffees. Of course, the beans have to make the grade.
As it's worked so far, everyone wins. The farmer gets paid a better wage and the people of Intelligentsia help them learn new and better ways to grow their crops. For the consumer, Intelligentsia gets better quality coffee to roast and serve their customers. The people in the third wave of coffee are willing to pay more both for quality in the cup and the quality of life in coffee producing nations.
Intelligentsia's have been popping up around LA and I've become a devout supporter. It's little skin off my back to pay $4/pound of coffee, get awesome beans and support direct trade.
I'm a convert.
Theoretically, roasting yourself has zero impact on the "fairness". Green beans can be just as "unfairly traded" as the beans sold retail in a pre-roasted form. You still have to know your sources.
But you're spot on about the quality issue. Fair Trade, as the named certification system works, is an economic program. It's not a quality program (farmers aren't guaranteed a reward for better quality crops). Nor is it an environmental program, despite all the confused people who ignorantly slap the "green" label on Fair Trade.
Hey, Economics graduate here.
There is actually two issues with setting a price floor for a good produced in a low income/high unemployment area. There is of course the obvious issues with the market becoming flooded with a low quality product, but there is also a second issue. There is now unlimited supply to limited demand.
So far we have managed to out-consume this issue, but if coffee consumption levelled out we would see much more intensive labour market competition. This would have two effects: Firstly, quality of goods would come up. Secondly, and this happened with wood products previously, organised crime and cartels increase, as groups get together to effectively block out other farmers. (In PNG with the wood example, this was done by cutting off fingers).
I'm glad you are putting up some of the faults with this incredibly silly system. People aren't machines, so they will never be immune from the desire/greed/wants whatever you want to call human nature that drives markets.
Just want to say what a great blog you got here!I’ve been around for quite a lot of time, but finally decided to show my appreciation of your work!Thumbs up, and keep it going!
Cheers .