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So what exactly is "Fair Trade"? And fair to whom? Fair Trade is not Free Trade. They have nothing to do with each other. Fair Trade is not welfare. Fair trade tries to ensure people get fair pay for their work. There are a great many detailed definitions for "fair Trade," and a wide range of organizations working on the problem. It's confusing, but that's not all bad. In fact it's very reassuring that so many individuals, businesses, non-profit organizations and government agencies are taking up such a worthwhile challenge. I'd be honored to be a little help to any of them. The problem of unfair trade is huge and ever-present. Oil, the #1 traded commodity worldwide, is produced by a small workforce of specialists. Coffee, the #2 commodity, is still 75% produced by hand labor. It has an immense human footprint world wide. And since we the people of the US are the worlds most sought-after consumers, our daily actions can make things better or worse. Unfair trade can't happen unless we pay for it. But don't feel too good about that distinction. Someday you and I may be the ones in need of a little fairness. "The Marketplace" by itself has never and will never solve the problem of excessive greed or misused economic power. The efficiency provided by open markets is not at all the same as fairness. We have plenty of economists and computers. We humans, greedy or not, are supposedly the smart ones on this planet. So we should at least be able to add up the long-term benefits of fairness and figure out how to be economically fair and sustainable. Let's take a few steps toward specific, defined limits on human exploitation. But whose action plan is right or wrong, who is trustworthy, who is not? I'd be glad to discuss specific organizations and businesses off-line. But I won't try to analyze marketplace honesty here, though honesty is always a major concern. There's plenty of information about fair trade organizations on their websites, and plenty of opinions about them on other websites. You'll find some suggested links at the bottom of this page. Or just use your web search tool (I like dogpile.com) and search for "fair trade" or some other key words. So instead of duplicating opinions, let me try and look at the problem in a way you might not expect. In studying the puzzle of fair trade, I think I found a missing piece. Let me challenge you to take a look at the big picture. Not just the big picture of 25 million exploited coffee farmers, pickers and processors, though they are in great need of fairness. In the upside-down logic of money and power, they have the smallest voice in the crowd of people who make a living from coffee beans. Bigger... I'm looking for an even bigger picture than the one that includes the problems of running a coffee business in the US and the quest for superior quality beans, Cups of Excellence and great cupping scores. I want to see a picture that includes all that and also the consumer, me, you, and a missing piece of the market place that may be the biggest problem blocking the growth of fair trade right now. We the Consumers If we add up the amount of coffee consumed in the US and all the coffee that is processed in the US for re-export, the US buys more coffee beans than any other country in the world. We are the most important coffee consumer in the world. But our buying habits aren't much different from anybody else's. Most people just want a simple cup of coffee, purchased off a store shelf and brewed at home, or maybe purchased already brewed from a corner store or a nationwide chain as nothing special,... just coffee. No problem there. Drink up and enjoy! I certainly do. That's 80% of the coffee bean market: average quality coffee, most of it from respectable arabica trees, processed in huge quantities and priced cheap. In the US, most non-specialty store-shelf coffee now (2009) sells for from $6/lb down to $3/lb. Very affordable for most households. It is what has made coffee the second biggest trading commodity in the world. Coffee has always been a lot of enjoyment for a little bit of money. For the consumer, that's very fair. But is it also fair for the coffee pickers? We don't know. Maybe sometimes? It depends... In contrast to average ordinary coffee, some coffee is considered "specialty" grade. Unfortunately, that's a term with a wider range of definitions than "fair trade". Specialty is supposed to mean that a shipment of green beans (unroasted coffee) has no more than a certain number of defects in a 300 gram sample; and also that the roasted and brewed coffee has scored 80 or more (on a scale of 50 to 100 points) in a properly conducted taste test as defined by the Specialty Coffee Association of America (SCAA). But as you might suspect, in the professional coffee world there is a very large "trust me" factor in the advertised flavor qualities of coffee. From the average consumer's viewpoint, specialty coffee usually has a fancier package, a fancier name and costs at least $7.50/lb. It's also supposed to taste better. You'll have to be your own judge there. I've noticed that many specialty coffees really do taste better than the low-priced, pre-ground coffee-in-a-can. But some, well,... don't. Is specialty coffee fair to both the grower and the consumer? Again, the answer has to be: "That depends." From the viewpoint of most grower's, having some part of a year's crop sold on the specialty market for $2.50/lb is a dream. Winning any place in a Cup of Excellence event is about the same probability as winning with a lottery ticket. Most growers and pickers just want to get most of their beans to market without having them stolen or ruined. And sell them to anybody for enough money to survive the long hungry months between crops, balancing money between food, school and medicine, with no other options for income. Did you notice the conflict in the above account? Add a third point of view from the many roasters, cafe owners and baristas in the specialty coffee market, each hoping to be the next big winner in a growing market sector, and a fourth viewpoint from specialty coffee customers willing to pay extra for flavor and/or glitz. This is not meant to be a slam at the specialty coffee industry or exceptional quality coffee. But the goals of the specialty coffee industry frequently diverge from the best interests of either most coffee workers or of most coffee consumers. In fact, fair trade coffee is not at all related to specialty coffee. The specialty coffee industry has provided Fair Trade with a good start. But the combination is awkward. Specialty coffee is based on excellent flavor, fair trade is based on fair wages. Everyone deserves fair wages but it is impossible for all growers to produce specialty- grade beans. The Missing Piece of the Big Picture Most coffee growing in farms around the world is good but average coffee, fairly traded coffee included. Average coffee is what you get most of the time, no matter how much money and effort you invest in your plants and dirt. Fairly traded coffee is just coffee that brings a fair price to the growers. In principle, it has nothing to do with specialty coffee and scoring 80+ on a cupping test. As with all coffee, some fairly traded coffee may be specialty grade but not all or even most. It's just average coffee. However, all fairly traded coffee is only being sold in the specialty coffee market (conscience coffee?) for $7.50 or more. There is currently no US roaster offering Fair Trade coffee at consumer prices. The current import price for average, ordinary arabica coffee (Dec 2009 ICE C-market price) is about $1.47. At the same time Transfair America requires $1.26 minimum for its certified Fair Trade coffee (or 10 cents above C-market, $1.57, whichever is greater). Not much difference. Other community support and relief organizations that include fair trade concerns have no specified cost, but they are usually similar. Fairly traded coffee prices are primarily designed to protect the farmer's income in down market times, when he might otherwise be forced to absorb all the drop in prices forced on him by the rest of the industry. In good market times, fairly traded coffee prices are designed to stay just a tiny bit higher than average. Whether the beans were sold at a fair price or not, the coffee and the roasting cost consumers about the same. Yet there is no open door for fairly traded coffee to enter the massive consumer market. Instead of being sold for $3-$5/lb, its price is unfairly inflated to $7.50 or much more, even by some organizations dedicated to the cause. Certainly some percentage of fairly traded coffee is excellent quality, great tasting coffee that deserves high cupping scores and a high price in the specialty coffee market. But right now, for all fair trade coffee there is no option other than competing unfairly at an inflated price at the small, expensive end of the coffee market. In truth, I'm glad to say there are a couple sources that may be selling fairly traded coffee at a fair price. Namely, a small roaster in Pennsylvania, Fonseca; as well as the national chain Costco. These sources may or may not use specialty grade beans, but their price is only about $5.00/lb. If there are more consumer-priced sources, I would very much like to know about them. While I give credit to these sources for fair pricing (if they are being honest about their coffee), in terms of the national coffee market, they represent only a very tiny crack in a very big door. More US roasters are needed who will purchase average quality fairly traded coffee and honestly price it for the consumer market. I'm concerned that if the non-specialty consumer market doesn't open up, the next time there is a world-wide drop in coffee prices as there was in 2000-2002, many more growers and pickers will loose their farms, starve, and be left as wage slaves for bigger financial interests. My Action Plan 1. My action plan is to beg, shamelessly. I'm begging US roasters,... please roast and sell some of your weekly volume as consumer-priced, average quality, fairly traded coffee. You can make an acceptable profit with this as a part of your business model. And it will go a long way to protect your industry and the people who do the most physical work per pound of product and who also take the biggest personal physical and financial risks per consumer dollar. 2. I'm also begging dedicated fair trade organizations to do the same thing. Please start selling a portion of your fairly traded products as what they are: respectable, average quality coffee beans. And price them for the consumer market, not the specialty coffee market. It is likely that you have more price flexibility than typical small-medium size US roasters, and more to gain in opening up the huge consumer market. Lead the way! 3. And I'm begging US consumers to buy fairly traded coffee, if you can afford it. Very sincerely, Jim
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