Is Fair Trade Coffee Fair?

I recently balked at the price of fair trade coffee at my local roasters. I have been buying fair trade coffee for several years and I build the extreme price into my grocery budget. To save money, I brew all my own coffee at home and work, and rarely buy take-out coffee. I also stopped making full pots and I use a press or espresso maker to brew it by the cup, to avoid waste.

This week’s price was $27.80 CDN for 1 kilo of fair trade dark roast beans – that’s $12.64/lb. A kilo bag lasts about 3 weeks, so the weekly cost is $9.27 and daily cost (7 days/week) is $1.32. This is less than even one cup of take-out Tim’s coffee per day. However, I could easily buy a kilo of ground Maxwell House coffee on sale at Wal-Mart for only $6.34/kilo or $2.88/lb! My daily coffee cost would only be $0.30!

So why pay more? It’s not just the taste. I could easily buy single-variety specialty beans or blends (non-fair trade) and get top-notch taste.

The real reason is that I want to feel I am helping farmers in coffee-growing countries. Although I found it hard to pin down the numbers, conventional coffee growers receive $0.54 to $0.75 USD per pound for their coffee. In times of a world glut, they can get much less, as happened in 2001. Crop prices are not guaranteed. A lot of conventional coffee is grown on small family farms, but most of the profits go to middlemen. By contrast, fair trade coffee growers receive in the range of $1.26-$1.40 per pound for their coffee, guaranteed, plus additional sums for reinvestment into their cooperatives, and a premium for growing certified organic. (The two additional sums total about $0.50 per pound.) It seems clear that farmers benefit.

There is more to the story, though. The farmers must belong to cooperatives to be eligible. They must pay all the fees for the fair trade certification and organic certification. After growing expenses and fees, they are earning about half of the fair trade price ($0.63 to $0.70 per pound.)

On the plus side, of course, the farmers receive a fixed rate, their working conditions are safe, and no forced labour or child labour is used. The cooperatives are required to invest in community projects such as schools.

Meanwhile, back here in North America, fair trade coffee marketers are making bucket loads of money from us, the consumers! If my local fair trade coffee purveyors, Just Us, are paying $1.40/lb for coffee and selling it for $12.64/lb, they are earning $11.24/lb. and there are no middlemen. However, let us acknowledge that their cost of doing business is higher. The Wal-Mart coffee costs $0.75 (paid to the growers) and is sold for $2.88, earning $2.13, which would be split among the importers, roasters, distributors and sellers.

Now here is an interesting wrinkle. Just Us is also a cooperative, which reinvests 50% of its profits back into the company, and pays out 30% to its members and employees.

These are the factors that I am considering:

Q: Is it worth buying Fair Trade for the taste of the particular blends that I buy?
A: No, I can buy single bean varieties that I like equally well.

Q: Do I really care if I spend $0.30 or $1.32 per day for good coffee? ($110 per year vs $482 per year)
A: No, but I am fortunate to have the luxury of choosing.

Q: Is it important to me to support Fair Trade coffee farmers?
A: Undecided. Fair Trade farmers are required to use a business model that may not suit everyone. I like the idea of more money going into the pockets of all individual coffee farmers.

Q: Is it important to me to support the environmental and human rights standards of the Fair Trade movement?
A: Yes. These are the only reasons I would continue buying Fair Trade coffee. Conventional coffee depletes soil and forests, impacts wildlife, makes people work among toxins, and can include child labour and forced labour.

Q: Is it important to me to support local coffee importers, roasters and sellers?
A: In general, I like to buy local. But if I buy conventional coffee from a local roaster/seller, I am still supporting local business. So it goes back to the environmental and human rights issues above.

Q: Does buying Fair Trade coffee make a difference?
A: Yes, to coffee farmers and to the environment. Yet, fair trade coffee is only one of the hundreds of products I buy every month. At best, I can buy fair trade coffee, tea, cocoa, chocolate and sugar. That means the other 99% of products I buy are not available in a fair trade version.

Conclusion:

Fair Trade coffee has a symbolic value: if you buy it, you care about workers’ rights, human rights and the environment. If you don’t, you feel guilty of exploiting them. However, we rarely feel this way when we buy imported bananas, grapes, Nikes or iPhones.

One option would be to purchase fair trade products, but reduce our consumption so we can afford it. This means we mightn’t be able to drink coffee every day. The 63% of adults who drink coffee daily would have a hard time with this!

Another option would be to disregard the 5 fair trade products and buy them conventionally, but commit to buying as many local and in-season foods as possible. This would benefit local farmers, create and sustain local jobs, and be better for the environment. We can also grow, hunt, find, make, cook and bake as much of our own food as possible!

I would say: if I can’t or won’t buy fair trade coffee, I shouldn’t feel evil, because it is only one shopping decision out of hundreds. Instead, if I bought all my produce at a farmer’s market or bought in to a CSA, I’d also help farmers, human rights and the environment. I can’t ignore every opportunity to “do right,” but I can’t embrace every single one, either. If we are mindful of all of our choices, instead of just one symbolic choice, we can have an even greater impact!

As an aside, when we buy ground coffee, up to 30% of the weight is allowed to be twigs and other non-coffee material. This is true of all coffees, regardless of whether they are fair trade, organic or conventional. So we may be paying for only 70% coffee in our coffee!