This article discusses pros and cons of the Fairtrade labelling system, with a focus on its brand and ability to protect disadvantaged small holder coffee producers. To read more about the history and creation of Fairtrade labels read the previous post here.
1) Fairtrade labelling has increased awareness on how coffee is sourced
The Fairtrade movement grew from the 2001 Coffee Crisis, where the influx of commodity coffee in the market; drove coffee prices down to 80 cents per pound. Many producers couldn’t cover the cost of coffee production and this pushed many out of business. This had a direct impact on more than 100 million people involved in the coffee supply chain.
Being so behold to market forces, particularly how the volume of coffee in the market has a direct impact on the price of commodity coffee (read more in the previous post here). Fairtrade’s minimum price of $1.40 for washed Arabica coffee beans means that producers are at least able to cover the minimum costs of coffee production. Democratic co-operatives are also awarded $0.20 per pound to improve quality and productivity.
Fairtrade labelling should be commended because they have successfully brought global recognition of the volatile circumstances small-scale farmers experience.
However, by raising the profile/brand of ‘equitable’ coffee sourcing, it has been perceived as the ‘catch all’ of equitable sourcing practices.
Though, you don’t see brands like Nespresso shouting out the impact their aluminium capsules have on the environment while engaging in sustainable sourcing practices with not-for-profit Technoserve.
There is an analogy that can be made with Nespresso, where the very branding of ‘fairtrade’ speaks that it is THE ‘Fair’ certification for sourcing (not speaking of other, empowering alternatives). In a similar way, Nespresso’s ‘sustainable sourcing’ with Technoserve, may be perceived as a catch all category for how Nespresso sources its coffee.
Silence and inaction to the contrary, has worked to mislead the market in non-fair trade alternatives. Direct trade for example is another method where coffee buyers contact coffee producers, and offer a higher price in exchange for high quality coffee and a long-term relationship. This long-term relationship with a mutual interest in high quality coffee, similar to fair trade’s ethos seeks to invest in improvement in quality and production. However it should be noted that there is no ‘body’ governing ‘direct trade’ and to what extent trade, is direct trade.
The next article will have a look at transparency in the Specialty Coffee Sector and look at Counter Coffee Culture and Tim Wendelboe as examples. Sign up to the newsletter to receive the next post.
2) Fair trade labelling serves to protect marginalised coffee producers (those most at risk of market forces)
Under the international fair trade labelling organisation’s (FLO) guidelines, only small holder farmers part of a democratic co-operative system are eligible to be ‘fairtrade’ certified. At heart, this has the intention that every farmer has an equal right to vote. Accordingly the profits from the cooperative in theory should be divided between the small holder farmers.