Fair trade coffee is coffee which is purchased directly from the growers for a higher price than standard coffee.
How it Works
Fair trade coffee is one of many fair trade certified products available around the world. The purpose of fair trade is to promote healthier working conditions and greater economic incentive for producers. Coffee farmers producing fair trade certified coffee are required to be part of a coop with other local growers. The coops determine how the premiums from fair trade coffee will be spent. Growers are guaranteed a minimum price for the coffee, and if market prices exceed the minimum, they receive a per pound premium. Fair Trade coffee has become increasingly popular over the last 10 years, and is now offered at most places coffee is sold. In 2004, 24,222 metric tons (of 7,050,000 produced worldwide) were fair trade; in 2005, 33,991 metric tons out of 6,685,000 were fair trade, an increase from 0.34% to 0.51%.
The Fair Trade Certification label allows farmers and farm workers to escape poverty by providing them the skills and the means to compete in the global market of agriculture products. Although Fair Trade began in the late 1940s, certification and labeling was not enacted until 1988. This label assures consumers that strict social, environmental, and economic measures are taken when the production and trade of an agriculture product occurs. Fair Trade standards require that farmers receive fair wholesale prices for their crops. This ensures that farmers will receive approximately $1.26 per pound of raw coffee beans as opposed to the world market average of $.60. Farmers who are involved with Fair Trade receive minimum floor price and an additional premium for certified organic products. In addition to the price standards of Fair Trade labeling there are other principles that must be abided by.
The following standards must be met for Fair Trade Coffee Certification:
- Fair labor conditions: Those who work with Fair Trade farms are able to work with freedom of association, safe working conditions, and fair wages. Child labor is strictly prohibited.
- Direct trade: With Fair Trade, importers purchase from Fair Trade producer groups as directly as possible, eliminating the middle man and letting the farmer compete in the global market.
- Democratic and transparent organizations: Through proof of a democratic market, Fair Trade farmers and farm workers decide how to invest Fair Trade revenues.
- Community development: Fair Trade farmers and workers invest Fair Trade premiums in social and business development projects like scholarship programs, healthcare services and quality improvement training.