What is fair trade coffee?

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What is fair trade coffee?  

Put simply, fair trade coffee has been certified by  an independent organization as having been produced by small farmers in developing countries.  To earn this certification,  those farmers must meet certain standards of production, human rights and community development.  Once certified, fair trade coffee is sold at no less than the minimum price established by the certifying organization (Fair Trade Labeling Organization (FLO) sets the prices and standards for Fair Trade coffee).

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The problem for small farmers is that coffee prices can fluctuate widely. Historically, coffee prices have spiked when coffee production was limited and demand was high, and have plummeted when coffee production exceeded demand.   These small businesses can not reduce their costs or ride out some minor losses when the price goes down. The minimum prices set by FLO are not set based on market conditions, but are set instead based on the average cost to farmers for producing coffee. Knowing that their costs will be covered, farmers have the safety net they need to continue to produce coffee year after year.

But fair trade certification does not stop there.  In addition to setting a minimum price for coffee,  fair trade also sets a Fair trade premium.  This premium does not go directly to the farmer for his coffee, but rather it goes into a community fund, and is used in whatever way the coffee producers and /or the coffee workers democratically decide to use it.  This money must be used to improve their economic, environmental and social conditions.  With these funds, farming communities can invest in education, healthcare and adequate housing.

So what is fair trade coffee?  

It is the opportunity for small family owned farms and farming communities to escape poverty. It is also the assurance for individual workers that their working environments will be safe and that they will be paid a fair wage for the work that they do. 

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It is also an opportunity for you to help build a market place that treats the "little guy" fairly. Fair trade coffee may cost you a bit more, but now you know why. Consumer support is critical to the success of the fair trade concept. Without consumer support, it hardly matters what price is established if the coffee does not sell.   

In fact, fair trade coffee was born in 1987 out of a survey that indicated that consumers would in fact buy higher priced fair trade coffee.   The idea for fair trade actually took off in 1987 when two Dutchmen, looking for a big-brand partner to establish a fair trade coffee brand, were frustrated by the lack of interest from the coffee giants. So they decided to launch their own brand -- relying on a survey that told them that as much as 15% of the Dutch coffee drinking public would support fair trade. The brand was launched and was tremendously successful. From that time to this, fair trade coffee has had a small but growing presence in the global coffee market.

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