Why now is the time to start drinking Fair Trade coffee

Being a coffee farmer isn’t easy.

This was one of the thoughts racing through my head as I straddled a shivering coffee tree on a steep, crumbly volcanic mountainside in Colombia’s Narino district. However, mostly I was thinking: “Don’t die! Don’t die!”

The “grande Gringo” as I became known to my coffee farmer hosts did not fall to his death, but, following my visit, coffee prices did.

In 2012, while I traveled to Honduras and Colombia researching my latest book Where Am I Eating? An Adventure Through the Global Food Economy, the global price for a pound of coffee beans stood at $1.60 . By November of 2013, prices fell to $1.00 per pound a six-and-a-half year low.

When I read the reports, I couldn’t help but think of Felipe Ordonez, the Colombian farmer who allowed me to molest his trees. Felipe is a wiry man who bound up and down his sloped mountainside of coffee like a billy goat. Like other farmers around the world, Felipe was concerned about the changing climate. (I met farmers on four continents and not a single one of them was a climate change denier.) His crop, facing wetter wet seasons and drier dry seasons, was threatened by coffee rust and beetles.

Coffee was how he fed his family.  Coffee was how he sent his kids to school. Coffee was everything to Felipe.

For years Felipe has sold some of his coffee to Starbucks. His farm was included in Starbucks C.A.F.E. (Coffee and Farmer Equity Program) Practices certification program. (I found that many of the Starbucks farmers had never heard of the global coffee giant even though Starbucks included them in their C.A.F.E. Practices program as evidenced by the plaque affixed to their homes.) Felipe hoped to sell his coffee through an additional certification: Fair Trade. (Note: Starbucks reports that 90% of their coffee is ethically sourced through their C.A.F.E. Practices program and 3% from third-party certifiers such as Fairtrade International.)

Like other certifications, Fair Trade requires that a certain set of social and environmental standards be upheld. But Fair Trade farmers also earn a 20-cent social premium and an additional 30-cents per pound if their coffee is certified organic. And there’s one other huge difference: Fair Trade has a set minimum price, currently at $1.40 per pound, which protects farmers from falling prices.

When the global coffee price is above $1.40, the minimum is a non-factor, but when prices are much below, Fair Trade is even more appealing to farmers.

“Fair Trade provides stability in the face of volatile markets, and farmers are recognizing this,” explains Jenna Larson of Fair Trade USA. “We’ve heard from a number of co-ops that new farmers are joining to access better prices. GRAPOS in Chiapas, for example, reported that membership was up 24% in 2013.”

When prices fall, so do the living standards of the farmers.

“This current market gives no hope for farmers to stay on their land, much less for the next generation to take over,” said Angela Pelaez of Expocafe, a Colombian exporter that works with farmer cooperatives. “The average age of coffee farmers in Colombia is 56. Nobody wants to invest in a business that doesn’t even meet the costs of production.”

“Fairtrade generates a base price, which really helps us, especially in a time like now,” stated  Fatima Ismael, General Manager at Soppexcca, a cooperative in Nicaragua certified by Fairtrade International, in the certifier’s October 2013 press release. “It gives us stability for our families.”

Low prices coupled with a crop threatened by coffee rust is threatening the livelihoods of many farmers in Central America. In 2013, FUSADES, a think tank in El Salvador, predicted that 500,000 farm and processing jobs would be lost in Central America because of coffee rust. Farmers who are losing money on every sale, and are being pushed to a cliff in terms of their
ability to invest in quality and productivity, are struggling to survive as coffee farmers.

Maybe you want to look on the bright side of things and are thinking: “At least my morning cup of coffee will be getting cheaper.”

Wrong.

Starbucks expects to see a positive impact on their bottom line of an extra $110 to $120 million this year, after seeing a $97 million benefit in 2013. It’s unlikely they’ll be passing much, if any, of the savings on to you.

Poorly compensated farmers are good for business. This is nothing new in the coffee industry. In The End of Food author Paul Roberts reported that from 1997 to 2002, the price of coffee dropped 80 percent, but the price to Starbucks’ customers only dropped 27 percent.

In 1991, global coffee revenue equaled $30 billion. It’s doubled to nearly $70 billion today. Yet in 1991, according to Antony Wild author of Coffee: A Dark History, producing countries earned 40 percent of the revenue. Today, as I document in Where Am I Eating?, they’re lucky to keep 10 percent.

We, as consumers, are paying more for coffee; producers are getting paid less; and those in the middle are making money from both.

Life for coffee farmers like my friend Felipe is already hard enough without facing collapses in the market.  By starting every day with a cup of Fair Trade, organic coffee I’m drinking coffee for which the farmers earned nearly 90-cents more than a regular cup of coffee.

That’s why drinking Fair Trade coffee is a simple act that makes a big difference.