Rewarding the Coffee Growers and the Coffee
Drinkers: The Fair Trade Solution
By Nana Kim, President of NaS Coffee
What does paying an extra two cents per cup of coffee have to
do with transforming the lives of farmers in such diverse nations
as Ethiopia, Jamaica, and Brazil? And how could those two cents
also benefit American consumers? That little extra bit of money
represents the difference between "free trade" and "fair
Current free trade policies are failing both American and foreign
workers. Increasing globalization and a free market system have
greatly expanded U.S. dependence on Third World exports. The
American consumer has benefited in the short term from this equation,
paying lower prices for imported goods.
But a downside has emerged: American manufacturing jobs have
been lost as domestic factories have moved offshore while the
developing world has been exploited for cheap labor.
The free trade market has hit Third World coffee growers exceptionally
hard. Overproduction has pushed coffee prices to all-time lows
of less than $1 per pound. Such low rates have benefited American
consumers because coffee is the nation's second largest import
(surpassed only by oil), with the U.S. consuming 20% of all the
world's coffee. However, this overproduction means that farmers
in the developing world are receiving prices for their coffee
that are less than the cost of production, forcing them into
debt and jeopardizing the coffee industry's long-term
stability. Though prices
have fallen for farmers, large coffee companies have not lowered
consumer prices, and are instead pocketing the difference because
they control all of the intermediary steps of delivery (local
middlemen, exporters, and brokers).
A shift to "fair trade" policies can rectify this imbalance.
Fair Trade assures consumers that the coffee they drink was purchased
under equitable conditions. Farmers ship their crops directly
to participating Fair Trade certified importers who pay a minimum
price of $1.26 per pound ($1.41 for organic crops) and who provide
technical assistance for help in transitioning to organic farming.
Thus, coffee farmers who participate in Fair Trade cooperatives
are able to avoid price-gouging middlemen and can receive fair
rates for their labor.
Instead of poverty and hunger, fair trade can ensure the very
survival of the family owned farms that deliver much of the
world's coffee. The difference to the American consumer is mere
pennies per cup of coffee, a worthwhile trade to support family
farms and to maintain a stable coffee market. It's worth noting
that organically grown, fair trade coffee is free of petrochemicals
and is tastier than regular coffee. It's a healthy bonus for
those few extra pennies and a difference one can actually taste.
Nana Kim is President of NaS
Coffee, an organic, fair trade
espresso chain based in San Francisco, CA.