What’s up with Fairtrade,
and why aren’t you using it exclusively?
The discussion around Fairtrade is a long one, with a lot of economic theories and data analysis to wade through. I love that sort of thing, but am quite aware it’s generally considered boring, so I’ll stick to key points and ideas about why Fairtrade exists, what it aims to do, what it really does, and why the specialty coffee that Flight Coffee roasts isn’t Fairtrade certified though we obviously support the aim of the system.
If you’ve watched any of the hilarious but saddening Republican presidential campaign, you will have heard the term “unregulated” or “free-trade” thrown around regularly. Theoretically, everyone would be better off if the markets were left unregulated to find the most efficient prices and producers, and this is true until you are dealing with agriculture or developing nations… of which we have both when we deal in coffee.
Free-trade and other classical and neo-liberal trade theories rely on conditions which simply do not exist in the agricultural societies of most developing countries. For a free and open trading system to work there needs to be certain conditions available to everyone:
- perfect access to markets,
- perfect access to credit,
- perfect market information, and
- the ability to respond to market information.
This simply cannot happen in the agricultural industry based in developing nations. You can imagine why the first three don’t exist, and the fourth point is impossible due to the life cycle of a coffee tree. The output of a farm over the coming years is set in motion when the trees are planted. Regardless of the market information available, farmers simply cannot respond effectively by changing output or crop.
The world has witnessed and noted the consequences of unregulated trade with developing nations over the last 40 years - competition in the global commodity markets has caused prices of coffee, sugar, cocoa and cotton to drop 30-60% from 1970 to 2000. This is fantastic for the shareholders of large companies who derive happiness through accumulating wealth, but the flip-side is the very real negative impact on the producers. Fairtrade was created as an answer to this problem when international agreements couldn’t be reached.
Fairtrade addresses this market failure by providing producers stable price for their crops, access to diverse markets, and business support. It’s a closed market where the producers need to become certified and join the program, and so do the buyers. The buyers are audited, the prices are controlled, and there is a focus on changing consumer behaviour towards thoughtful consumption. The push from the consumers up has been amazingly successful, as is indicated by Starbucks and McDonalds reaching the point where it makes financial sense to buy and sell Fairtrade coffee.
You all know the blue, green and black stylised waving person as the Fairtrade label in New Zealand, but there are actually many different fair trade organisations around the world. Together they make up the Fairtrade Labelling Organisations International, and in 2008 they estimated that over 7.5 million producers and their families were benefitting by being part of a community with a cooperative in the Fairtrade system.
Fairtrade’s aim of helping those most marginalised by the global trading system is working. To have maximum impact, Fairtrade is focussed on coffees of a quality that don’t demand extremely high prices in a free market. Naturally a majority of coffee consumption isn't by people seeking specialty coffee, but rather the largest quantity of coffee produced is to be consumed by people desiring a latte with two sugars, or coffee from the office vending machine, or some instant to slam back quickly in the morning. Changing consumer behaviour in this area of the market has the largest impact, and it is here that they've been performing.
Of course, Fairtrade is not the only system helping to improve the financial situation of the small farms which make up 70% of coffee production, not by a long shot (espresso pun). There are thousands of roasters and traders who deal directly with growers, and have projects in developing communities who aren't part of the Fairtrade system. They shouldn't be disregarded at all; often a simpler relationship like that of a single farm with a single buyer can be more efficient. The difficulty comes when as a consumer you need to work out which roasters and traders really are good, and which ones just say they are. So do be sceptical, and ask questions of coffee traders claiming great things.
The second thing I want to write about is specialty coffee and where it fits in relation to Fairtrade coffees. Fairtrade certified coffees can be of high quality, and can produce great espresso, but that's not the focus of the program, and the system doesn't extend to high end specialty coffee. Specialty coffees do not need any help outside the free market to fetch high prices.
I’m writing this right now from Varginha, Brazil, on the final day of the first ever Natural (as opposed to Washed or Pulp-Natural processing) Cup of Excellence competition. This is fitting as the Cup of Excellence started here in Brazil back in 1999. Known as “the Oscars for Coffee” this is the most esteemed award given to top coffees around the world. Coffees of this quality are very rare, and now, after a week of intense cupping, an international jury has scored and ranked the very best natural coffees in Brazil.
The top ten coffees I had the privilege of cupping this morning were absolutely insane. Perfectly developed, carefully processed using the most traditional of techniques resulting in amazing sweetness... just imagine the most flavoursome coffee you’ve ever tried, and now forget about it, because this was nothing like that.
The best of the Cup of Excellence winners will go on to be sold in an auction and will fetch around NZ$60/Kg, before shipping, before roasting, just green and in a vacuum sealed bag. That’s a pretty stark difference to the Fairtrade labelled Starbucks coffee, which they purchased for an average of NZ$4.16/Kg in 2010. This is an example of how a completely different area of the coffee market operates, it’s not a competing idea with the same goal; it’s different.
Specialty coffees demand their own price, and farms that win awards for quality reap benefits for years to come. Raising quality is a completely natural way of achieving a higher price for some growers without any imposed market controllers.
Specialty coffees that are of exemplary flavour are almost always from single farms, produced in carefully controlled micro-lots. The Fairtrade model however is one of cooperatives. To achieve its aim this is the smartest way to have the system. Though the farms in a cooperative can all produce high quality coffee, it is virtually impossible to find consistent amazing coffees when a range of farms are adding their different products to the mix. Flight Coffee aims to buy coffees of extremely high quality that we just could not get, understandably, through the Fairtrade system.
Though not the original focus, there is a positive natural flow on effect for the farmers involved in specialty competitions. Any farm can enter, and the samples are treated the same and cupped completely blindly so it is an even playing field. Buyers of specialty coffee all around the world pay attention, and the top farms catch the attention of people who seek consistent long term high quality coffee trading relationships and are willing to pay for it. It's a quick and fair way to find good farms so it just makes sense to do.
We will continue to buy Fairtrade coffee when it is good, consistent, and available. However we’ll also be purchasing much higher quality coffees by developing long term trading and development relationships with small farms and growers who are focussed on quality, who are very particular about their product. To be clear, the aim of the Cup of Excellence competition is simply to find the best coffee in the world; this is not the same aim as Fairtrade. Not all the farms in the world can be the best. Trading the very best specialty coffees happens alongside Fairtrade and directly sourced coffees, not instead of.
I hope this has helped to explain why Fairtrade's primary focus isn't quality (though it must be noted that their help with farm’s infrastructure does generally raise the quality of an area), but rather consumer education, why that is a good thing, and why specialty coffee isn’t often certified. Fairtrade is not the only way to benefit farmers, but it has had great and wide impact, and specialty coffee is different kettle of beans altogether.
Finally, on a personal note, I think that one of the most important and universal things that all humanity would benefit from is increased thought and education around consumption; what do we really want and need, where do products come from, and who and what do our behaviours affect? Fairtrade has continually and widely sparked this formative train of thought for many people and that deserves great recognition - as it’s the conscious consideration of individuals’ behaviours that will have the largest overall positive effect long-term.
Thanks for reading, feel free to email me,
Matt Graylee
Flight Coffee | NZ +64 21 0240 4794 | USA +1 (617) 401 6181 | matt@flightcoffee.co.nz | www.flightcoffee.co.nz