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Coffee is a rallying point for Fair Trade movement

Humanitarian and religious organizations have been trying for almost 15 years to aid commodity and craft producers around the world by setting fair price standards.

In 1988, in response to falling coffee prices worldwide, a Dutch group founded the Max Havelaar Foundation to provide a label for companies trading their products on Fair Trade terms. In 1997, an umbrella group, the Fairtrade Labelling Organizations International, was created in Bonn, Germany, to set international labeling standards. TransFair USA is the U.S. member of this group.

Spurred by mistrust of the World Trade Organization, Fair Trade is a growing issue among anti-globalization and human rights groups -- and once again, coffee is a rallying point.

Coffee is now in the spotlight because a glut on the world market has driven commodity prices down to a 100-year low. In September, the British human rights organization Oxfam reported that Asian, African and Latin American farmers now receive about 24 cents a pound for their coffee beans, even though the production price is about 80 cents a pound. The Fair Trade coffee commodity price is $1.26 per pound. The study noted that four multinational corporations, Sara Lee, Kraft, Procter & Gamble and Nestle, buy nearly half of the world’s coffee. These corporations continue to sell coffee at an average of $3.60 per pound.

The oversupply was partly caused by a trend toward sun-grown coffee. Many large growers have cleared forests and planted a hybrid sun-grown coffee that provides higher yields per acre. Human rights groups advocate the purchase of shade-grown coffee because small farms don’t have the capital to clear forests and buy the chemicals and fertilizers necessary for the sun-grown variety. Shade-grown coffee is also environmentally sounder.

Coffee purveyor Kerry Appel noted, “Coffee is important because coffee is the second-largest legally traded commodity on the world market, behind oil.” Coffee is produced in more than 60 countries, mostly in a belt around the Earth between the Tropic of Capricorn and the Tropic of Cancer. An estimated 100 million people worldwide are involved in production, many of whom are poor and exploited. Appel said, “If coffee alone were traded in a fair and sustainable manner, then it would improve the lot of huge numbers of people.”

Although Fair Trade practices must be matched to the producers’ needs, the challenges faced by coffee growers are similar to those of other craft and commodity producers in underdeveloped countries. They lack access to world markets due to systematic oppression, social and geographic isolation, and lack of money for seed, equipment or raw materials. Many must deal with predatory middlemen who have access to world markets but pay abys-mally low prices.

For commodities, the Fairtrade Label-ling Organizations In-ternational stipulates that traders must:

  • Pay producers a price that covers the costs of sustainable production.
  • Pay a premium that producers can invest in development.
  • Make partial advance payments to prevent producers from falling into debt.
  • Sign contracts that allow for long-term planning and sustainable production practices.

A good fair trader will help improve working conditions and product quality, increase the environmental stability of the production activities, and help improve living conditions for the producers or workers. This often includes infrastructure development, education and human rights advocacy. Child or forced labor should never be used. Many groups also strive to educate the consumer, providing information about the physical and social conditions under which the product was made.

-- Melissa Jones

National Catholic Reporter, December 27, 2002