We will be posting more in depth articles about this crisis and the impact it is having on the global coffee sector, but in the meantime, this article from the Guardian Newspaper in the UK helps to provide a good introduction to this important topic.

http://www.guardian.co.uk/world/2013/mar/26/mexico-coffee-crop-fungus

There are some interesting points raised in this short article that can help to stimulate the conversation around trade models. It helps to highlight an issue that is becoming increasingly vocalised by those in the coffee industry; the distinction between trading fairly and of FairTrade certification. A number of responsible roasters and coffee shops (primarily independents) are building direct-trade relationships with producers, built on fair and sustainable practices, but are by-passing the certification route, partly due to the cost to them and the producers, but also because of issues around quality. There are some interesting points raised in this short article that can help to stimulate the conversation around trade models. 

The United States is the world’s leading consumer of coffee with Americans drinking a collective 400 million cups per day of their favorite bean beverage.

Especially in recent years, coffee drinkers have become increasingly aware of the effect their addiction has on the farmers who grow coffee. This concern led to rising interest in fair trade coffees which guarantee a set price for the farmer.

Fair trade coffee may be popular with consumers, but local roasters are hesitant about its benefits.

In a global economy, the prices of commodities like coffee are based on futures, or forecasts concerning future crops in light of expected demand. In such a system, the farmers shoulder the bulk of the risk, said Matt Ramsey, owner of Mosaic Coffee Company in Shippensburg.

In the 1980s, for example, there was a global bumper crop of coffee and the price plummeted. Many farmers lost everything. “If that happened in America, we’d have an outcry,” Ramsey said.

Fair trade was an attempt to change that, but it doesn’t set the bar high enough. “Fair trade is good in its intent, but not in its practice,” Ramsey said.

Karen Rhody, owner of Courthouse Common Espresso Bar and Bistro in downtown Carlisle, said the guaranteed minimums offered to farmers working with fair trade co-ops have actually pushed farmers to choose between quantity and quality. “It doesn’t matter what the coffee tastes like, they’re going to get paid,” she said. “We’ve always had customers ask for fair trade but I never found a fair trade I liked.”

Plus, the coffee is purchased through a middleman — the fair trade co-op, Rhody said.

Rhody pointed out that the costs associated with attaching the fair trade label to coffee are “astronomical.”

Ramsey doesn’t purchase fair trade coffees, but does pay a price higher than that set by fair trade standards for the quality, handpicked beans he roasts. He’s quick to point out that most of the work in creating a good cup of coffee is done by the farmer. “I’m always trying to communicate to customers how valuable farmers are,” Ramsey said.

The work it takes to bring that cup of coffee to the average consumer is literally back-breaking. Ramsey said coffee beans like those he purchases are handpicked and carried in 100 pound bags to the processor. There, the beans are dried and prepared to be shipped out across the world.

Ramsey works not only to inform his customers about what it takes for a farmer to bring his coffee to market but he also wants to be able to tell farmers how much people here in America enjoy what they have harvested.

“There’s a lot of dignity in knowing that someone appreciates the work they’ve been doing,” he said.

Rhody chose to go the direct trade route, buying her coffees from La Minita, a Costa Rican farm that has now branched out to include Guatemalan and Sumatran coffees. The farm sets its own standards to be bird-friendly and grow its coffee without pesticides or herbicides.

“They do all these things without the certification and it’s just because they don’t want to pay for that stamp of approval,” Rhody said. “Every dime I pay for that coffee is going back into the farm.”

Like Ramsey, she pays more for her coffee than she would by going the fair trade route, but she said it’s worth it. “I know what I’m getting and I believe wholeheartedly in what they’re doing,” she said.

Source – The Sentinal Newspaper, Feb 2013.

This was evident on the issue of the direction being taken by Fair Trade USA, their split from FLO and their plans to open up their certification to large plantations – a move motivated (according to critics) by the interests of the multinationals. This issue has created a huge number of articles, blogs, comments and argument ranging from the CEO of Fair Trade USA defending his organisation’s actions, to the criticisms and pleas from many Fair Trade pioneers. From an outsider’s view, it almost looks like the Fair Trade World is slowly imploding.

There seems to be no end to those willing to offer criticism, opinions, defences or commentary on this issue. However, there is a group who are conspicuous by their silence – those very multinationals who are (apparently) at the heart of this debate – Nestle, Starbucks, Kraft and so on. In this entire furore, I have not found a single article or comment originating from any of the major coffee-buying corporations on this issue (I’m sure someone will now point out one that I have missed). This led me to set about scouring the web for articles, statements and anything at all I could lay my hands on from the major corporations that addressed the coffee trade, fair trade and ethics. There are a few, but very little.

I started to ask myself why the big corporations would be so silent on the ethics of the coffee trade. Surely, I asked myself, Nestle, Starbucks, Kraft and the others would want consumers to know how ethical they are, how hard they work to be fair to producers, how sustainable their products and brands are? It seems not.

Why could this be? Well, the simple, unscientific, conclusion I have come to (and this will come as no surprise to anyone) is that they probably don’t care; ethics, fair trade are merely a distraction, a side show to the real business of making money. And, more importantly, on the face of it, they don’t need to care. Why do I say this? Well, let’s take one snapshot as an example:

I have carried out some very unscientific research and looked at Facebook. Nestlé has various Facebook pages, including for example, Nescafé. The combined Facebook pages for Nescafé, Nescafé USA, and Nescafé Philippines have around 3.8 million fans. The Nespresso Facebook page has 1.7 million fans. These are huge numbers, but seem dwarfed by Starbucks which has 30 million fans. Now let’s contrast that with The Fairtrade Foundation in the UK, which has 76,200 fans, Transfair Canada which has 1,600 fans and the World Fair Trade Organisation which has 15,200 fans.

There are numerous conclusions we can draw from this very quick and somewhat lazy bit of research but, for me, the most telling thing is that Nescafé, Nespresso, Starbucks and the like are desired lifestyle brands. They have captured the imagination of consumers, and project an aspirational lifestyle. They don’t need to care about ethical values because that’s not what their followers are interested in or aspire to. If this is the case, then no amount of criticism, attack or evangelising on the part of Fair Trade advocates is going to make a difference. If we want ethical trade to become genuinely mainstream, then we need to look at what the corporations have achieved with their marketing – perhaps we need to make ethical trade an equally aspirational lifestyle brand?

Written by Ian Agnew,  Black Gold Foundation

Drinking coffee may have a benefit, besides the usual “pick me up” that many rely on to get their day started. But many who partake in the beverage have no idea of the impact that their caffeine habit has on coffee farmers across the globe.

A new study published this week in the the New England Journal of Medicine has found that drinking coffee may lead to a longer life. But for those who grow coffee in countries across Latin America and Africa, poverty, human rights abuses and low life expectancy rates are commonplace.

To combat this situation, the fair trade coffee campaign has been gaining traction with consumers across the globe hoping to ameliorate the living conditions of some of the world’s most impoverished people through their own choices about consumption.

Click here to read this powerful article by Carissa Wyant of  MintPress: Coffee Industry’s Ethics Leave a Bitter Taste in Consumers’ Mouths

This May 2012 article in the UK Observer Newspaper, by acclaimed environmental and ethics journalist, Lucy Siegle follows the climate challenges faced by coffee farmers the World over and how coffee producers in Peru are attempting to tackle these.  http://www.guardian.co.uk/environment/2012/may/13/peru-coffee-climate-change-carbon-trading

Liz Evers has been the Communications Manager at Twin and Twin Trading Ltd since 2011. A long-time supporter of fair trade, she has a background in sustainable development and ethical finance.

The name Twin may not be familiar to those outside fair trade circles. But this small, hard-working organisation is the driving force behind many well-known, fair trade brands and has played a key role in improving conditions for thousands of smallholders in the developing world during its 25 year-plus history.

Twin’s is a unique model: it is a trade development charity working with smallholder farmers in some of the hardest hit regions of the world, and through its commercial arm, a trading company (http://www.twin.org.uk/trading), which can create valuable market access for these smallholders, buying and selling their produce at fair prices. Any profits from its trading activities go straight back into projects on the ground to strengthen smallholder organisations and help them grow.

Twin’s approach to trade development is based on the principles of partnership and ‘acompañamiento’, an expression in Spanish that describes a long-term relationship based on solidarity and a shared vision and mission. It builds long-term partnerships with smallholder organisations, working closely with them to organise and develop their businesses, strengthen their capacity in product quality and market access. Particular focus is given to supply chain management, providing producers with market information and business planning, quality improvement systems, risk management assistance and export capacity building.

Twin is a membership organisation, currently with 32 producer members – coffee, cocoa and nut co-operatives and unions from across Latin America and Africa organisations – and 26 individual members from the world of fair trade and development. Members are at the heart of Twin’s decision-making, electing council representatives and defining the organisation’s strategic priorities.

Today, Twin is a leading importer of Fairtrade commodities, chiefly coffee, in the UK – working with over 50 democratic farmer organisations in 18 countries representing some 400,000 smallholder farmers.

“Twin is not just a pioneer but a hero of our fair trade movement, with fantastic expertise in the building and strengthening of small farmer organisations, and development of the most innovative business models. Their vision and partnership approach has enabled small farmers to strengthen their position in global trade, take more control of production and export, and to own some of the UK’s most loved 100% Fairtrade brands.” – Harriet Lamb, Executive Director, Fairtrade Foundation

Twin’s history

Established in 1985 as the Third World Information Network, Twin spent its formative years trading and exchanging goods from countries excluded from international trade opportunities for political reasons, such as Cuba, Nicaragua and Mozambique.

The collapse of the International Coffee Agreement in 1989 focussed Twin’s attention on coffee and trying to get the best price for smallholders in the world’s most deprived areas. Pioneering the fair trade concept in the UK, Twin imported its first container of coffee on credit in 1989 and went on to set up the very first Fairtrade certified coffee brand, Cafédirect (http://www.cafedirect.co.uk/), in 1991.

Other consumer-facing brands launched by Twin included Divine Chocolate (established 1997 and co-owned by Ghanaian cocoa co-operative Kuapa Kokoo), AgroFair UK (launched 2001 to market new Fairtrade-certified fresh fruits in Britain for the first time), and Liberation Foods CIC (launched 2007, co-owned by smallholder organisations and now the UK’s No.1 importer and supplier of Fairtrade-certified nuts).

See the following links for more information:

http://www.divinechocolate.com/default.aspx

http://www.kuapakokoo.com/

http://www.agrofair.nl/site/

http://www.chooseliberation.com/

Twin’s projects in the developing world

Woman coffee farmer picking coffee cherries, Nicaragua

Twin’s mission is to develop projects and trade opportunities for the poorest and most marginalised in the trading chain. It has recently begun working and trading with coffee co-operatives in the conflict-effected Democratic Republic of Congo (http://www.twin.org.uk/projects/bringing-new-producers-market-democratic-republic-congo) for example, and is dedicated to reinvigorating the ailing groundnut industry in Malawi (http://www.twin.org.uk/projects/reinvigorating-groundnut-sector-malawi-and-southern-africa) – to increase income from exports, but also to provide a much-needed source of safe nutrition domestically.

To this end Twin recently opened a new peanut processing plant, Afri-Nut Ltd, in Malawi’s capital Lilongwe (http://www.twin.org.uk/projects/afri-nut-ltd-landmark-groundnut-processing-plant-malawi). This facility is part-owned by the National Smallholders Association of Malawi and adds significant value for its producer-owners. It is also a key part of Twin’s long-term vision to improve the quality and safety of groundnuts for domestic consumption in Malawi – which have long been blighted by aflatoxin, a carcinogenic mould responsible for a high percentage of liver cancers in Malawi and southern Africa.

Twin is a responsive organisation, seeking out partners most in need of practical assistance and identifying key areas to develop. In Latin America, Twin is working with partners to help them understand and manage the risks of the volatile coffee market and also, in Peru, supporting them to engage with governments on a local and regional level. Twin has identified gender justice and the need to adapt for climate change as key issues for its future work.

On a recent trip to the Rwenzori region in south west Uganda, I saw firsthand the difficulties smallholders are facing in both these areas, particularly climate change. Changing weather patterns, longer droughts and later rains are affecting the yields and livelihoods of coffee farmers in that area and indeed across the developing world.

Twin is now working closely with its producer partners to identify ways it can support them to adapt their practices and build resilience to climate change. A pilot project has already been launched in Uganda (http://www.twin.org.uk/projects/climate-change-adaptation-mount-elgon-uganda) and more are to follow. While in Nicaragua, Twin has just commenced a bold new project which aims to benefit 10,000-plus households, working with smallholder coffee farmers, to help them to gain the skills and knowledge they need to adapt to climate threats and also to provide training in price risk management, which is vital for protecting smallholder incomes in a changeable market. (http://www.twin.org.uk/news/twin-wins-funding-ambitious-new-project-nicaragua)

Other new Twin initiatives include creating an innovative coffee marketing collective in East Africa to help producer organisations work together to get the best price for their speciality coffees on the international market. (http://www.twin.org.uk/projects/joint-marketing-and-business-services-coffee-producers-africa)

Climate change workshop with Gumutindo members

For more information please visit:

http://www.twin.org.uk and http://www.twitter.com/twinfairtrade

Click here to read the article by Jean Friedman-Rudovsky.

Coffee co-operatives were a government unto themselves. They owned large investments across all sectors of the economy. Kenya’s economy was growing at an average rate of 7%. Everything looked rosy until the coffee prices collapsed in the early 1990s.

Many coffee co-operatives could no longer afford to sustain their activities. Farmer deliveries were not paid, bank loans could not be serviced and workers not paid. This state of affairs, fuelled by corruption at national level led to collapse of many giant co-operatives. There was sustained looting of co-operative property as banks moved in to auction what was left to recover their loans.

Many farmers despaired and decided to pursue other profitable enterprises. For those who kept faith in coffee (often people too old to start other enterprises), they continued to suffer years of poor leadership and corruption. Production declined from 130,000 tonnes annually to about 55,000 tonnes in 2008.

Rising Above the Tide

Gikanda coffee co-operative in Nyeri County Kenya was Fairtrade certified in 2007.

Gikanda is made up of 3 primary societies with a total membership of 2,700 farmers. The co-operative had suffered years of mismanagement. The year prior to certification, Gikanda paid its member Kshs 30 (0.27 Euros) per kilo of cherry. There was also a lot of complaint about farmers being short changed on the actual volume delivered since recording was inefficient and subject to abuse.

The rigorous process of Fairtrade certification ensured that Gikanda had to put strong management and governance structures in place. Their business plan ensured that they make their services efficient and transparent.  Decision making was made participatory.

The co-operative gradually registered increased returns to its members. In 2011, it paid an average of KShs 107 per kilo of cherry delivered.  The cooperative has eliminated class 7 and 8 coffee since it joined Fairtrade. As a result, the coffee sells out fast during the coffee auctions attracting premium prices. In 2008, it was the best paying co-operative in the country. The co-operative also won recognition from a leading UK retailer for being a trusted supplier. The co-operative has also been able to improve its facilities. It now occupies a modern office building (probably the best in Kenya for coffee co-operative). The chairman Mr Muriuki attributes the success to responsive and accountable governance that his board has put in place.

Fairtrade premiums Use at Gikanda cooperative

Gikanda has invested its Fairtrade premiums in various projects. Thenge-ini primary school was rehabilitated in 2009. A local health center has been equipped as well as rehabilitation of coffee drying beds.

The Struggle for Food Justice in Fair Trade (By Christopher M. Bacon, Kaelin Holland and Eric S. George)

“For decades smallholder farmers and food justice advocates have used fair trade to build collective power by combining responsible consumerism and political awareness with a fairer and more environmentally sustainable market. Changes in fair trade certification enabled large corporations to enter this market, leading to a dramatic increase in sales—now topping $5 billion globally. Unfortunately, this growth has been accompanied by lower economic returns to farmers and disturbing social and political trends that threaten the future of the movement and suggest that fair trade is not as fair as it used to be.”

Click here to continue reading ‘The Struggle for Food Justice in Fair Trade’.

The following is a reflection from a trip to California and a recent meeting with Fair Trade USA.

Fair Trade USA has a single minded focus. To use fair trade as a tool to reduce poverty. And the fastest way to impact that poverty is to maximize the volume of fair trade – in effect: more fair trade equals less poverty. Viewed through this lens, Fair Trade USA’s commitment to widen the beneficiaries of fair trade coffee from small farmer co-ops to small farms and large plantations is understandable.

And of course, the best way to deliver volume is to work with those companies who can offer those volumes – large global corporations. So by splitting from FLO, Paul Rice and his team’s ambition may well be to create a certification system that is more corporate led, operates more efficiently than the current bureaucracy laden FLO, is less politicized and can compete on equal terms with other businesses like IMO, Utz Cafe and Rainforest Alliance et al for new customers.

By focussing on corporates as a core customer, Fair Trade USA is aligning itself to the current system of trade which if successful, may well deliver a slightly more benevolent system that might indeed reduce poverty.

But it won’t change the system. And changing the system, changing the way we trade, is why fair trade was established. To create change.

Change in the supply chain, change in delivering new markets to marginalized farmers,  change in capacity of small farmers to access credit, change in consumers understanding of the influence (for good) they yield, change in fact to the market structures and systems that perpetuate that poverty.

And it’s this schism in ‘the movement’ that is creating all the headlines – in the ghetto at least.

(But this is not new news, in fact some would say that this all started back in the nineties when tea, fair trade’s third product was certified. That by using existing supply chains (i.e.plantations) to deliver impact through volume, and not building new ones (i.e. small tea farms) to deliver volume through impact, the seeds of this schism were sown.)

So one could say that the imminent appearance of Fair Trade USA’s ‘fairtrade certified’ labels on many of the world’s biggest brands in many of the world’s supermarket aisles finally acknowledges the elephant in the room. Namely that by having Nestle and Cafedirect, Cadburys and Divine, Starbucks and Equal Exchange all under the same label apparently doing the same thing was dishonoring the intent, commitment and beliefs of pioneer brands and their small farmer partners who set out to change the world.

And for that we should be very very excited,  because for pioneer brands this is an immense opportunity.

Because this change will mean more competition coming into the market with the breaking up of the ‘FLO monopoly’; more confusion, with consumers struggling to keep up with the new certification labels; more certifiers, but with (thankfully) less influence; more volume, but paradoxically with the chance of less impact on the ground and of course, more companies becoming 100% fair trade (the corporate friendly type that is).

And for pioneer brand’s, who go way beyond the cleansed and simplified (and now largely redundant)  message of ‘we pay more’ the opportunity is to harness the rich and complex messages of market access, long term relationships, farmer ownership and empowerment, the provision of credit and the development of capacity building into a truly differentiating and compelling message that can once again have a chance of changing the world.

Whilst this will be a daunting task, what this schism as done is to create the space again for pioneer brands to demonstrate the integrity – the wholeness – of their intent. To pursue change at all costs.

Fair trade is dead. Long live fair trade!