The What, Why & How of Fairtrade Coffee looks at how fairtrade works, where it can fail (or be abused) and why it is necessary until a direct trade certification comes along.
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The What, Why, How of Fairtrade Coffee
1. Fair Trade Coffee
The What,Why & How of Fairtrade Coffee
By Coexist
www.CoexistCampaign.org
www.Coexist.org
2. Shameless Plug #1
Yes, we are the “Bumper Sticker People”
The Coexist Campaign sources products from Post-Conflict Areas
Our Coexist Coffee is a delicious, Fairtrade product from Uganda
8. What is Fairtrade?
A Fair Price Paid to Producers
A Focus on Direct Trade
Cooperative Structure Support
No Child Labor
9. What is Fairtrade?
Fairtrade Premium:
• At least 5cts of the Fairtrade premium must be invested in the improvement of
productivity and / or quality of Fairtrade coffee.
• Investment can be made at the level of individual members and/or the
producer organization.
• The General Assembly decides on the activities to be carried out.
• The producer organization needs to keep records on the use of the monies
and to explain in which way it contributes to the improvement of productivity
and/or quality.
Coffee from Fairtrade Producers
13. What did we Pay?
150 bags Non-Organic washed Arabica at $1.80/lb or
NYC + 0.45 which ever is higher. Price includes .20
cents social premium and .25 cents quality premium
150 bags Organic washed Arabica at $2.20/lb or NYC
+ 0.75 which ever is higher. Price includes .20 cents
social premium, .30 cents organic premium, .25 cents
quality premium
15. The Fairtrade Goal
Stable Prices
The Fairtrade Premium (reinvestment)
Partnership
Empowerment of Farmers & Workers
16. Is it Working?*
Yes
• Pro-Competitive effects
(raises prices in a region)
• Reinvestment does improve
quality and yields
• Increases Social Capital
No
• Little evidence Fair Trade
conditions or monitor have impact
• Still not competitive with private
producers (plantations)
• Fairtrade cannot overcome other
problems like infrastructure and
access to finance
*Milford 2004
17. Common Criticisms
Floor Price can attract poor quality products
Certifications impose overheads that can be crippling
The Free-Rider Problem
Coops need to form Organically, Cannot be Forced
18. The Catch 22
In Coffee, well-functioning coops are more important
than a Fairtrade certification…
Good Coops are more important than Fairtrade Certs
But, it’s difficult for consumers to make informed
decisions without Fairtrade certifications on products!
20. What do these mean?
Fairtrade International Mark
Fairtrade USA Mark – a separate org
FLO-CERT is the certifying body of Fair Trade International
Consumer Facing
Producer Facing
21. The Coffee Value Chain
Farmer
Private Intermediary
Processing Plant
Local Exporter Coffee Buyer
Retailer
Roasting Company
ConsumerOrigin Country
Consumer
Country
22. The Biggest Impact
Farmer
Private Intermediary
Processing Plant
Local Exporter Coffee Buyer
Retailer
Roasting Company
ConsumerOrigin Country
Consumer
Country
Buying Direct!
23. The Gumutindo Example
Gumutindo is a cooperative of
cooperatives in Mbale, Uganda
Gumutindo has 17 affiliate
Cooperatives
Pros:
• Helped new cooperatives by holding the certs
(Organic & Fairtrade) & training managers
Cons:
• Take a significant premium & create cash flow problems
• Try to prevent their affiliate cooperatives from going independent
• Fairtrade….but not Direct Trade
24. Peace Kawomera Example
On the Market:
How Much Does the Farmer Make?
3.0K UG / lbs. ($1.17)
To Gumutindo: 3.8K UG / lbs. ($1.49)
Direct to Coexist: 4.5K UG / lbs. ($1.76)
(2013 Organic Prices)
