What “Fair Trade” coffee means and why it matters
Coffee Talk
The small coffee shop Mike Brown bought in 2008 was known for being the only place in Saratoga Springs, New York, that served Fair Trade coffees and teas.
Brown, who went on to found Death Wish Coffee, admits he wasn’t sure what “Fair Trade” meant at the time. What he did know was that his customers said it was important to them—so he continued serving what worked and started reading up on exactly what it meant.
What he learned inspired him. Brown continued using only Fair Trade beans when he launched Death Wish in 2012, and he’s never looked back.
His main takeaway: Farmers earn more money per pound of coffee, and that money can mean the difference between living in poverty and being able to afford food, shelter and other necessities.
“I can put myself in the farmers’ shoes,” Brown said. “If I’m working my ass off, I want to make sure I get paid a fair wage. That resonates with me. Everyone should get paid a living wage.”
If you know Fair Trade is supposed to be good but don't really understand why, you’re not alone. We’re here to demystify it for you.
What is Fair Trade coffee?
The difference between Fair Trade coffee and conventional is kind of like the difference between a grass-fed burger from your favorite farm-to-table restaurant and a Big Mac. Yes, you have to pay a little more for it. But doing so gives you a far better sense of where the product came from and how it was produced.
Fair Trade USA, the certifying body Death Wish works with, defines Fair Trade as “a global movement made up of a diverse network of producers, companies, shoppers, advocates and organizations putting people and planet first.”
It’d be hard for the traditional coffee trade model to make the same claim.
Why? For starters, under the traditional system, 85 percent of the world’s coffee farmers live at or below the poverty level.
Small farmers grow 70 to 80 percent of the global coffee supply, but as individuals, they have little power to negotiate prices with large coffee conglomerates. Workers on large plantations are often paid below minimum wage.
The Fair Trade model for coffee mandates fair wages, reasonable hours and sustainable production methods. In practice, this means Fair Trade farmers make enough to at least meet their families’ basic needs and work no more than the maximum number of hours allowed by their country’s government—two things that are far from guaranteed on conventional farms.
How are coffee farmers treated under Fair Trade guidelines?
First of all, farmers earn a higher minimum price for their coffee beans than conventional growers do—right now, about 30 cents per pound more (and 60 cents per pound more if the coffee is also organic, as Death Wish Coffee’s beans are).
Farmers are also better protected both at work and outside it. Fair Trade USA’s agricultural production standards include:
- Safe working conditions
- No discrimination
- No forced labor
- No child labor
- No hazardous pesticide use
- Wages that meet or exceed national minimums
- Benefits (including health care and leave benefits) that meet or exceed national minimums
According to Katie Schneider, public relations consultant for Fair Trade USA, “The vast majority of Fair Trade coffee farmers are small farmers that are part of cooperatives.” She adds that these farmers reap the benefits “of being in a cooperative, like discounted farming supplies [and] help transporting and processing their harvest, and they are better able to negotiate prices.”
Fair Trade USA also charges its sellers an additional 20 cents per pound, billed after the fact, to go into a community development fund to be invested by its cooperatives into local projects like schools, medical clinics, computer labs and playgrounds, according to Schneider.
What do you have to do to earn a Fair Trade certification?
Independent bodies, like Fair Trade USA, monitor and certify producers to ensure they’re meeting Fair Trade standards.
The process for becoming certified is different for coffee producers than it is for roasters or sellers.
A production enterprise must apply and meet certain standards (such as the bullet points listed above); a trade enterprise must register and then source its materials from Fair Trade USA’s certified suppliers.
The Fair Trade market has grown tremendously in the last 20 years. When Fair Trade USA’s coffee program launched in 1998, its partners imported 76,059 pounds of Fair Trade coffee per year. By 2018, that number had grown to 175,892,965 pounds—about 2,300 times more.
What are the other benefits of Fair Trade?
Buying Fair Trade coffee isn’t better only for the people who grow it—it’s better for the planet, too.
One big example involves deforestation: Climate change has rendered some previous coffee-growing hotspots inhospitable, and some producers have responded by moving to higher elevations and razing the forests there.
It’s a vicious cycle: Less forest means fewer trees to capture climate-changing carbon dioxide.
Farmers certified by Fair Trade USA are required to refrain from deforestation. Other environmental sustainability requirements include using water efficiently, employing techniques to minimize pesticide use, and protecting the biodiversity of the land.
Fair Trade can also make for a better cup of coffee, Schneider adds. For example, some producers have used portions of their community development funds to hire experts (scientists, tasters) and train farmers in order to improve the quality of their product.
And she says, “When farmers are earning more for their beans (and even seeing quality bonuses), they take greater pride in their work and are motivated to grow the best possible coffee.”
How does Fair Trade affect coffee prices?
“For producers who aren’t part of the Fair Trade system, the price they sell their coffee for is based on the New York Stock Exchange, which for much of last year was below $1 per pound,” Schneider says. “[Going up to] $1.40 or $1.70 may not sound like much, but it allows Fair Trade producers to invest in their farms and communities and plan for the future because they know they will be receiving at least the Fair Trade minimum price.”
This difference between the conventional market price and the Fair Trade price is called the “Fair Trade premium,” and it’s only one part of the Fair Trade system. Brown said that after buying the beans, Fair Trade USA bills him the additional 20 cents per pound to go into development funds for the communities providing Death Wish Coffee with its beans.
In the end, Brown said he ends up paying about double the price he’d pay for conventional beans—and he doesn't even think most of the company’s current customers are aware of its Fair Trade certification: “If you asked someone, I’m not sure they would know.”
But for him, it’s worth the extra cost to guarantee a great product that’s also great for the folks producing it—especially since Brown has seen firsthand what Fair Trade means to farmers.
Two years ago, Brown visited Peru with Fair Trade USA. He recalls climbing a dirt road for more than a mile to reach a farmer’s home and noticing the steep terrain where the coffee trees grew.
“Some people on this trip barely made it to the farmer's house on the top of the mountain because it was so long and steep,” Brown said. “Getting bags of beans down the mountain is very difficult, and that wasn't lost on me. Also, I couldn't imagine picking the coffee on those steep hills with giant sacks to collect the beans.”
At the top, his group met the farmer and his family, who were preparing dinner at the time. They welcomed their visitors—who arrived hours later than they were supposed to after navigational and scheduling issues—and offered them their food.
“They were happy to see us because they knew we were the ones who bought their coffee,” Brown says. “I like paying a little bit more for our coffee if it supports people like that.”
[All photos courtesy of Fair Trade]