The really interesting stuff — for me, at least — at the fair trade event yesterday came AFTER the main talk. (Jean and me at World Cafe, right)
In the Q and A, a discussion about the fair trade minimum prices for coffee — and how long it has stayed at $1.26 — came up. (No, it wasn’t me who asked the Q)
And Pascual Ataulfo Moreno (left) — the speaker for the event from the coffee cooperative CESMACH (PDF) in Chiapas, Mexico — mentioned that a proposal’s being put forward to raise that minimum by 16 cents — a cent for each year that the minimum price has NOT gone up.
So — after the event — on the way to a bar with Jean and Pascual — I found out more.
Apparently, this 16-cent increase proposal’s being put forward by CLAC, the Latin American and Caribbean Network of Small Fair Trade Producers. Basically, the CLAC’s an association of Latin American and Caribbean democratic cooperatives of small producers.
And this group’s holding its Second General Assembly in the Dominican Republic, starting tomorrow. From what I can gather, this is when the 16-cent proposal will be formally presented.
Pascual says that he expects other stakeholders in the fair trade movement will submit different proposals, so lotsa negotiations’ll need to take place before a final new minimum price is decided upon…
Of course, some coffee companies have already voluntarily raised the minimum prices they pay; for ex, Cooperative Coffees pays $1.50 an lb to farmer co-ops….
I’d be interested in hearing what other coffee companies think about this proposal –
Update, 2/2/07: FLO decides not to raise minimum prices for fair trade certified coffee, but says they’ll implement new prices in October 2007 at the latest.
Siel, Thanks for keeping this item on people’s radar. Todd Caspersen, our Director of Purchasing,is attending the CLAC meeting in the DR, and so we might be able to shed more light on this after his return.
As for Equal Exchange I know the price we pay to co-ops is sometimes higher than the fair trade minimum and, of course, never below (but I don’t have the specifics.)
- We are very engaged with the CLAC in thinking about a more viable and sustainable pricing scheme that works for both the coffee farmer cooperatives and the dedicated Fair Trade importer. Considerations here include:
o The lack of an increase in the Fair Trade Certified minimum for so many years & the increase costs incurred by farmers and their co-ops
o The in-country distortions that happen when the world price hits certain levels (eg how high market prices pose special problems for farmer co-ops, often due to their limited access to credit)
o The role of quality
o The timing of pre-harvest finance
o The prospect of multi-year contracts and pre-finance that corresponds to that.
What’s good and mature in these discussions between Equal Exchange and our farmer partners (which go back to our 20 year Summit this Summer when dozens of farmer co-op leaders meet with us here to talk about these and other issues, and before) is that the farmer co-op leaders want to creatively solve this problem in a way that works for their strongest allies like us, Cooperative Coffees, and Twin Trading (a strong Fair Trade importer in the UK). The process we’re involved is attempting to get us closer to a comprehensive solution.
Comment by Rodney North — October 26, 2006 @ 7:35 am