[The whole Certification Challenges series is here.]
As most fair trade activists know, the minimum price paid for an lb of fair trade coffee hasn’t changed for many, many years, despite inflation. It’s been $1.26 per lb of conventional green beans (technically $1.21, plus $.05 social premium), plus an extra $.15 an lb for organic beans.
And actually, this wasn’t a problem for a long time. Sez Dean of Dean’s Beans — the unchanging price wasn’t a big deal for a while, cuz the US dollar was doing nicely. Though the dollar price didn’t go up, farmers got more money from the strong dollar exchange rates.
But that’s changed. The dollar’s gotten weaker of late, and fair trade farmers are having a rough time.
Which is why this price issue’s been getting a lotta attention. Pretty much all the fair trade committed companies I’ve talked to, including Dean’s Beans and Equal Exchange, feel the fair trade minimum prices for coffee need to be raised.
In fact, some companies, like the ones belonging to Cooperative Coffees, have done their own price raising to deal with this issue in the meantime. They were already paying a minimum of $1.50 an lb for organic coffee; beginning this fall, they’re paying $1.56 an lb.
TransFair USA, the nonprofit that offers fair trade certification for US company coffees, has started to address this issue publicly — so far, with a Q&A on their relatively new FAQ. Unfortunately, TFUSA’s answer doesn’t actually illuminate WHY the fair trade minimum price hasn’t been changed in so many years. However, TFUSA makes it clear that it’s an issue that’s gonna be addressed.
In fact, FLO, the international body that certifies fair trade farms, “will be starting a multi-stakeholder review of the coffee minimum price at the end of 2006 to determine if there is consensus as to whether the price should be changed, and if so, how.”
Meaning that by December this year, we’ll hopefully see movement on this issue.
As for the question of whether different countries should have different fair trade minimums — Well, that’s a much more complicated question, to be addressed in a soon-to-come post –
Update, 1/24/06: FLO decides to do a formal review of the fair trade minimum price for coffee.
“Pretty much all the fair trade committed companies I’ve talked to, including Dean’s Beans and Equal Exchange, feel the fair trade minimum prices for coffee need to be raised.”
So is Equal Exchange then paying higher than the fair trade minimum price on the coffee they import? What companies are?
Comment by James — October 10, 2006 @ 4:53 pm
Hi James — Equal Exchange is still 100% fair trade certified, so they’re definitely paying fair trade minimums or higher. As for what companies ARE paying higher prices — All of Cooperative Coffees have agreed to a minimum of $1.50 per lb. Intelligentsia and Groundwork have said that they’re paying above the fair trade minimum for all their coffees; both companies are working on a web redesign to put all their financials up the web soon.
Those’re the ones I know of — There may be more, but I don’t know about them. The key thing to watch out for is that the sum that a company reports is the sum going to the co-op. For ex, Starbucks will brag about the money it pays for its coffee — but this is the price that Starbucks pays NOT to the co-ops, but to the middlemen who mediate between Starbucks and coffee farmers.
Comment by Siel — October 13, 2006 @ 7:46 pm