It Tastes Bitter But I Feel Good About Drinking It
August 7, 2011 5:00 AM Subscribe
Is your cup of fair trade coffee tasting a little funky this morning? This might be why. "Fair Trade-certified coffee is growing in consumer familiarity and sales, but strict certification requirements are resulting in uneven economic advantages for coffee growers and lower quality coffee for consumers. By failing to address these problems, industry confidence
in Fair Trade coffee is slipping."
I heard that "Fair Trade" locks suppliers into an only slightly higher price above what they would be getting otherwise- they aren't allowed to charge more. My information might be faulty, however.
posted by dunkadunc at 5:31 AM on August 7, 2011
posted by dunkadunc at 5:31 AM on August 7, 2011
This is no news in coffee geek circles. They've long complained that really good coffee commands a price well in excess of what Fair Trade Certified stuff fetches, and that the way to improve conditions for coffee growers is to help them to improve the quality of what they're producing, not by imposing an artificial subsidy paid only by liberals.
posted by PeterMcDermott at 5:40 AM on August 7, 2011 [6 favorites]
posted by PeterMcDermott at 5:40 AM on August 7, 2011 [6 favorites]
The HTML version of the fourth link has some interesting comments.
Not just interesting comments, but I'd say necessary reading to be fully informed about these issues.
posted by hippybear at 5:43 AM on August 7, 2011
Not just interesting comments, but I'd say necessary reading to be fully informed about these issues.
posted by hippybear at 5:43 AM on August 7, 2011
I heard that "Fair Trade" locks suppliers into an only slightly higher price above what they would be getting otherwise
One of the comments on the HTML version states otherwise, though I haven't verified yet:
The author misses the fundamental point that the Fairtrade standards are clear that farmers should either receive the Fairtrade minimum price OR the market price, WHICHEVER IS HIGHER. When market prices are higher than the Fairtrade minimum price, the farmers should receive the market price for their Fairtrade crops. The Fairtrade minimum price acts as a safety net for when prices are low, and a mechanism to reduce price volatility.
posted by sriracha at 5:45 AM on August 7, 2011 [3 favorites]
One of the comments on the HTML version states otherwise, though I haven't verified yet:
The author misses the fundamental point that the Fairtrade standards are clear that farmers should either receive the Fairtrade minimum price OR the market price, WHICHEVER IS HIGHER. When market prices are higher than the Fairtrade minimum price, the farmers should receive the market price for their Fairtrade crops. The Fairtrade minimum price acts as a safety net for when prices are low, and a mechanism to reduce price volatility.
posted by sriracha at 5:45 AM on August 7, 2011 [3 favorites]
...the way to improve conditions for coffee growers is to help them to improve the quality of what they're producing, not by imposing an artificial subsidy paid only by liberals.
I don't know anything about Fair Trade coffee, but in general I'm pretty suspicious of arguments claiming that Magical Free Market Forces will end up helping poor people.
posted by DU at 6:12 AM on August 7, 2011 [22 favorites]
I don't know anything about Fair Trade coffee, but in general I'm pretty suspicious of arguments claiming that Magical Free Market Forces will end up helping poor people.
posted by DU at 6:12 AM on August 7, 2011 [22 favorites]
This article will examine why, over the past 20 years, Fair Trade coffee has evolved from an economic and social justice movement to largely a marketing model for ethical consumerism...
Well, to be fair, their mission statement is:
posted by ennui.bz at 6:38 AM on August 7, 2011
Well, to be fair, their mission statement is:
use a market-based approach that empowers...If you are trying to build an "ethical consumer" market, it's not surprising that you end up with one. I'm never sure how much "third-wayism' is naivety or simply marketeering anyway, I guess. Even in the best case scenario, where "Fair Trade" forms a genuine cartel (instead of a niche-market marketing group), you'd have a situation where the power of the cartel dwarfs the power of individual members (small farms). Self-interest is king, when the system is built around self-interest i.e. "the market."
posted by ennui.bz at 6:38 AM on August 7, 2011
According to a Canadian journalist who works with coffee producers, fair-trade actually rewards the richest farmers at the expense of the poorer ones.
posted by shii at 6:40 AM on August 7, 2011
posted by shii at 6:40 AM on August 7, 2011
They've long complained that really good coffee commands a price well in excess of what Fair Trade Certified stuff fetches, and that the way to improve conditions for coffee growers is to help them to improve the quality of what they're producing, not by imposing an artificial subsidy paid only by liberals.Does that assume that most consumers are willing to pay a premium for delicious coffee, though? I don't think they are. I don't think the percentage of consumers who value high-quality coffee is much higher than the percentage who are willing to pay a premium for fair trade.
posted by craichead at 7:35 AM on August 7, 2011 [1 favorite]
Who is the middle man in the Fair Trade market? I pay nine dollars per pound, while the farmer gets only $1.45. Is roasting and shipping adding that much?
posted by francesca too at 7:51 AM on August 7, 2011
posted by francesca too at 7:51 AM on August 7, 2011
Fair Trade pays $1.55 per lb. for Antonio's organic coffee, almost 10% more than the market price. But Antonio is left with only 50¢ per lb. after paying Fair Trade cooperative fees, government taxes and farming expenses. By year's end, he says, from the few thousand pounds he grows, he'll pocket about $1,000 — around half the meager minimum wage in Guatemala — or $2.75 a day, not enough for Starbucks' cheapest latte.
How much are Fair Trade "cooperative" fees? How can Fair Trade to pay 10% market premium and then claw some (or all) of this in cooperative fees? That's a nice business model for Fair Trade bureaucrats, but not so much for the farmers.
posted by three blind mice at 7:55 AM on August 7, 2011 [1 favorite]
How much are Fair Trade "cooperative" fees? How can Fair Trade to pay 10% market premium and then claw some (or all) of this in cooperative fees? That's a nice business model for Fair Trade bureaucrats, but not so much for the farmers.
posted by three blind mice at 7:55 AM on August 7, 2011 [1 favorite]
They've long complained that really good coffee commands a price well in excess of what Fair Trade Certified stuff fetches, and that the way to improve conditions for coffee growers is to help them to improve the quality of what they're producing, not by imposing an artificial subsidy paid only by liberals.
My understanding -- and it's only that -- is that Fair Trade is intended to help what I'll call commodity coffee growers, rather than specialty coffee growers. If you are already able to differentiate yourself in the market in a way that commands a price premium, you are in better shape than many. I understand Fair Trade to be a way to ensure that those who aren't able to so differentiate their products still make some kind of a living wage.
I don't know much about how it's implemented, though, to be honest.
posted by gauche at 7:57 AM on August 7, 2011
My understanding -- and it's only that -- is that Fair Trade is intended to help what I'll call commodity coffee growers, rather than specialty coffee growers. If you are already able to differentiate yourself in the market in a way that commands a price premium, you are in better shape than many. I understand Fair Trade to be a way to ensure that those who aren't able to so differentiate their products still make some kind of a living wage.
I don't know much about how it's implemented, though, to be honest.
posted by gauche at 7:57 AM on August 7, 2011
From the article: Brazil, conversely, pursued free-market reforms and the farmers have mechanised. This has enabled five people and a machine to enjoy the same output as 500 unaided farmers.
How is this an improvement? Before, 500 people had jobs. Now, 5 people do.
posted by Deathalicious at 8:06 AM on August 7, 2011 [4 favorites]
How is this an improvement? Before, 500 people had jobs. Now, 5 people do.
posted by Deathalicious at 8:06 AM on August 7, 2011 [4 favorites]
How is this an improvement? Before, 500 people had jobs. Now, 5 people do.
Gee, life sure was better when everyone had to be employed in the agricultural sector!
posted by grobstein at 8:24 AM on August 7, 2011 [11 favorites]
Gee, life sure was better when everyone had to be employed in the agricultural sector!
posted by grobstein at 8:24 AM on August 7, 2011 [11 favorites]
How much are Fair Trade "cooperative" fees? How can Fair Trade to pay 10% market premium and then claw some (or all) of this in cooperative fees? That's a nice business model for Fair Trade bureaucrats, but not so much for the farmers.
Yes it's a good reason not to buy "fair trade."
posted by grobstein at 8:25 AM on August 7, 2011
Yes it's a good reason not to buy "fair trade."
posted by grobstein at 8:25 AM on August 7, 2011
From the links it looks like about a decade ago Fair Trade was paying a much higher premium in some markets. So, as the premium for Fair Trade has decreased (due to general rising costs and demand) a couple things appear to have happened:
1. Price inversions for some farmers who sell their best product at higher than Fair Trade and their lesser beans at the floor rate.
2. Decreased economic benefit for those who only sell Fair Trade and then have to pay fees to stay in the program.
3. Increased ability for first world coffee roasters to buy and market Fair Trade coffee without significant pricing challenges.
While it isn't a perfect system, I'm not convinced any of these effects is a complete condemnation of the program. As noted in the comments on the fourth link, a major component of the program is an attempt to keep the means and benefits of the work in the hands of the farmers. Now, you can argue that the co-operative model they have pushed is too much one-size-fits all, but I'm not convinced it is all necessarily bad either.
I'd be interested in seeing proposals for reliable methods of improving these folks lives through different means.
posted by meinvt at 8:36 AM on August 7, 2011 [2 favorites]
1. Price inversions for some farmers who sell their best product at higher than Fair Trade and their lesser beans at the floor rate.
2. Decreased economic benefit for those who only sell Fair Trade and then have to pay fees to stay in the program.
3. Increased ability for first world coffee roasters to buy and market Fair Trade coffee without significant pricing challenges.
While it isn't a perfect system, I'm not convinced any of these effects is a complete condemnation of the program. As noted in the comments on the fourth link, a major component of the program is an attempt to keep the means and benefits of the work in the hands of the farmers. Now, you can argue that the co-operative model they have pushed is too much one-size-fits all, but I'm not convinced it is all necessarily bad either.
I'd be interested in seeing proposals for reliable methods of improving these folks lives through different means.
posted by meinvt at 8:36 AM on August 7, 2011 [2 favorites]
How much of the coffee market is individuals who buy coffee to make at home, versus store brewed coffee or instant? I was under the impression that Starbucks, Nescafe, etc, are the real drivers for market price reform in the coffee biz. Anyone know the percentage of the market those big boys command?
posted by rh at 8:45 AM on August 7, 2011
posted by rh at 8:45 AM on August 7, 2011
Who is the middle man in the Fair Trade market? I pay nine dollars per pound, while the farmer gets only $1.45. Is roasting and shipping adding that much?
Yes. Unless your beans are roasted in their origin country, then you're paying a Western corporation to roast your beans. Starbucks, for instance, has all of their beans roasted locally. And we don't even have to get into the cost of shipping, because we all know how astronomical that is.
Fair Trade is beneficial in countries with volatile or rebel government entities that often will over-regulate or even steal proceeds from the coffee farmers. Ethiopia is a good example of this. But it's certainly not a catch-all, and there's a lot of red tape to work through.
Starbucks has a system in place, called C.A.F.E. (Coffee and Farmer Equity) that does much more for farmers than simply attaining a Fair Trade label. Many uninformed coffee drinkers like to drag Starbucks through the dirt "because they only have one type of Fair Trade coffee," while in truth, Starbucks is paying farmers more for all the coffee they buy despite the label -- because of the red tape and bureaucracy involved in attaining and keeping the label of "Fair Trade" is often too much work and ultimately not beneficial enough to the company or the coffee farmers. And even despite this, Starbucks does buy more Fair Trade coffee than any other company in the world, even though it only constitutes one of their 15 or 16 core roasts (Cafe Estima Blend).
Now I'm not about to claim that Starbucks is a saint in all aspects of corporate juggernautdom, but they're doing a lot better by coffee farmers than many people would give them credit for.
posted by erstwhile at 8:58 AM on August 7, 2011 [2 favorites]
Yes. Unless your beans are roasted in their origin country, then you're paying a Western corporation to roast your beans. Starbucks, for instance, has all of their beans roasted locally. And we don't even have to get into the cost of shipping, because we all know how astronomical that is.
Fair Trade is beneficial in countries with volatile or rebel government entities that often will over-regulate or even steal proceeds from the coffee farmers. Ethiopia is a good example of this. But it's certainly not a catch-all, and there's a lot of red tape to work through.
Starbucks has a system in place, called C.A.F.E. (Coffee and Farmer Equity) that does much more for farmers than simply attaining a Fair Trade label. Many uninformed coffee drinkers like to drag Starbucks through the dirt "because they only have one type of Fair Trade coffee," while in truth, Starbucks is paying farmers more for all the coffee they buy despite the label -- because of the red tape and bureaucracy involved in attaining and keeping the label of "Fair Trade" is often too much work and ultimately not beneficial enough to the company or the coffee farmers. And even despite this, Starbucks does buy more Fair Trade coffee than any other company in the world, even though it only constitutes one of their 15 or 16 core roasts (Cafe Estima Blend).
Now I'm not about to claim that Starbucks is a saint in all aspects of corporate juggernautdom, but they're doing a lot better by coffee farmers than many people would give them credit for.
posted by erstwhile at 8:58 AM on August 7, 2011 [2 favorites]
Substantive claims:
1. Growers not rewarded for quality, so they offload higher quality beans on the free market and dump lower quality into the Fairtrade pool
2. Too much overhead cost involved with becoming Fairtrade certified; gives affluent farmers an advantage
The rest appears to be laissez-faire grar:
✓ Fairtrade forces cooperatives, which are always bad because elected leaders are sometimes not very good! John Galt would strike out on his own to be more efficient.
✓ Quote from Adam Smith Institute guy who (shockingly!) is against anything that impedes the invisible hand
✓ Local government is stifling and corrupt. What does that have to do with Fairtrade?
✓ Farmers should mechanize to reduce costs! Why exactly does Fairtrade preclude this?
✓ Value-added stages like roasting, packaging, and branding should move out of Europe and the US and into the countries that grow the coffee. A good argument for lowering the consumer price of coffee, but why exactly would this help growers and what does it have to do with Fairtrade?
posted by qxntpqbbbqxl at 9:09 AM on August 7, 2011 [9 favorites]
1. Growers not rewarded for quality, so they offload higher quality beans on the free market and dump lower quality into the Fairtrade pool
2. Too much overhead cost involved with becoming Fairtrade certified; gives affluent farmers an advantage
The rest appears to be laissez-faire grar:
✓ Fairtrade forces cooperatives, which are always bad because elected leaders are sometimes not very good! John Galt would strike out on his own to be more efficient.
✓ Quote from Adam Smith Institute guy who (shockingly!) is against anything that impedes the invisible hand
✓ Local government is stifling and corrupt. What does that have to do with Fairtrade?
✓ Farmers should mechanize to reduce costs! Why exactly does Fairtrade preclude this?
✓ Value-added stages like roasting, packaging, and branding should move out of Europe and the US and into the countries that grow the coffee. A good argument for lowering the consumer price of coffee, but why exactly would this help growers and what does it have to do with Fairtrade?
posted by qxntpqbbbqxl at 9:09 AM on August 7, 2011 [9 favorites]
I had noticed that the quality of the Fair Trade beans themselves had dropped off dramatically in the last year or so, to the point where I am buying locally roasted beans of dubious provenance instead. Coffee is basically the only foodstuff I find myself reallys serious about - I'll happily drink a five buck wine, I eat Qorn and my cheeses occasionally reach me in the form of zoo animals - but coffee, well, it keeps me alive, and I notice when things taste foul. The mention of poorer quality means is only passing there, but am I alone in having noticed that?
posted by Jilder at 9:12 AM on August 7, 2011
posted by Jilder at 9:12 AM on August 7, 2011
The Fair Trade movement strikes me as similar to the folks selling carbon offsets. Well intentioned but opaque. I get that I'm paying extra for "social justice", but how effective is the money I'm spending at actually achieving that social justice? Do the companies collecting the middleman fees have any accountability?
posted by Nelson at 9:17 AM on August 7, 2011 [1 favorite]
posted by Nelson at 9:17 AM on August 7, 2011 [1 favorite]
Unfortunately places like Starbucks and Nescafe (along with all the other big boys) aren't as influential when it comes to pricing as one might think. Coffee pricing is determined largely by coffee futures bought and sold on the C Market. A really good explanation of what has been going on in that market, and why coffee prices are so high can be found over through Royals website.
Basically, with the collapse of some other markets out there, certain groups have been flocking to the Commodities market to make some coin buying and selling contracts. This has had the unintended side effect of almost doubling the price of fresh, unroasted coffee from origin in the last year. It's starting to come back down, but the real tragedy is that while the end consumer is paying a load more, (and so is your coffee roaster whoever that may be, big or small) and the BROKERS make a ton of money off the sale of that coffee, the OWNERS of the farm make a little bit more money, if they are educated and aware of the markets (many are not). The actual pickers and laborers that touched each coffee bean you drink? They're not making any more money in the conventional coffee market.
I've worked in the coffee industry for a long time on the wholesale and roasting side, and the best programs I've seen for keeping the pickers are Direct Trade relationships. There's no governing body for what a 'direct-trade' relationship is like there is for 'fair-trade', and it's kind of a buzzword, so you need to be careful about it. One farm we deal with through my current employer, just got done building a school (fully staffed!) for their migrant workers' children. We know that the higher price we pay for that particular coffee goes to some really responsible people, who take care of their workers (very much like we take care of our workers). So we do business with them. And increased out business with them over the past few years, because they've demonstrated their ability to take care of the poorest people that work for them. Fair trade does this on a Cooperative level, like buying a region a couple schools or housing for migrant workers in certain locales. It's oftentimes scattershot and not too focused into specific farms that may need it the most.
The largest problem with this is that it's incredibly difficult to police and really get to know. We know because we've spent some money checking out their farm. Boots on the ground, talking with their coffee pickers. Not everyone does this, and there are a couple specialty coffee roasters out there who are very dishonest about their direct-trade practices.
Fair Trade and Organic certifications do not mean a whole lot in the coffee world, especially when it comes to quality. If you are really invested in your coffee, you should have a conversation with your local roaster...there are tons of them out there, and they should be able to tell you where the coffee comes from, and who their buying coffee from if they tout having a direct trade relationship with a farmer.
posted by furnace.heart at 9:18 AM on August 7, 2011 [19 favorites]
Basically, with the collapse of some other markets out there, certain groups have been flocking to the Commodities market to make some coin buying and selling contracts. This has had the unintended side effect of almost doubling the price of fresh, unroasted coffee from origin in the last year. It's starting to come back down, but the real tragedy is that while the end consumer is paying a load more, (and so is your coffee roaster whoever that may be, big or small) and the BROKERS make a ton of money off the sale of that coffee, the OWNERS of the farm make a little bit more money, if they are educated and aware of the markets (many are not). The actual pickers and laborers that touched each coffee bean you drink? They're not making any more money in the conventional coffee market.
I've worked in the coffee industry for a long time on the wholesale and roasting side, and the best programs I've seen for keeping the pickers are Direct Trade relationships. There's no governing body for what a 'direct-trade' relationship is like there is for 'fair-trade', and it's kind of a buzzword, so you need to be careful about it. One farm we deal with through my current employer, just got done building a school (fully staffed!) for their migrant workers' children. We know that the higher price we pay for that particular coffee goes to some really responsible people, who take care of their workers (very much like we take care of our workers). So we do business with them. And increased out business with them over the past few years, because they've demonstrated their ability to take care of the poorest people that work for them. Fair trade does this on a Cooperative level, like buying a region a couple schools or housing for migrant workers in certain locales. It's oftentimes scattershot and not too focused into specific farms that may need it the most.
The largest problem with this is that it's incredibly difficult to police and really get to know. We know because we've spent some money checking out their farm. Boots on the ground, talking with their coffee pickers. Not everyone does this, and there are a couple specialty coffee roasters out there who are very dishonest about their direct-trade practices.
Fair Trade and Organic certifications do not mean a whole lot in the coffee world, especially when it comes to quality. If you are really invested in your coffee, you should have a conversation with your local roaster...there are tons of them out there, and they should be able to tell you where the coffee comes from, and who their buying coffee from if they tout having a direct trade relationship with a farmer.
posted by furnace.heart at 9:18 AM on August 7, 2011 [19 favorites]
Gee, life sure was better when everyone had to be employed in the agricultural sector!
Actually, as I understand it, conditions for workers in the early industrial revolution were pretty horrific. It was only the tireless work of unions and the imposition of government regulations that ensured that workers had livable conditions. If that hadn't happened, I'm sure that working in manufacturing and services would have been as bad or worse than working in agriculture.
So yeah, so long as there are safe jobs waiting for those 495 people who no longer have work, I'm all for it. If that's not the case, then as I said I don't see it as an improvement.
posted by Deathalicious at 9:25 AM on August 7, 2011 [2 favorites]
Actually, as I understand it, conditions for workers in the early industrial revolution were pretty horrific. It was only the tireless work of unions and the imposition of government regulations that ensured that workers had livable conditions. If that hadn't happened, I'm sure that working in manufacturing and services would have been as bad or worse than working in agriculture.
So yeah, so long as there are safe jobs waiting for those 495 people who no longer have work, I'm all for it. If that's not the case, then as I said I don't see it as an improvement.
posted by Deathalicious at 9:25 AM on August 7, 2011 [2 favorites]
Value-added stages like roasting, packaging, and branding should move out of Europe and the US and into the countries that grow the coffee. A good argument for lowering the consumer price of coffee, but why exactly would this help growers and what does it have to do with Fairtrade?
Actually, this point is pretty important. So long as developing countries supply only the raw material, they'll be unable to extract the most value from their product. As people have noted, the coffee you buy in the store is in the $9/lb range whereas the raw coffee beans the farmer sells is closer to a buck-fifty. If they can move these value-added stages to the country, that's a an increase of overall wealth to the country and, hopefully, that wealth gets distributed. That's not at all possible if all of the real profit from coffee takes place in Europe.
Also, I think the hope is that, say, a grower's collective would roast the coffee and sell it, redistributing the profit back to the farmers. I *suspect* this is sort of what goes on for something like Florida's Natural Orange Juice, which is based around a co-op of orange farmers.
posted by Deathalicious at 9:30 AM on August 7, 2011
Actually, this point is pretty important. So long as developing countries supply only the raw material, they'll be unable to extract the most value from their product. As people have noted, the coffee you buy in the store is in the $9/lb range whereas the raw coffee beans the farmer sells is closer to a buck-fifty. If they can move these value-added stages to the country, that's a an increase of overall wealth to the country and, hopefully, that wealth gets distributed. That's not at all possible if all of the real profit from coffee takes place in Europe.
Also, I think the hope is that, say, a grower's collective would roast the coffee and sell it, redistributing the profit back to the farmers. I *suspect* this is sort of what goes on for something like Florida's Natural Orange Juice, which is based around a co-op of orange farmers.
posted by Deathalicious at 9:30 AM on August 7, 2011
Gee, life sure was better when everyone had to be employed in the agricultural sector!
Wouldn't it be more like, "Gee, life sure was better than 500 of us had a job and income instead of 5 of us!"?
posted by hippybear at 9:45 AM on August 7, 2011 [1 favorite]
Wouldn't it be more like, "Gee, life sure was better than 500 of us had a job and income instead of 5 of us!"?
posted by hippybear at 9:45 AM on August 7, 2011 [1 favorite]
Sheesh, luddites.
posted by Bovine Love at 9:51 AM on August 7, 2011 [1 favorite]
posted by Bovine Love at 9:51 AM on August 7, 2011 [1 favorite]
I don't know anything about Fair Trade coffee, but in general I'm pretty suspicious of arguments claiming that Magical Free Market Forces will end up helping poor people.
It's one thing to claim that we should return to a 100% free market. It's quite another to claim that the current set of regulations is reducing competition, lowering the quality of the output product, and is not even being particularly effective at its stated goal of social justice.
This seems to be one of those cases where we don't need less regulation -- we need better regulation. Unfortunately, the volume of the more/less regulation debate seems to drown out any discussion of the actual policies being implemented.
Personally, I'd argue that the economics of price fixing and controls are fairly well-understood, and are unsustainable for any market in the long-run. We may need to turn to other instruments in our quest to achieve "fair trade," given that the current tactics seem increasingly ineffective and arbitrary.
The free market is no panacea, but self-sustaining markets that are competitive and produce high-quality goods are going to be vital for social and economic improvement in the third world.
posted by schmod at 9:55 AM on August 7, 2011 [2 favorites]
It's one thing to claim that we should return to a 100% free market. It's quite another to claim that the current set of regulations is reducing competition, lowering the quality of the output product, and is not even being particularly effective at its stated goal of social justice.
This seems to be one of those cases where we don't need less regulation -- we need better regulation. Unfortunately, the volume of the more/less regulation debate seems to drown out any discussion of the actual policies being implemented.
Personally, I'd argue that the economics of price fixing and controls are fairly well-understood, and are unsustainable for any market in the long-run. We may need to turn to other instruments in our quest to achieve "fair trade," given that the current tactics seem increasingly ineffective and arbitrary.
The free market is no panacea, but self-sustaining markets that are competitive and produce high-quality goods are going to be vital for social and economic improvement in the third world.
posted by schmod at 9:55 AM on August 7, 2011 [2 favorites]
Who is the middle man in the Fair Trade market? I pay nine dollars per pound, while the farmer gets only $1.45. Is roasting and shipping adding that much?
it depends where you're getting your coffee. for your average small-to-medium specialty coffee (virtually all organic and fairtrade coffee falls under the specialty coffee umbrella) roasting company it works like this:
grower cooperative -> green coffee broker -> roaster -> retailer (optional) -> consumer
on preview: furnace.heart covered much of what i was going to say; lots of good info in his/her comment.
$1.45/lb (or whatever the current price is; i've been out of the industry for a few years now) may be the minimum price fairtrade growers receive; but due to shipping costs, brokerage cuts and the higher prices that many varietals command, roasters pay closer to $3-6/lb. Add in equipment, packaging, wages and the other costs of operating a retail shop and it's not exactly a super-high-margin business. selling coffee drinks helps a lot, though.
posted by jjoye at 10:12 AM on August 7, 2011
it depends where you're getting your coffee. for your average small-to-medium specialty coffee (virtually all organic and fairtrade coffee falls under the specialty coffee umbrella) roasting company it works like this:
grower cooperative -> green coffee broker -> roaster -> retailer (optional) -> consumer
on preview: furnace.heart covered much of what i was going to say; lots of good info in his/her comment.
$1.45/lb (or whatever the current price is; i've been out of the industry for a few years now) may be the minimum price fairtrade growers receive; but due to shipping costs, brokerage cuts and the higher prices that many varietals command, roasters pay closer to $3-6/lb. Add in equipment, packaging, wages and the other costs of operating a retail shop and it's not exactly a super-high-margin business. selling coffee drinks helps a lot, though.
posted by jjoye at 10:12 AM on August 7, 2011
also, i forgot to mention that green coffee decreases about 15% in weight during the roasting process due to moisture loss.
posted by jjoye at 10:14 AM on August 7, 2011
posted by jjoye at 10:14 AM on August 7, 2011
The telegraph article states:
posted by Hither at 10:14 AM on August 7, 2011 [2 favorites]
Shipping unroasted green beans to Europe causes them to deteriorate, so not only is Café Britt doing far more to promote economic development than Fairtrade rivals, it is also creating better tasting coffee.That goes against everything I've heard about coffee. If you believe wikipedia:
As green coffee is more stable than roasted, the roasting process tends to take place close to where it will be consumed. This reduces the time that roasted coffee spends in distribution, giving the consumer a longer shelf life.
The rule of thumb for coffee freshness is that green (unroasted) coffee beans will keep for two years, roasted beans for two weeks, and ground coffee for two hours. Home roasting has the advantage of being able to roast smaller volumes of coffee to match consumption so that the roasted coffee is used before it goes stale. Depending on the origin and method of storage, coffee flavor peaks from 24 hours to 7 days after roasting.[3]Also this:
Freshly roasted coffee is at its best about a day out of the roaster. If it is kept in an airtight container as whole, unground beans, it can remain splendid if ground and brewed in a week to ten days. But by three weeks out of the roaster, if not frozen or preserved in special packaging, even whole bean coffee is well on its way to listless mediocrity.Growers probably can benefit economically from roasting coffee, but it wouldn't create "better tasting coffee."
posted by Hither at 10:14 AM on August 7, 2011 [2 favorites]
oh, and one more thing: thinking of roasting companies as middlemen in the coffee business makes about as much sense as does thinking of, say, brewmasters as middlemen in the beer industry; which is to say, none at all.
starting with quality beans is essential; analyzing inherent flavor profiles (which, by the way, can vary significantly from year to year, much like wine grapes for example) and developing proper roasts and blends, no less so.
posted by jjoye at 11:43 AM on August 7, 2011
starting with quality beans is essential; analyzing inherent flavor profiles (which, by the way, can vary significantly from year to year, much like wine grapes for example) and developing proper roasts and blends, no less so.
posted by jjoye at 11:43 AM on August 7, 2011
I always assumed that I don't like fair trade coffee because it's missing that slight hint of the blood and sweat of child slave labor.
posted by knoyers at 1:17 PM on August 7, 2011
posted by knoyers at 1:17 PM on August 7, 2011
(and tears)
posted by knoyers at 1:20 PM on August 7, 2011 [1 favorite]
posted by knoyers at 1:20 PM on August 7, 2011 [1 favorite]
Here's what most of us use in the industry to track the C Market. Check out that multi-year graph to see how insane it's been this last year.
When you see that price, that is what shitty, shwaggy, nasty coffee is selling for. This is not specialty coffee. None of that is organic, none of it is Fair Trade, it is Yuban. It is Foldgers. It is gross. And that gross nasty stuff has increased almost 120% since a year and a half ago. Thank you so much commodity speculation!
THAT stuff costs about $2.50/lb these days (slowly returning to normal). When you buy a specialty contract for coffee, you typically add about $2-5 to that price. Your local roaster is buying coffee from between $3-7/lb. It's crazy.
But this is where those relationships come in handy. That same farm i'm talking about gave us a price BREAK this year, because we've been such good friends and customers over the years.
I agree with jjoye and Hither, a coffee roaster, regardless of size is very important for the roasting process. I have recently heard rumors of a couple large farms (we're talking Finca el Injerto level here...so like "Sunkist" or something like that) are attempting to set up roasting operations in the United States, and this move almost makes sense, but it's such a huge undertaking that only the largest farms and Cooperatives could even attempt it. Even then it would only be on the boutique level. It's a really, REALLY cool idea, but again, it's out of reach of 99% of the coffee farms and cooperatives out there.
As for a somewhat good solution, if you're worried about this whole fair-trade-direct-trade-omfg-coffee thing, you should seriously check out Counter Culture Coffee. I don't work for them at all, but they are the one and only coffee company that annually releases their financials, even though they're privately held. You can track dollar for dollar how much they spent on coffee and how much they charged you, and even how much money goes back to special development programs. As far as i am concerned, they are the MOST transparent coffee company ever, and their coffee is really good.
posted by furnace.heart at 1:25 PM on August 7, 2011 [5 favorites]
When you see that price, that is what shitty, shwaggy, nasty coffee is selling for. This is not specialty coffee. None of that is organic, none of it is Fair Trade, it is Yuban. It is Foldgers. It is gross. And that gross nasty stuff has increased almost 120% since a year and a half ago. Thank you so much commodity speculation!
THAT stuff costs about $2.50/lb these days (slowly returning to normal). When you buy a specialty contract for coffee, you typically add about $2-5 to that price. Your local roaster is buying coffee from between $3-7/lb. It's crazy.
But this is where those relationships come in handy. That same farm i'm talking about gave us a price BREAK this year, because we've been such good friends and customers over the years.
I agree with jjoye and Hither, a coffee roaster, regardless of size is very important for the roasting process. I have recently heard rumors of a couple large farms (we're talking Finca el Injerto level here...so like "Sunkist" or something like that) are attempting to set up roasting operations in the United States, and this move almost makes sense, but it's such a huge undertaking that only the largest farms and Cooperatives could even attempt it. Even then it would only be on the boutique level. It's a really, REALLY cool idea, but again, it's out of reach of 99% of the coffee farms and cooperatives out there.
As for a somewhat good solution, if you're worried about this whole fair-trade-direct-trade-omfg-coffee thing, you should seriously check out Counter Culture Coffee. I don't work for them at all, but they are the one and only coffee company that annually releases their financials, even though they're privately held. You can track dollar for dollar how much they spent on coffee and how much they charged you, and even how much money goes back to special development programs. As far as i am concerned, they are the MOST transparent coffee company ever, and their coffee is really good.
posted by furnace.heart at 1:25 PM on August 7, 2011 [5 favorites]
How is this an improvement? Before, 500 people had jobs. Now, 5 people do.
Eventually all - or nearly all - manufacturing, agricultural, transportation, construction, and low-end retail jobs will be performed by machines. Humans will be doing design, research, programming, medical, media and artisanal work as automation reduces production of goods down to pocket change.
That's pretty much the definition of progress: leaving the unpleasant labor necessary for human survival to the machines, and having people go off and do fun/interesting things for a living.
There are going to be a lot of transitional pains as there have been at every major shift throughout history. I'm curious as to whether you've been expecting something different?
posted by Ryvar at 2:20 PM on August 7, 2011 [1 favorite]
Eventually all - or nearly all - manufacturing, agricultural, transportation, construction, and low-end retail jobs will be performed by machines. Humans will be doing design, research, programming, medical, media and artisanal work as automation reduces production of goods down to pocket change.
That's pretty much the definition of progress: leaving the unpleasant labor necessary for human survival to the machines, and having people go off and do fun/interesting things for a living.
There are going to be a lot of transitional pains as there have been at every major shift throughout history. I'm curious as to whether you've been expecting something different?
posted by Ryvar at 2:20 PM on August 7, 2011 [1 favorite]
I don't see nine billion humans "... doing design, research, programming, medical, media and artisanal work" while machines do all the rest. And if only some fraction of humanity is required to do these jobs and tell the machines what to do, be sure that the other (probably significantly larger) fraction of humanity will be left out in the cold.
posted by dunkadunc at 4:22 PM on August 7, 2011 [1 favorite]
posted by dunkadunc at 4:22 PM on August 7, 2011 [1 favorite]
I'm actually sitting at the officina of a fair trade coffee farm this second. I walk here to steal wifi. I'm doing research on an insect pest in production & I've been living on farms all summer. I've been around a number of "organic" Central American coffee farms. They're all shade farms, which have coffee interspersed with trees rather than the huge sun farms with monoculture GM coffee baking in the direct light. All the farms I've been on are certified organic or have some similar distinction, but there is still a huge spread between the way coffee is managed. Some farms dump pesticide (great to be a scientist in the field when guys in hazmat suits walk by!); some farms have virtually no shade trees (which, I'm told, makes worse coffee). Some of the farms harvest coffee 4 times, grabbing only ripe berries off the bush. Others harvest twice, indifferently picking green and ripe berries. These things make enormous differences in coffee quality. As always, market forces push toward easier managed, pesticide heavy, few tree, green-picking megafarms. So yes, it seems that even with "fair trade" type distinction, large farms thrive.
I will say that at least where I am a small farmer CAN make a living off coffee. The small farmers I've met virtually never have any distinctions, but by well managing a relatively small area they make amazing coffee. One family in particular harvests 4 times, has enough of a polycilture not to necessitate pesticides, and roasts and sells it's own beans. They sell for a reasonable price, mostly to the community, and have little enough overhead that they do quite well. More than anything, I personally think it's the affiliations and exportations which ruin people; that's the kind of farming that biases toward conglomerations. When you're simply meeting the demands of a community, it's a quality race. People know the families and buy the stuff they like, so the skilled farmers win out. When you're trying to make it on an international scale, I think it's a quantity race. Most of the time, coffee from many farms is mixed into a blend, so it's literally the lowest denominator who dictates the quality. Why produce something high quality when it'll just get mixed with low quality product down the line? Best for your cafe to meet minimum acceptable standards, and have lots of it.
*Disclaimer: I study insects, not agriculture. This is what I've gleaned, but I'm not an expert. I don't know, for example, if fair trade actually mixes coffee (but I'd they do). Also, I know that organic should mean no pesticides, but it doesn't. Lots of farms get temporary exceptions, use new chemicals, etc. Also, in pest crises, arbitrators sometimes tacitly allow things to go down.
posted by Buckt at 6:41 PM on August 7, 2011 [6 favorites]
I will say that at least where I am a small farmer CAN make a living off coffee. The small farmers I've met virtually never have any distinctions, but by well managing a relatively small area they make amazing coffee. One family in particular harvests 4 times, has enough of a polycilture not to necessitate pesticides, and roasts and sells it's own beans. They sell for a reasonable price, mostly to the community, and have little enough overhead that they do quite well. More than anything, I personally think it's the affiliations and exportations which ruin people; that's the kind of farming that biases toward conglomerations. When you're simply meeting the demands of a community, it's a quality race. People know the families and buy the stuff they like, so the skilled farmers win out. When you're trying to make it on an international scale, I think it's a quantity race. Most of the time, coffee from many farms is mixed into a blend, so it's literally the lowest denominator who dictates the quality. Why produce something high quality when it'll just get mixed with low quality product down the line? Best for your cafe to meet minimum acceptable standards, and have lots of it.
*Disclaimer: I study insects, not agriculture. This is what I've gleaned, but I'm not an expert. I don't know, for example, if fair trade actually mixes coffee (but I'd they do). Also, I know that organic should mean no pesticides, but it doesn't. Lots of farms get temporary exceptions, use new chemicals, etc. Also, in pest crises, arbitrators sometimes tacitly allow things to go down.
posted by Buckt at 6:41 PM on August 7, 2011 [6 favorites]
My favorite roasters, New Harvest Coffee, are a small company in Rhode Island, and they sell Fair Trade coffee but also do something called < ahref="http://newharvestcoffee.com/sourcedirect">Source Direct.
They say many of the same things as Buckt: FT stuff is often lowest-common denominator. They take it upon themselves to visit a few of their growers each year. One place is a pretty high-end operation, while another is very simple and primitive. They are trying to help the latter group get modernized and more efficient: this way the grower and the local workers can make more money, and so that this good coffee will be around, too.
During earlier trips they posted pictures and remarks on their Facebook page. If anyone cares, I can dig up a link.
posted by wenestvedt at 8:01 AM on August 8, 2011
They say many of the same things as Buckt: FT stuff is often lowest-common denominator. They take it upon themselves to visit a few of their growers each year. One place is a pretty high-end operation, while another is very simple and primitive. They are trying to help the latter group get modernized and more efficient: this way the grower and the local workers can make more money, and so that this good coffee will be around, too.
During earlier trips they posted pictures and remarks on their Facebook page. If anyone cares, I can dig up a link.
posted by wenestvedt at 8:01 AM on August 8, 2011
Fair Trade pays $1.55 per lb. for Antonio's organic coffee, almost 10% more than the market price. But Antonio is left with only 50¢ per lb. after paying Fair Trade cooperative fees, government taxes and farming expenses. By year's end, he says, from the few thousand pounds he grows, he'll pocket about $1,000 — around half the meager minimum wage in Guatemala — or $2.75 a day, not enough for Starbucks' cheapest latte.
How much are Fair Trade "cooperative" fees? How can Fair Trade to pay 10% market premium and then claw some (or all) of this in cooperative fees? That's a nice business model for Fair Trade bureaucrats, but not so much for the farmers.
posted by three blind mice at 7:55 AM on August 7 [1 favorite +] [!]
Boldface added for emphasis.
posted by Hello, I'm David McGahan at 2:33 PM on August 8, 2011
How much are Fair Trade "cooperative" fees? How can Fair Trade to pay 10% market premium and then claw some (or all) of this in cooperative fees? That's a nice business model for Fair Trade bureaucrats, but not so much for the farmers.
posted by three blind mice at 7:55 AM on August 7 [1 favorite +] [!]
Boldface added for emphasis.
posted by Hello, I'm David McGahan at 2:33 PM on August 8, 2011
That's pretty much the definition of progress: leaving the unpleasant labor necessary for human survival to the machines, and having people go off and do fun/interesting things for a living.
Okay, so in your world, making shoes by hand is unpleasant and boring, whereas working minimum wage as a Panera cashier is exciting and wonderful?
I don't doubt that many, many horrible jobs have been replaced by machines. But it seems to me like there are plenty of horrible unpleasant jobs out there -- it's just that the drive for efficiency has led us to force fewer people to do more work in those jobs. It's why what should be a pretty decent occupation -- butchering a cow -- is one of the most dangerous jobs in the U.S., where people work dangerously long hours and are constantly pushed to work harder, faster, and more recklessly.
I don't see market pressure pushing people towards more rewarding jobs. I see market pressure pushing human beings out of the labor pool.
Also, consider the self-checkout. A machine is "doing the work of" a retail cashier. But not really. In fact, a human being (the customer) is doing the work of a retail cashier. Self checkouts aren't faster than a human cashier. They're slower. They'd have to be, because when you check out, your are doing so with only a modicum of experience. But it's just enough that you can do it. Stores haven't introduced them to speed up checkout. They've done it to get rid of cashiers. Whenever I go to the local supermarket, there aren't any cashiers at all, really. Just one person monitoring the four self-checkout stations. And what is the result? The supermarket has transfered the work to us. So now, even though the difference is slight, they have outsourced the labor to us, the customer.
If you watch a lot of sci-fi like I do, you'll notice that in non-dystopian futures, pretty much humans have done away with concepts of money and wealth altogether. And that's because, realistically, in a world where machines do everything and there's no need for human labor, you can basically have two outcomes: one in which all wealth is shared (and therefore essentially non-existent) and all humans live in relative ease and comfort, or one in which a vast majority live in a state of near-or-below subsistence level poverty. You can't successfully create a healthy society where people must continue to generate wealth but are unable to do so.
I firmly believe that most productivity increases aren't signs of progress as much as they are indicators of psychological torture and human exploitation. How many workers in the U.S. are working an extra 5-10 hours per week, just so they can "keep up with" an unrealistic level of output set by their superiors?
posted by Deathalicious at 9:59 PM on August 9, 2011
Okay, so in your world, making shoes by hand is unpleasant and boring, whereas working minimum wage as a Panera cashier is exciting and wonderful?
I don't doubt that many, many horrible jobs have been replaced by machines. But it seems to me like there are plenty of horrible unpleasant jobs out there -- it's just that the drive for efficiency has led us to force fewer people to do more work in those jobs. It's why what should be a pretty decent occupation -- butchering a cow -- is one of the most dangerous jobs in the U.S., where people work dangerously long hours and are constantly pushed to work harder, faster, and more recklessly.
I don't see market pressure pushing people towards more rewarding jobs. I see market pressure pushing human beings out of the labor pool.
Also, consider the self-checkout. A machine is "doing the work of" a retail cashier. But not really. In fact, a human being (the customer) is doing the work of a retail cashier. Self checkouts aren't faster than a human cashier. They're slower. They'd have to be, because when you check out, your are doing so with only a modicum of experience. But it's just enough that you can do it. Stores haven't introduced them to speed up checkout. They've done it to get rid of cashiers. Whenever I go to the local supermarket, there aren't any cashiers at all, really. Just one person monitoring the four self-checkout stations. And what is the result? The supermarket has transfered the work to us. So now, even though the difference is slight, they have outsourced the labor to us, the customer.
If you watch a lot of sci-fi like I do, you'll notice that in non-dystopian futures, pretty much humans have done away with concepts of money and wealth altogether. And that's because, realistically, in a world where machines do everything and there's no need for human labor, you can basically have two outcomes: one in which all wealth is shared (and therefore essentially non-existent) and all humans live in relative ease and comfort, or one in which a vast majority live in a state of near-or-below subsistence level poverty. You can't successfully create a healthy society where people must continue to generate wealth but are unable to do so.
I firmly believe that most productivity increases aren't signs of progress as much as they are indicators of psychological torture and human exploitation. How many workers in the U.S. are working an extra 5-10 hours per week, just so they can "keep up with" an unrealistic level of output set by their superiors?
posted by Deathalicious at 9:59 PM on August 9, 2011
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posted by Blazecock Pileon at 5:06 AM on August 7, 2011 [6 favorites]