Just weeks after oxfam riled the anti-globalization movement by suggesting that trade, not aid, is the best cure for Third World poverty, the organization is once again on the receiving end of activist criticism.This time it's a partnership between Oxfam's American branch and the Starbucks coffee company that has put backs up. The unusual project involves a $250,000 contribution by Starbucks and the Ford Foundation to enable Oxfam to help a Mexican coffee cooperative improve the quality, and therefore the price, of its yield.
While Oxfam hopes the venture will serve as a model for other attempts to improve the businesses of impoverished coffee workers, critics fear it will only allow Starbucks to continue doing what it's been accused of in the past: parlaying a negligible sum of money into a public relations bonanza.
For his part, Oxfam's Liam Brody -- the staffer who helped put together the agreement with Starbucks -- says his organization is responding to a desperate situation. Worldwide overproduction of the second-most-traded commodity after oil has sent coffee prices to their lowest level in a century.
But, says Brody, small growers can still do well even in this situation if they learn to grow the premium coffee favoured by tony cafés, coffee that fetches $1.20 a pound (U.S.) instead of the 40 cents paid for ordinary beans on the New York coffee market. By bringing together growers and Starbucks staff, Brody foresees the construction of "cupping labs,' places for tasting samples, where quality assurance procedures that can seem mystical to many producers will become understandable.
"Hopefully, this project will develop into something that will benefit thousands of farmers in multiple countries,' he says.
But the Starbucks-Oxfam liaison reveals a clash of philosophical outlooks around a key question: what's most effective at getting Starbucks to mend its ways, picketing them or treating them as partners? Here, after all, is a company that has disappointed NGOs. Fair-trade coffee represents just 1 per cent of its total, and its new campaign features ethical coffee as its selection-of-the day only once a month.
And while the coffee crisis has forced hundreds of thousands of farmers off their land, Starbucks is doing quite fine, thank you. Revenues are up, and stock market analysts recommend company stock as a buy.
Brody, who first came into contact with Starbucks while he was working on college campuses trying to get fair-trade coffee made available to students, says he takes a pragmatic approach. For socially conscious people to get what they want in the world, he says, "we can't write off Starbucks. We have to find ways to help them understand, to bring them to the table, because the lives of farmers depend on it. We might not always be happy about where they are in their core business practices, but as civil society and concerned citizens and compassionate seekers of justice, we have to keep pushing.'
But talking to Sue Mecklenburg, Starbucks VP of business practices, it's unclear how much of a commitment is actually on the table. On the speakerphone, with the company's PR manager at her side, Mecklenburg offers the picture of an open-ended project in which the company is making few guarantees -- and certainly nothing that could be construed as an undertaking to increase its purchases of fair-trade coffee.
There is no requirement that Starbucks buy any increased quantities of fair-trade coffee, or even buy coffee from the co-op that's taking part in the project, Mecklenburg explains, because "when we enter into these partnerships we really try to create an agreement that reflects things over which each party has control. We can work with farmers, we can provide technical assistance, we can do all sorts of things, but we can't guarantee the product they'll be able to produce, so we try to set these things up so they are achievable.'
She acknowledges, however, that despite the company's oft-expressed concern about getting the supply of fair-trade coffee it needs, there is now more such coffee available from Starbucks current suppliers than it is buying. "We're buying considerably more fair-trade coffee than our customers are demanding,' she says. (Bought by the cup at cafés that offer it, fair-trade coffee is about the same price as conventional coffee, but it can be about twice as pricey when bought by the bag.)
Besides, Mecklenburg says, just because 99 per cent of Starbucks coffee doesn't carry the "fair trade' designation doesn't mean it's "unfair trade.'
"Fair trade tries to make sure that there are fair prices and long-term relationships and that we cut out the middleman. We buy three-quarters of our coffee at outright prices (negotiated directly with producers), have long-term contracts with about a third of our suppliers and buy directly about 60 per cent of the time.'
But to Deborah James of Global Exchange, a San-Francisco-based NGO that promotes fair trade in coffee and other goods, it sounds as if Starbucks, rather than taking part in the fair trade monitoring system, wants to get kudos for doing good but hopes its customers take its word that it's doing the right thing. "They won't submit to independent monitoring, and I'm not taking a lot of business claims on face value these days,' James says.
James is skeptical that much long-term benefit will come out of the Starbucks-Oxfam project. Dealing with the coffee crisis is "not about donating money to a charity or to a cooperative. It's about changing the way trade is carried out.' Starbucks, she says, actually perpetuates the marginalization of fair-trade coffee by "treating it as a flavour instead of as a way of doing business. People might say, "I don't like the taste of fair trade. I'm going to buy Guatemalan or Indonesian.' Starbucks says its entire business model is based on fairness to farmers, but if that were the case, it would do a lot more fair trade.'
The firm's uncertain commitment to fair-trade coffee puts the organization that licenses fair-trade sellers in the United States -- Transfair USA -- in an awkward position. On the one hand, Starbucks is their largest buyer. On the other hand, fair trade as a percentage of Starbucks' total purchases is infinitesimal, and the company insists its own sourcing guidelines are good enough. Kenya Lewis of Transfair says companies are leery of taking steps that would cut into their flexibility, but as time goes on they will realize fair trade makes business sense because certifying NGOs like hers actually assume the costs of verification.
As NGOs like Transfair and Oxfam retool their strategies for the globalization era, it's not considered cool merely to call companies on their deficiencies. The word now is "collaboration.' As Ray Offenheiser, the president of Oxfam America, pointed out in a recent policy paper, many business leaders have come to the conclusion that they need to act responsibly, and the challenge for NGOs is to develop "more nuanced strategies' to deal with the private sector. In fact, Oxfam America has just hired a staffer whose title is "private sector engagement.'
But, as with its controversial trade report, Oxfam faces the challenge of bringing its membership along with its new thinking. While senior staff have been dialoguing with Starbucks, the rank and file have been doing what activists have always done -- protest.
For example, Suresh Tumkur of Oxfam's Toronto chapter only a few months ago got his name in the paper for picketing a Starbucks on Queen Street for selling genetically modified milk and cream, among other food products. As for Starbucks' ethical commitment, you can put him down as a skeptic. "I think it's a lot of PR,'says Tumkur, who runs a Web site on trade issues with other Oxfam volunteers.
Tumkur's group is planning an educational session on trade issues for September 18. That's the same day Oxfams around the world will issue recommendations on how to respond to the coffee crisis.
Senior policy wonks are currently discussing a scheme in which the World Trade Organization would be given the authority to deal with coffee. Let's see how that one goes down with Oxfam's envelope lickers.