Despite all the fair trade campaigns and anti-globalization protests, it's likely that the java you slurp at your neighborhood café is still grown by workers earning barely enough to stay alive. Why aren't fair-trade urns popping up in every high-end café? One answer, as business people like to say, is volume. Many coffee producers and retailers say there just aren't enough fair-trade beans in the world that meet the standards of premium outlets.Of the world's 55-billion-pound harvest, only 11 million pounds are classified as "sustainable" beans, and of those, the subset of fair trade (grown by co-ops where workers are paid a guaranteed, not a market-based, wage) is a mere fraction of the total.
Supplying consumers willing to spend the extra cash it costs for ethical joe is a vicious cycle. The small bean supply means less marketing muscle for those promoting fair trade, which in turn means less demand -- currently only 4 per cent of Canadian consumers have ever tried fair-trade coffee, and only 10 per cent have even heard of it.
According to Caroline Whitby of TransFair Canada, an agency that accredits companies with a fair-trade designation, most corporations are hesitant to buy beans at the fixed fair- trade price. "Some resist entering a system that will put them in the public eye and require third-party inspection," she says. "TransFair Canada-licensed companies sign agreements that include external audits.'
But in the long run, the coffee industry cannot be transformed without the support of the four major coffee titans, Nestlé, Philip Morris (Kraft), Sara Lee and Procter & Gamble (Folgers). A big part of their business comes from lower-grade coffee beans, i.e., those that sell at cheaper prices, so they complain that their products can't always absorb the costs of fair-trade certification.
"The goals of fair trade are right, but their approach doesn't address the root issues," says Win Sakdinan, a spokesperson for Procter & Gamble Canada. He believes fair trade encourages oversupply in the market. By guaranteeing a minimum price set outside of market forces, he opines, a system of flawed economics is created.
Presently, a few lucky farmers win the "subsidy" of gourmet coffee drinkers, he says, while the vast majority of growers must sell in global markets where consumers won't or can't pay a premium for a fancy cup of coffee.
Indeed, fair-trade plantations operate outside of typical world economic market dynamics. In effect, the fair-trade markup provides a kind of wealth transfer from those who can afford high-priced consumables to those toiling in poverty. The differences in remuneration are striking. A co-op like la Florida of Peru is guaranteed by its fair-trade trading partner between $1.26 and $1.41 per pound for Arabica coffee beans, almost three times the current global price.
Another problem for industry, according to Coffee Association of Canada president Sandy McAlpine, is fair trade's organizational requirements. "Only those farmers who are organized into approved cooperatives can supply the fair-trade pipeline," he says. "So small private farms and larger estates are not eligible, despite the fact that included in these categories are some of the most enlightened and progressive coffee farms in the world. This has led to much opposition to the fair-trade model."
Whitby responds: "We realize this is a problem. There is the potential to certify plantations;" the issue is under review. "We just need the assurance that allowing fair-trade coffee to come from plantations would not take away from what the small farmers have."