While working at Biggby, I was commonly asked if any of our coffees were fair trade. The better question, though, is whether or not having that label actually means anything.
The fair trade label is nothing more than a marketing scam. There is a middle man between the coffee importers in the United States and the farmers in countries that grow coffee beans. That middle man is often a company from the United States that sets up shop in a Central American or Asian country and makes a huge profit on exporting locally grown coffee beans.
Fair trade organizations often have the mission statement of alleviating poverty in the countries they operate in. You may see pictures of cute little Nicaraguan children in school uniforms or Micronesian women smiling and holding coffee beans.
To some extent, fair trade organizations do facilitate a more ethical business model. They require their farmers to meet environmental and human labor standards. Farmers cannot force their workers to work long hours or pay them too little (as long as those workers are recognized citizens of the country).
The system is still lacking in a lot of ways. There are numerous economical and sociological problems that happen when a non-profit tries to operate suspiciously like a for-profit.
The most obvious issue is economical. When the economy is bad, the system is capitalistic. If the demand for coffee is low, that affects the price per pound of coffee that the farmers are paid.
But when the economy is good, the system is socialist. The excess profit goes to a board of executives from the fair trade company. The fair trade executives choose to use the excess profits to build a school or start a women’s advocacy group. In some fair trade nonprofits, like Fair Trade USA, the farmers get to vote on how the money is used from a list of options that the company has given them.
There are also numerous problems this system creates in society. In order to qualify for a fair trade membership, the farmer must not only speak English but also keep all of his records in English. Only recently have some corporations started allowing records to be kept in Spanish.
While the mission of fair trade companies aims to help poor farmers, it leaves out the poorest of most third world companies: migrant workers. There are no requirements for family-owned farms to treat their employees well, and if these immigrants are paid under the table, they do not have to be paid according to the fair trade standards.
Finally, coffee with a fair trade label is often worse in quality. Farmers are paid the same blanket price for every kind of coffee they produce with a fair trade label, but if they sell it to a different company without the fair trade label, they are paid based on the quality of the bean. Strategically, the farmers sell the lesser quality coffee to fair trade companies for a higher price and the better coffee to the company that will pay them more. It’s just smart business.
We cannot be blind in our efforts to alleviate poverty and create sustainable business. Everybody loves to feel good about themselves, especially for things they would have done anyway, like drinking coffee. Compassion is a huge global industry.
However, if you truly want to make a difference, at the very least be informed about where the money is going. When it comes to ethical consumerism, there is always an improvement to be made.