What Is Fair Trade Coffee?

You've probably heard of "fair trade coffee," but may not be quite clear on what it actually is. It refers more to a practice than a type of coffee, and the emphasis is definitely on the word "fair."

Before fair trade was introduced, the big – very, very big – business of coffee was all about the huge corporations, and maximizing their profits. This meant that most of the billions of dollars made from coffee growing went mostly into those corporations' pockets, but was also funneled to the various middlemen between farmer and consumer.

The coffee farmers themselves were often left with almost no money at all, as a reward for their labors. And as markets fluctuated, and supplies were artificially cut back to keep those huge profits up, it meant a great many farmers were left in debt. The mega corporations kept making their billions, while the farmers ultimately lost their coffee plantations.

However, eventually the farmers began banding together to form cooperatives, pooling their resources so they could take their coffee and sell it directly to international buyers themselves.

This cut out all the middlemen who had previously eaten into what profits the farmers themselves should have made from their work. This cooperation also cut out some of the mega corporations. What it did for the farmers, though, was allow them to get a fair price that reflected their labor, covered their costs, and allowed them some profit.

It did more than that, though. In the past, these agricultural workers either had to live on a pittance or else live on aid provided by governments and charitable organizations.

Switching to the fair trade method, now the farmers could live by the sweat of their own brow, not relying on handouts but earning a fair wage for the work they did. Since fair trade programs have been introduced, the excess profits have been used in the farmers' communities as well, helping to promote organic farming, building schools and clinics, and promoting the teaching of new community leaders.

Critics claim that since fair trade programs encourage more farmers to engage in growing coffee, the law of supply and demand might create a surplus on the market, meaning not all farmers will be able to sell their product.

This may turn out to be the case if people start drinking less coffee, but so far that doesn't seem likely. Others worry, though, that since big corporations like Starbuck's, Folger's, and even McDonald's now sell fair trade coffee, the moral, democratic underpinnings of the practice may be compromised, perhaps sooner rather than later.
It usually doesn't take long for a big corporation to start cutting back on the workers' wages, to funnel more money into its own coffers.

However, it's likely that if this happens, the farmers will once again take their own fate into their own hands, now that they've realized they can do it and circumvent the corporations that hope to exploit them.
With many non-government organizations helping them organize, and helping to distribute their product (again circumventing the corporations), the practice of fair trade might just continue to help coffee farmers earn a decent living and choose for themselves who they sell to.

By: tedsikkink

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Ted Sikkink, is an ex music industry executive who luckily got out in time, he's is very much into, photography, music, food & wine, art, information research and a "life long learning" adept. For the last 10 years Ted has been professionally active with interim management, coaching and organizational consultancy. Currently into internet marketing and fascinated by social networking and internet business development in general.