|
 Tea in the
Fast Lane
Three Cuppings, a
Three-Year Contract
and 23 Years of Aging
Fair
For All
A Tale of
Two Cafés
Fit for Print
From the Publisher
Unfiltered
The Deep Steep
Business Basics
Fresh Products
Fresh Faces
Fresh on the Scene
Show Calendar
Advertiser Index
|
|
|
|
Fair For All
Can Fair-Trade Coffee Broaden Its Boundaries?
by Mark Pendergrast
In these perilous times, when coffee prices have reached historical lows, fair-trade-certified
coffee offers a lifeline to many small-scale farmers. Fair trade is vital and
important. I fully support the model as currently defined-but it's not enough.
The needs of coffee laborers on mid- to large-sized plantations must also be addressed.
By its existing definition, fair-trade certification does not cover the majority
of the people who tend seedlings, prune trees, bend to dig irrigation ditches,
balance on hillsides to harvest coffee, supervise beneficios, or hand-sort beans.
These people are just as affected by the price crisis as workers on fair-trade-certified
farms, and they are facing the same painstaking challenges of eking out a living
to feed themselves and their families. Why shouldn't they be included in the fair-trade
model? A recent Wall Street Journal article
(July 8, 2002) by Peter Fritsch illustrates the urgency of this issue. "In lush
coffee-growing regions from Central America to Africa," writes Fritsch, "the collapse
of world coffee prices is contributing to societal meltdowns affecting an estimated
125 million people, [resulting in] a combustible brew of unemployment, hunger
and migration."
Whole rural communities are disappearing. "We've had no work since
February," an unemployed 33-year-old Nicaraguan coffee worker told Fritsch. That's
why he and his family were living under a plastic tarp pitched by the roadside.
Currently, coffee beans can only be labeled "fair-trade-certified"
and sold at a minimum price of $1.26 a pound (more than twice the "C" market price)
for green processed beans if they fit the criteria set by the Fair Trade Labeling
Organization International (FLO) based in Bonn, Germany. (FLO supervises a network
of 17 national labeling initiatives, which cover a network of 300 cooperatives
in 21 countries around the world, representing 550,000 farmers.) That means such
beans must be grown by smallholders who have formed a democratically run coffee
cooperative, in addition to a series of other criteria relating to transparency,
environmental standards and quality improvement. That's great, as far as it goes.
Anyone who visits a co-op that sells fair-trade coffee comes away impressed by
the dedication of the campesinos, their pride in their product and the huge difference
the price differential has made in their lives.
But what about the workers who labor on other people's land to
produce coffee and who don't qualify for fair-trade certification? To begin with,
how many laborers are we talking about? Coffee folklore has it that 70 percent
of the world's coffee farms in numbers are owned by smallholders, but that the
larger plantations actually produce more than 50 percent of the world's coffee.
This means the majority of coffee workers pick beans that do not currently qualify
for fair-trade status. It also means that there's no monitoring mechanism to assist
those workers in their struggle to be paid fairly for their labor.
To address this global inequity, I think the definition of fair-trade
coffee should be expanded to include larger farms that abide by carefully considered
criteria set by FLO or some other watchdog organization. There should be a parallel
mechanism to the model successfully demonstrated by FLO, to monitor and certify
labor conditions on coffee farms. These requirements should include a reasonable
minimum wage, decent housing, medical care, education, freedom to unionize, provision
for schooling, no child labor other than during school holidays to help families,
proper environmental protection of workers, feasible sustainable agricultural
practices, and efforts to improve quality. Also, the criteria should include a
mechanism to ensure that larger farms selling newly certified fair-trade coffee
do not take advantage of their profits by swallowing smallholder cooperatives.
Ideally, the criteria would also incorporate a mechanism that encourages workers
to grow their own food crops, and it would include a fund to help workers purchase
their own piece of land on the finca. Many possibilities could be considered.
This expanded definition of "fair-trade coffee" would involve two
distinctly different kinds of beans: 1) specialty-quality "estate" coffees, and
2) non-specialty beans bought primarily for commercial-grade canned or instant
coffees.
Perhaps this second type of coffee could receive a different certification,
such as "fair-labor-certified" rather than "fair-trade-certified," and it could
use a different logo. (For the sake of clarity, I will use the "fair-labor" terminology
throughout the rest of this article for that second certification category.) But
the essential point remains: We need to find a way to take care of all coffee
workers.
The idea of fair trade for all seems like common sense to me, and
certainly, many people in the industry are dedicated to creating a fair-trade
model that is equitable and workable for everyone. But when I floated this idea
around the 2002 Specialty Coffee Association of America (SCAA) convention in Anaheim,
I was surprised that some champions of the fair-trade coffee cause were not supportive
of the concept at first. For instance, when I spoke with Reina Foppen, the attending
FLO representative, she was very discouraging. She wondered how FLO would be able
to finance the huge additional expenditure in staff and travel to monitor larger
coffee plantations. This is a valid concern. Perhaps FLO will not be the organization
to tackle this initiative, but whatever organization does will need substantial
resources.
Also skeptical of my proposal was Deborah James, fair-trade director
of Global Exchange, a San Francisco-based international human rights organization
that has played a large role in raising awareness of fair-trade-certified products.
She agreed with Foppen. Who did I think was going to buy all this newly certified
fair-trade or fair-labor coffee? "Last year, the 550,000 farmers already in FLO'S
program produced more than 165 million pounds of coffee that could be sold at
fair-trade prices, yet only 30 million pounds were," James says. "That means participating
cooperatives are having to sell 135 million pounds of coffee at non-fair-trade
terms. The big gap is in the U.S. market, which accounts for one-quarter of all
coffee traded in the world. If more American companies were to convert to 100
percent fair-trade coffee, or dramatically increase their fair-trade offerings,
thousands of farmers would feel an immediate improvement in their lives."
There are many coffee cooperatives that would qualify for fair-trade
certification under the present standards but that are not being certified currently
because there simply isn't enough demand. Even co-ops that are certified can only
sell a small percentage of their beans as fair-trade-around 20 percent on average.
So what would be the point of an exponential increase in fair-trade offerings?
Both James and Foppen referred me to the Coffee Working Group (CWG),
comprised of eight Dutch fair-trade, development, church-related, and trade union
organizations. The CWG has worked since 1999 to address "the working and living
conditions on coffee plantations." Bart Ensing of the Fair Trade Organisatie wrote
the following in a July 2000 newsletter: "A code of conduct is generally seen
as beneficial, but only if it is effectively implemented, monitored and verified."
The organization sent representatives to coffee plantations in Brazil, Kenya and
Guatemala, and reported the following in its January 2002 newsletter: "Frequently,
workers received far lower wages than legally required, women regularly were paid
even less, child labor was common, and housing and health services were found
to be very poor."
What CWG has mostly done, however, is open a dialogue, organize
workshops and encourage labor unions on coffee plantations. But going on strike
will not raise the price of coffee or provide better benefits, so while I agree
with the organization's concerns, I am not optimistic that the CWG efforts will
make a big difference.
James and Foppen are hopeful that these and other such efforts
will address the needs of workers on larger plantations. Foppen points out that
in the old days, before the overriding emphasis on maximizing shareholder profit,
businesses cared more for the well-being of their employees and customers, and
they should do so again. "We participate in key debates on what the coffee industry
can do to take responsibility for the circumstances on plantations where they
source coffee," Foppen says.
In subsequent conversations with Deborah James, she emphasized
that she would be delighted with my ideas to expand the definition of fair-trade
coffee, including fair-labor, if there were resources for FLO, TransFair, Global
Exchange, and other organizations to promote it. She suggested perhaps creating
a separate monitoring system for fair-labor coffee from larger farms. "We have
been doing the best we can with very limited resources," she explains. "Why doesn't
the industry step forward? The big roasters-and I include Starbucks-have made
hundreds of millions of dollars. They should give back a substantial portion of
the massive savings they've seen on coffee prices to help raise the working conditions
of farmers and workers. Even small roasters have profited from the coffee crisis
and could contribute substantially to the cause." Then, James emphasizes, the
labor-intensive certification process could realistically be expanded, and there
would be money to market the newly certified beans.
While corporate roasters recognize that the current coffee crisis
is profitable for them in the short-term, they also realize that the situation
is threatening the future of the entire industry. It isn't that they have done
nothing to try to help. For instance, Procter & Gamble contributed $1.5 million
over the last year to Technoserve to aid coffee-growing areas. Starbucks gave
$1 million to the Calvert Social Investment Foundations to help coffee farmers
improve quality, raise capital, and acquire micro enterprise and/or credit at
fair rates. The company has also expanded its fair-trade coffee program, pledging
to buy at least a million pounds a year, and the company has announced new coffee
purchasing guidelines that offer up to 10 cents a pound extra to certified suppliers
who meet the company's newly set environmental, social, economic, and quality
standards. Finally, Starbucks and the Ford Foundation (in collaboration with Oxfam)
have committed $250,000 towards helping Oaxacan fair-trade cooperatives in Mexico
improve quality, particularly through training in cupping. For several years,
German-based Jacobs Kaffee (owned by Philip Morris) has been training members
of Peruvian coffee cooperatives in quality matters, and the company has bought
coffee directly for a small premium, though not as high as fair-trade prices.
Such efforts are worthy, but they are Band-Aids that are unlikely
to get to the root of the problem. I don't think the large corporations will ever
do enough to help the situation on their own. Instead, they usually engage in
price-cutting wars with one another that make them seek ever-cheaper sources of
coffee. Right now, the corporate roasters are making record profits from coffee,
and though some have given back in the form of donations, it is not enough to
make a material difference in the lives of most coffee growers. Without fundamental
changes, such as a more inclusive program for fair-trade and fair-labor certification,
we cannot expect conditions to change materially.
Paul Rice, president and CEO of Oakland, Calif.-based TransFair
USA (the only U.S. fair-trade certification organization), also thinks expanding
the definition of fair trade is a potentially good idea, depending on how it is
implemented. "TransFair wants to improve the global fair-trade model so that it
responds effectively to the needs of the entire industry, including farm workers,"
he says. "I dream of the day when fair trade is the standard for all coffee. Fair
trade should help farm workers, in addition to small farmers, earn a decent living."
I agree. As an outsider looking at the coffee industry-I'm a writer,
not a roaster-I am in a somewhat privileged position. I don't need to worry about
industry politics or who agrees with me, so I am writing this article as an editorial
in hopes of sparking debate. I think it's time for everyone in the industry to
step up to the plate and help organizations like TransFair expand the pie. Fair-trade
coffee currently represents less than one percent of the world's coffee sales,
and it has garnered a huge amount of publicity, first in Europe and now in North
America. But while sales continue to grow, many specialty roasters are still skeptical
of the economic sustainability of fair-trade coffee, which they believe focuses
more on social issues than on coffee quality. Certainly, fair-trade coffee has
had to play catch-up in the area of quality, but the quality has greatly improved,
and I can conceive of a day when "fair-trade" will mean "specialty-quality"-at
least for fair-trade coffee marketed to specialty roasters.
Before I go on, let me make something clear. I think all sane consumers
should buy and drink specialty coffee. When I grew up, I didn't know there was
such a thing as decent coffee, and the specialty coffee revolution was a revelation
to me. Maybe a day will come when the vast majority of coffee consumed in the
world, or at least in the United States, is high-grown arabica. But that day has
not come, and those of us who love coffee must deal with the reality of the situation
as it is right now. And that reality should include concern for the suffering
of coffee workers on robusta plantations as well as others.
This is why I would like to make the fair-labor label available
to average-quality beans grown on larger farms-the coffee purchased by corporate
roasters-if they fit the certification criteria. If it were easy for consumers
to buy well-marketed fair-trade or fair-labor coffee at the supermarket at reasonable
prices-whether specialty or not-I think the market could be much larger. And I
truly believe that the best way to do that is to expand the definition of fair-trade-certified
coffee.
The criteria for fair-labor beans would guarantee a minimum wage
and certain other benefits, as well as reasonable efforts to improve quality.
But that is not going to make lower-quality coffee beans into specialty products,
and they will not command a minimum price of $1.26. They will, however, cost the
"Big Four" coffee roasters-Philip Morris (Kraft, Jacobs), Procter & Gamble (Folgers,
Millstone), Nestlé (Nescafé and others), and Sara Lee (the only one of the four
to offer any fair-trade-certified coffee) slightly more money, although with direct
purchases they can save on middlemen. For these companies to buy "fair-labor"
coffee, they must be persuaded that it is good business, on moral and financial
grounds.
Global Exchange has tried to get this message across by mounting
a consumer education campaign focused on Procter & Gamble/Folgers/Millstone. The
campaign, which involves letter-writing, demonstrations, local supermarket outreach,
shareholder education/activism, general public education, and other tactics, demands
that five percent of P&G's beans be fair-trade-certified. While P&G may ignore
the letters, the five percent idea is viable.
Currently, fair-trade coffee has enjoyed little success with the
Big Four. But the expanded fair-trade/fair-labor model is critical to making in-roads
with these roasters, who buy much of their coffee from medium- to large-sized
farms. In my opinion, the only way to move the Big Four to action is to use a
"carrot-and-stick" approach. The carrot: You can look good, garner good publicity
and make a good profit by selling fair-trade or fair-labor coffee. The stick:
We're going to mount a campaign and a possible consumer boycott that will knock
your cans on their cans if you don't start selling fair-trade or fair-labor coffee.
Right now, however, there is no feasible way for Folgers, Maxwell
House, Nestlé, or Sara Lee to purchase many fair-trade/fair-labor beans for their
average blends, because these companies buy most of their coffee from small, unorganized
Vietnamese growers and medium- to large-sized plantations. They are accustomed
to buying cheap, low-quality beans while competing in a price-driven-rather than
quality-driven-category. So perhaps along with expanding the definition of fair-trade-certified
coffee, FLO and TransFair should allow roasters to sell coffee that contains a
certain percentage of fair-labor beans.
For example, what would happen if Folgers could sell a "fair-labor
blend" that had a fair-labor label with a huge "5%" typed over the top? FLO, TransFair
or some other certifying agency could specify how large the type had to be. Ideally,
Folgers and other major roasters would put five percent or more fair-labor beans
into all of their blends, then increase it to 50 percent and higher when it's
clear that there is a meaningful (and profitable) market. In an ideal world, as
more consumers demand quality fair-trade or fair-labor beans, these roasters would
offer many different 100 percent fair-trade or fair-labor coffees. This would
mean a huge increase in fair-trade/fair-labor coffee sales. That way, I think
you might have a potential market, a potential carrot.
We can take a lesson from coffee history. On May 15, 1978, Procter
& Gamble learned that the U.S. House of Representatives was about to pass a resolution
condemning brutal dictator Idi Amin of Uganda and urging President Jimmy Carter
to implement an embargo on the Ugandan coffee beans that provided most of his
economic support. The next day, P&G announced with a flourish that Folgers would
no longer buy any Ugandan coffee, and other roasters quickly followed suit. I
can imagine a similar scenario for a major roaster's fair-trade/fair-labor blend.
On the other hand, this scenario also allows for a potential stick.
Recall the tremendous effect the Folgers/El Salvador boycott had just over a decade
ago. Actor Ed Asner appeared in a commercial saying, "Boycott Folgers Coffee.
What it brews is misery and death," while blood oozed from under an inverted coffee
cup. P&G went wild, yanking its advertising from any station that aired the ad,
but that created a flurry of media publicity. In the end, the campaign was largely
responsible for leading to a negotiated peace settlement in El Salvador. It is
clear that effective boycotts and publicity can move mountains, nations and major
corporations.
Don't get me wrong. I don't think that the big roasters are evil
or that they brew misery and death, and I disagree with activist literature that
preaches "Fair Trade, Not Sweatshop Coffee!" This seems particularly unfair right
now, when larger farms cannot qualify for fair-trade or fair-labor certification.
While there is a commonly held belief that larger estates are able to take care
of their workers, the truth is that these plantations are also facing the grim
realities of the current coffee crisis. Many finca owners are devastated by the
low prices and their inability to help workers. "If you only knew how we agonize
over each crying woman who comes begging for just a day's work, at any price,
and we can't afford to hire anyone," Betty Adams of Finca Oriflama in Guatemala
recently wrote to me. "The medical clinic we worked so hard to keep open has had
to close due to lack of funding. We do try to spread the little we have around,
but we have fired so many and hire so few now. I used to have a private envelope
full of money that I kept in a drawer for the really tragic cases, but now we
just can't afford it."
While certifying such fincas won't solve the industry's problems,
for hard-hit owners like Adams and the workers they employ, the fair-trade and
fair-labor model makes sense. FLO already certifies large tea, banana and orange
plantations with criteria similar to the ones I have suggested (www.fairtrade.net/sites/standards/standards.html).
How are larger coffee farms any different?
One concern is that if larger estates were granted fair-trade status,
it would mean that small co-ops currently selling fair-trade beans would be frozen
out of the market. I don't think so. The specialty roasters that currently sell
fair-trade coffee are committed to the co-ops with whom they work, and they will
continue to buy from them. I think that fair-trade coffee from larger estates
would substantially increase the demand for specialty fair-trade coffee as more
quality fair-trade beans hit the market.
There is also a legitimate worry that consumers buying lower-cost,
lower-quality "fair-labor" canned blends in supermarkets might cannibalize sales
of 100 percent specialty fair-trade-certified coffee. Again, I don't think this
will happen. These are essentially two separate markets. As much as we would like
to woo mass-market supermarket consumers to specialty coffee, most people who
buy Maxwell House don't buy specialty coffee or fair-trade-certified coffee now.
But these consumers could become buyers of a canned Maxwell House (or Folgers
or Nescafé) fair-labor-certified blend, especially if it were supported by strong
marketing, with television spots and informative point-of-purchase material.
Why would the Big Four spend the money on such marketing? For the
same reason they market any of their coffee-to make money. Plus, it wouldn't hurt
that they would look good in the process. And to take off my cynic's hat for a
moment, I really do believe that even inside corporate halls, there are human
beings who care deeply about the suffering of coffee workers.
Ultimately, fair trade or fair labor is about educating consumers
about the impact something as simple as choosing a cup of coffee in the morning
can have on global issues, such as poverty, the drug trade and immigration. A
Cone-Roper survey indicates that 81 percent of American consumers are likely to
switch brands to support a cause when price and quality are equal. Americans are
not indifferent to the sufferings of people around the world, but they are largely
ignorant about how to help. If everyone involved in the coffee industry realized
that fair-trade certification offers a solid method for addressing today's horrendous
coffee crisis, while driving revenue and increasing consumer loyalty, it could
be a win-win for all involved.
The question is this: How do we secure an equitable price for coffee?
I doubt there is just one solution. Relationship coffees that establish a direct
connection between a producer and a roaster hold promise. If the New York Coffee,
Sugar and Cocoa Exchange differentiated coffee beans based on quality, it might
help. The growing "Cup of Excellence" program and online coffee auctions of high-quality
coffees offers another valuable approach. Companies such as Café Britt in Costa
Rica offer a model for keeping more of the profits from coffee in the producing
countries by roasting in-country and exporting directly to consumers in one-way
valve bags. Other methods to add value to coffee beans should be considered. Fair-trade-certified
coffee as it is now defined is extremely useful. But an expansion of the fair-trade
definition would make a marked difference industry-wide, creating a real benefit
for all of the world's struggling coffee farmers and workers.
This dream, however, will become a reality only when someone-the
industry, government, NGOs, charities-is willing to finance it. There are some
hopeful developments. Néstor Osorio, executive director of the London-based International
Coffee Organization (ICO), recently met with officials of the World Bank, the
Inter-American Development Bank, the European Commission, and the U.S. Agency
for International Development, seeking help for the coffee crisis. USAID has pledged
$15 million to help in some way. Let's hope whatever help is forthcoming is money
wisely spent. Recall that in years past, USAID funded technified full-sun coffee,
and the World Bank helped finance the glut of coffee caused by Vietnam.
There is also a proposed ordinance circulating in Berkeley, Calif.,
mandating that all brewed coffee in the city be fair-trade, organic or shade-grown.
And a resolution has just been introduced to the U.S. House of Representatives
asking the federal government to buy only fair-trade coffee for its employees.
These are all promising initiatives, but wouldn't it also be prudent to expand
the fair-trade definition to include more farm workers?
I am encouraged that the House International Relations Committee
recently held a hearing on the coffee crisis at which Ted Lingle, executive director
of the SCAA, told politicians that the current crisis "will not be corrected by
market forces in the short run." He called for legislation to restrict the importation
of low-quality coffee beans. Colleen Crosby, owner of Santa Cruz Coffee Roasting
Company, testified that on a recent trip to Central America she "witnessed the
hardships that farmers suffered from the low coffee prices: not enough food or
clothing for their families, malnourished children whose smiles had missing teeth,
who shivered from cold because they didn't have jackets, and were frequently sick
because they lived in shacks with dirt floors and slat walls that didn't protect
from rain or cold."
In 1950, Colombian coffee representative Andrés Uribe testified
before the U.S. Congress. "Gentlemen," he said, "when you are dealing with coffee,
you are not dealing only with a commodity, a convenience. You are dealing with
the lives of millions of people. We in Latin America have a task before us that
is staggering to the imagination-illiteracy to be eliminated, disease to be wiped
out, good health to be restored, and a sound program of nutrition to be worked
out for millions of people. The key to all of this is an equitable price for coffee."
Across the chasm of a half-century, Uribe's words still ring true.
Mark Pendergrast is the author of Uncommon
Grounds: The History of Coffee and How It Transformed Our World.
He can be reached at markp@nasw.org.
|
|
This Issue: $5 U.S.
|
|
|
New to the business?
Check out our
|
|
