Does Fair Trade coffee cost more to the consumer?

It does not have to. For example, when compared to other organic and specialty grade coffees, Equal Exchange's shelf price is usually the same or less. Most supermarkets price our non-organic coffees from $6.99 to $8.39, and our organic coffees from $7.99 to $9.99 per pound. Yet, price is often an issue as coffee companies on average charge retailers an extra 65 cents per pound for fair trade coffee. (See "Sustainable Coffee Survey of the North American Specialty Coffee Industry", p. 11, www.scaa.org, homepage)

4 Reasons Not To be Cynical and To Give Fair Trade a Chance

If you've landed on this page after following the link from Cracked.com you were probably expecting to find some tidbit of information that would support Gregory Myers' article "4 Reasons Why Fair Trade Coffee Is a Scam." Sorry, but we don't have anything like that for you.

However, we can do better - we have four* reasons why Fair Trade Coffee (& Fair Trade tea & chocolate & bananas, etc) is, in fact, something that even the most disillusioned cynic amongst us can support.

Reason #1

You know it works because the hundreds of thousands of farmers already selling to the Fair Trade market can't get enough of it, and more farmer cooperatives contact us, and other Fair Traders, every month seeking the opportunity to sell us their coffee, cacao, cashews and you-name-it. Just think about it for a second - Fair Trade has been around for more than 25 years (50 if you count handicraft products) and the number of farmers selling to the Fair Trade market has grown every year. Would they do that if it wasn't working for them and others they knew? You make smart choices, so why wouldn't they? Remember these farmers live in economic straits that you could hardly imagine. As a result these farmers have no margin for error and they act cautiously. After starting with just 1 co-op of few hundred farmers in 1988 there are now 827 farmer co-ops in 58 countries exporting to the international Fair Trade market. Would they be flocking to Fair Trade if they were getting better terms in the conventional marketplace?

Reason #2

Not everything is too good to be true. Good initiatives that promote a modicum of decency, like fair trade or volunteerism or disaster relief efforts, do and can happen all the time. Mr. Myers, and some Cracked readers, assert that Fair Trade is just a clever, insidious ploy - or vast conspiracy even - to hoodwink gullible, guilt-ridden folks out of an extra buck, all while actually exploiting - not helping - small scale farmers. While all of us have seen some things that make us lower our expectations only a fool would dismiss every example of idealism. And many people, professionals actually, who live to serve others in need, like those at Lutheran World Relief, the United Methodist Committee on Relief, American Jewish World Service and so on, have consistently embraced Fair Trade as a real tool that works for farming communities around the world and they have advocated for it for over a decade.

Reason #3

Plenty of people who actually know the coffee industry and international economic development, and just plain 'ole business have consistently endorsed Fair Trade as an innovation that does what it says it does.



Here are some of the others that have spoken up for Fair Trade:

Reason #4

Mr. Myers article is so full of errors and sloppy reasoning that one cannot take it seriously.

For example, it states that the Fair Trade "floor price" for coffee is only $1.40/lb when it is actually $1.60/lb OR the current market price plus $0.20, which today is about $1.80/lb. And, in fact, most Fair Trade coffee is also organic, which means the farmer co-ops must be paid at least another $0.30/lb, so call it $2.10/lb in the end.

He repeatedly refers to "FLO" when we in the industry know he must mean a totally different organization call Fair Trade USA. And, of course, he mixes up Finland with the Netherlands, and 'free trade' with 'fair trade', and so on.

Even the Finish study that he cites (but which he attributes to the Dutch) does not in fact support his argument because the Finnish context is so unlike the US marketplace, or because in places it often actually validates the case for Fair Trade.

In pt. #3 Mr. Myers confuses apples with oranges. In other words, in some places he's comparing the prices paid for a raw material (the unroasted green coffee exported by the farmer cooperatives) with the wholesale price charged by a Fair Trade firm like Equal Exchange for a finished packaged product. But elsewhere he's referencing the retail price charged by a grocery store. Then he further mixes it all up by alluding to the price charged for a cup of brewed coffee by a cafe. It's a sense-less hodge-podge. We could try to disentangle his tortured math but it is not worth your time nor ours.

Pt. #2 is unfounded attack on the various Fair Trade certification agencies and the fees they collect to pay for their work. These agencies (like Fair Trade USA, IMO, Fair Trade International) and the people who certify organic farms or certify manufacturers for various levels of quality control (the ISO system) provide a service and this costs money, often up to 1% of the retail price - which seems reasonable. And this external auditing, or verification service provides value to the all parties involved (to consumers - so they know that a product claim is valid; to the manufacturer or food company - so that their claims will be believed; and to the farmers - so that there will be a market for this different kind of product).

If you've read this far we thank you and hope that the next time you come across of a screed against Fair Trade that you'll check back with us again.

Sincerely,
The worker-owners of Equal Exchange



*We actually have at least 14 reasons - but we know you've other things you want to do so...