Every night just before I fall asleep, I find myself thinking about coffee. I find myself daydreaming about the way it smells right after being ground or the way it looks as I slowly pour in the half and half and stir it up with a small spoon. I get excited by the prospect of waking up to coffee in the morning and find myself looking forward to the way it wakes up my mind and prepares my senses for all of the noise and the chaos the day might bring.
I’m not sure when this nightly coffee ritual began. I can barely remember when it was that I first started drinking coffee in the first place, but one thing remains certain; my relationship with this beverage has developed slowly over the years. It was born out of necessity in the years of undergraduate procrastination, when a cup of coffee was no more than a cup of caffeine to me. From there the relationship swelled to become an acquired taste for something uniquely delicious. Nothing else in the world tastes quite like coffee, I’ve discovered, and no other beverage is quite so political.
It is fitting, this relationship I have developed with coffee over the years, as I consider myself to be a distinctively political person. That is, politics matter to me. That has never changed, despite my earlier indifference towards coffee. Naturally, in my budding coffee drinking years I always reached for the fair trade label when purchasing a cup or a bag of coffee beans, despite the fact that I had little understanding of what this label actually meant.
Recently, though, I have started to wonder about this beverage that I have such an intimate relationship with. I drink coffee every single morning, and think of it before I go to sleep each night. I buy a pound of coffee beans every other week and yet, until recently, I had rarely stopped to wonder about where it came from, who grew it, or how my purchases affected their quality of life. In recent months I had going to a local health food store and seeing coffee on the shelf labeled “direct trade” sitting right next to another brand labeled “fair trade”. I started to ask myself, “What, exactly, does fair trade mean?” Perhaps even more importantly “who gets to decide what fair trade is and what fair trade is not?” And lastly, “What on earth is direct trade?” In an effort to answer some of these questions I decided to dig deeper.
Fair Trade vs. Direct Trade Coffee
I contacted nine US coffee roasters with a request for a phone interview regarding their coffee purchasing models and their thoughts about fair trade and direct trade coffee. I received responses from six out of the nine roasters, and was able to schedule phone interviews with four of the nine contacted. My goal was to interview a wide variety of specialty coffee roasters, each with a particular emphasis on either fair trade or direct trade coffee purchasing models. To reach this goal, I identified several smaller coffee roasters in Michigan (my home state), several independent coffee roasters across the country, along with one larger, nationally recognized roaster.
In my quest to demystify the fair trade label, I discovered a small, budding movement of coffee roasters in the United States who are dedicated to what they call a “direct trade”- purchasing model. This model is based on the premise that what we know as fair trade is not working. It is an alternative-purchasing model that aims to cut several steps out of the process from farm to cup in order to ensure that more money ends up in farmers pocket. In discovering this I began to wonder how does direct trade compare to fair trade? Which model more effectively addresses issues of economic, social and environmental justice? The answer, I found out, was not nearly as clear-cut as I hoped it would be.
Among all of the coffee roasters and coffee enthusiasts I encountered in my research, I found consensus on one issue alone. Among all coffee roasters that advertise themselves as socially conscious and justice-minded, a clear divide exists between those who are committed to upholding the original purpose and mission of fair trade, and those who have given up hope and moved on to new alternatives.
A History of Fair Trade
The first Fair trade label appeared in 1988 under the name of Max Havelaar. The label was named after a fictional character from an 1860 Dutch novel. In the story, the main character, Max Havelaar, struggles against the Dutch colonial system, which was exploiting coffee pickers in the Dutch colony of Java. Throughout the 1990’s, the Max Havelaar idea was replicated and took on several different names throughout Europe and the United States. Eventually, in 1997 the Fairtrade Labeling Organization (FLO) was established in Bonn, Germany. The mission of the FLO was to establish an international consensus on the standards and requirements for fair trade certification. It set a minimum price for fair trade certified coffee, which has not been updated in over ten years.
The fair trade price, as it stands today, is $1.26 per pound. This is the minimum price that a fair trade coffee farmer is “guaranteed” for a pound of green coffee, despite the constant fluctuating price of coffee on the international market. This becomes problematic when the price of coffee rises above the fair trade price, and suddenly fair trade coffee producers are faced with a dilemma on whether or not they should continue to receive the fair trade price or sell their coffee on the black market to make a few extra cents per pound.
While following a timeline of development of fair trade coffee, it is important to note that the first fair trade label appeared alongside the coffee price crash of the late 1980’s. The International Coffee Agreement, which arose out of the Cold War, held the international price of coffee at a minimum of $1.20 per pound. It also regulated the amount of coffee on the market at any given time. When this agreement disintegrated in 1989, the market was flooded with cheap coffee produced in Vietnam, part of a United States development program following the Vietnam War. This caused the international price of coffee to crash, reaching an all-time low of $0.41 cents per pound in September of 2001.
Suddenly, coffee producers who were previously able to rely on coffee production as a viable means of livelihood, were being forced to give up their land and migrate into the cities to find work. The implications of this were numerous and hit hardest in small coffee producing nations such as Nicaragua which relied heavily on coffee exports. As more and more coffee farmers abandoned their land, the political and social implications of coffee production became much clearer to socially conscious consumers. Enter fair trade coffee.
Fair trade coffee began with two goals, securing a fair price and living wages to coffee farmers, and promoting social justice worldwide. However, as time pressed on and globalization brought upon the reign of multinational corporations, some say that the mission of fair trade has become watered down by companies like Nestle selling fair trade certified coffee. The question remains, will the fair trade mission of social and economic justice fall by the wayside as corporations such as Nestle and Sara Lee (which control the majority of the coffee industry) begin to see dollar signs behind fair trade label?
Slowly but surely, several smaller coffee roasters that were built on the original premise of social and economic justice, have started to opt out of fair trade certification in lieu of alternative labeling options. Some have chosen to adopt the “Fair for life” certification, while others have moved towards designing their own trade models, many of which are commonly referred to as “direct trade”. Yet, on the other side of this divide, many fair trade coffee roasters remain, demanding that those who have social justice in mind have an obligation to stay and uphold the original intent of “fair trade”. Their argument is simple. If all of those smaller coffee roasters who are focused on social and economic justice give up on fair trade certification, who is to say that the multinational corporations with dollar signs in their eyes aren’t going to swoop in and co-opt the fair trade label for good? What does this all mean for consumers, who may become confused and jaded by the constant back and forth between different variations of what seem to be the same thing?
Still, there are some who remain disillusioned with the fair trade movement as a whole and see the only improvement coming from a different model entirely, direct trade. The direct trade purchasing model varies considerably from one roaster to the next, with the common link being an emphasis on quality. Much of the fair trade certified coffee that is available in the United States comes from farmer cooperatives developed in coffee producing areas. The cooperatives often keep a portion of the profit made from each pound of fair trade coffee sold in order to cover the costs for facilities and organizational fees. This is only one step in the process between farm to cup where a second party takes a chunk of the $1.26 per pound that a fair trade certified coffee farmer is guaranteed.
Also due to the cooperative structure, fair trade coffee is often a blend of beans coming from many different farmers, sometimes from many different areas. The result of this, I am told, is lower quality coffee. As a response to this perceived lack of quality, many small and specialty coffee roasters have developed a direct trade purchasing model that focuses on building relationships with individual producers. Some roasters that I spoke to actually purchased plots of land on individual coffee farms or estates, and were entitled to all of the coffee that was produced on their “micro plot”. Others, while still focused on quality, placed a stronger emphasis on building relationships with producers and creating a more egalitarian structure where the coffee producer is treated as an equal partner in the trade relationship.
One drawback of this model, I discovered, lies mainly in its lack of outside regulation. There is no international direct trade organization that enforces requirements or a code of conduct in trade relationships. Instead, the consumer is left to decide on their own if they trust the coffee roaster to engage in fair and equal trading practices. In a country where more trust is often placed in multinational corporations than the actual government, this kind of consumer trust is hard to come by. This may be why many direct trade coffee roasters are still operating on an extremely small scale in comparison to companies like Starbucks or Nestle.
It is also worth noting that not all coffee roasters that continue to stand by fair trade are neglecting the importance of building relationships and giving back to the communities where their coffee is being produced. Companies like Higher Grounds Coffee Trading Co. in Traverse City, Michigan, describe their coffee-purchasing model as “going beyond fair trade”. Higher Grounds chooses to stand by the original mission of fair trade, but to also move beyond its (some might say) limited vision by also aiming to be direct and long term in their relationships and transparent in all of their business transactions.
One of the biggest critiques I have heard about the fair trade model is that it supports a trade relationship that is unequal in its distribution of power. Coffee growers that want to become fair trade certified are required to provide detailed records of their production methods to those that are purchasing their coffee. However, companies that purchase coffee beans and sell them under the fair trade label are able to keep their records sealed, stating that any demand to the contrary would be violating trade secret laws. They are also required to purchase only 5% of their coffee on fair trade terms in order to use the fair trade label. It is easy to see who holds the power in this equation, and it most certainly does not lie in the hands of small coffee growers.
Yet companies like Higher Grounds strive to renew faith in the fair trade model by equalizing the power differentials in trade relationships. Consumers are able to visit a website to track the path of their coffee from farm to cup, and all purchasing contracts are open and viewable by the public. This company serves a shining example that there may be some wind left in the sails of fair trade. In a time where the fair trade label is becoming co-opted by huge multinational corporations, consumers may find themselves wondering where their coffee dollars actually end up and whether or not their choice to purchase fair trade is worth it. Companies like Higher Grounds seem to acknowledge this situation and in response, work to be as explicit and transparent as possible in their mission and business practices.
The Labeling Maze
It’s hard to believe that coffee could get anymore complicated, but for those roasters that chose to continue sourcing fair trade coffee, it does. Higher Grounds sells organic, fair trade coffee, but chooses to opt out of the Fair Trade USA label, which is the label that most American consumers are used to seeing. What was previously known as TransFair, the US branch of the Fair Trade Labeling Organization, recently changed its name to Fair Trade USA. In 2011, Fair Trade USA applied for a trademark of the term “Fair Trade Certified”, and in December of that year Fair Trade USA officially resigned its membership from the FLO. This move represents a literal and symbolic divestment on Fair Trade USA’s part from the global fair trade movement that was created on principles of social, environmental and economic justice. It represents Fair Trade USA’s attempt to effectively co-opt the term “fair trade” to use it for strictly profit driven motives.
These are some of the reasons I was given when I asked why Higher Grounds chooses not use the Fair Trade USA label. Another reason, I was told, is that Higher Grounds as a company is not entirely profit driven. Yes, they have to cover costs and pay their bills like the rest of us, but at the end of the day the people behind this business have more in mind than just money. They remain committed to the same revolutionary ideas that the fair trade movement was born out of over 20 years ago, and interestingly enough, some of these ideas appear incredibly similar to the ideas coming out of the direct trade movement. The most noticeable of these similarities being annual visits to meet farmers face to face and build relationships with coffee-growing communities.
Yet at the end of the day, it all seems to boil down to the consumer. Is the consumer concerned about having only the highest quality coffee available? Or will they settle for nothing less than the justice principles outlined by the original fair trade movement? Many of those who promote direct trade believe that fair trade coffee simply cannot live up to their quality standards because of its cooperative structure that brings in coffee beans from many different plots of land. One of the direct trade roasters interviewed even claimed to pay nearly $4.00 per pound for their coffee, citing its superior quality as their motivation for shelling out the dough. Yet companies like Higher Grounds reveal that there is more to fair trade coffee than just a label. In the end, if we hope to save the fair trade movement from corporate takeover, it has to become just that, more than just a label. If the revolutionary ideas of fairness and justice are to continue, there is work to be done, and that work begins with the consumer.
To coffee lovers everywhere: keep a sharp eye and never stop asking questions.
*Special thanks to all the wonderful people who took some time out of their day to talk with me about fair trade, direct trade, social justice and the politics of coffee.