By Sarah Robinson
Above all else, coffee is about people; the people who drink it, the people who make it, and the people who produce it. It is impossible to replace the coffee process, from crop to cup, with machines. We rely on the people tending their coffee trees. We rely on the traders and exporters. We rely on the roasters and we rely on the baristas. Simply put, without people there is no coffee! Therefore, it is intensely important that the people in the coffee chain are traded with fairly and transparently thereby sustaining the industry that sustains us.
Before delving into the details of Fairtrade, fair trade, direct trade, and relationship coffee I think it’s best to explain what these are and what they mean for the producer, the trader, the roaster, and the consumer.
Fairtrade (one word) is the leading fair trade movement in the agricultural sector. Its name and brand (the Fairtrade Label) are owned by Fairtrade International and only companies certified against Fairtrade Standards can use it and apply the label on their products. Fairtrade is an ethical certification system which aims to promote more equality and sustainability. All farmers and traders are annually audited to ensure compliance.
Fair Trade (two words) refers to the concept of ethical trading and therefore refers to all initiatives that work to achieve it.
Direct trade is a form of sourcing practiced by some coffee roasters, referring to direct sourcing from farmers, with standards varying between producers. Advocates of direct trade practices promote direct communication and price negotiation between buyer and farmer, along with systems that encourage and incentivise quality. There is no agreed definition of the term, and, unlike Fairtrade coffee, there is no third party certification that the conditions stated by the coffee buyers are being complied with. The term was pioneered by the collective efforts of Intelligentsia Coffee & Tea and Counter Culture Coffee.
Relationship Coffee was coined by David Griswold of Sustainable Harvest in 2000 and has since become a popular way to describe coffee purchasing practices. Relationship coffee is a long-term agreement between a green coffee buyer and a farmer that seeks to transcend market fluctuations and eliminate middlemen. Relationship coffee should always involve a direct, face-to- face interaction between the farmer and the roaster based on trust and transparency.
All the above seek to achieve the same goal; to trade fairly and directly with coffee producers to ensure better prices are paid and higher quality coffee is produced while protecting the environment.
As usual, the devil is in the details, and these certifications and descriptions are often misrepresented, misused, and misguided.
Most coffee drinkers today assert their desire to support ethically produced and purchased coffee. The market exists and many are more than willing to pay a little extra to ensure that the purchase of their beans has not hurt others. The question is: how do you know that what the roaster says is happening is actually happening? The talk is easy and often enticing. The action is difficult and often expensive.
So who should hold who accountable?
Fair trade (two words), direct trade, and relationship coffee rely on trust. Roasters attempt to earn the trust of the consumer regarding how they purchased their coffee. This is a task requiring time, transparency, and communication. Don’t shy away from asking your favourite coffee provider the hard questions. If they claim to practice fair trade, direct trade, or relationship-based buying they must be ready to provide the evidence. There are no standards, there is no audit; there is only their word and these roasters must be prepared to answer the following questions:
- Where is this coffee from and who produced it?
- How was this coffee produced and how was it purchased?
- Who is benefiting the most from the transaction?
- When did you last visit or talk to the producers of this coffee?
Many roasters do practice what they preach and will have no problem answering the above questions and telling you the story of the coffee and the people who produce it. In fact, they want you to ask!
Certifications are designed to help consumers identify and understand the purchasing process behind a product. The benefit of Fairtrade Certified coffee is that when you see the Fairtrade Label on a bag you know that the buying practices have been checked and verified. It is near impossible for a roaster to use the Fairtrade logo without an audit and verification taking place first. The roaster selling Fairtrade Certified coffee has often not visited the producers or even talked to the producers but that is not what they are claiming. Fairtrade is about the price paid for the coffee, the percentage of that price that the farmer receives, and the third party verifying it. Some roasters of Fairtrade Certified coffee combine the label with a direct relationship but some don’t. As a coffee consumer, when you see the Fairtrade Mark, your first three questions are already answered.
Fairtrade certifies cooperatives; groups of small-holder farmers who form an organisation to improve their quality and market accessibility with an elected leadership. A cooperative will apply to be certified at a cost of € 525 after which an audit and inspection will take place at the cooperative. Audits vary in length and cost depending on the size of the cooperative. An average size cooperative will be charged approximately € 2500. A decision is then made by FLO-Cert and the certification either approved or denied. Cooperatives who do not receive the certification are provided with reasons and options for earning future certification. If approved, the coffee produced and sold from the cooperative is now Fairtrade Certified. Audits continue on an annual basis to ensure the Fairtrade Standards are adhered to.
Fairtrade does not certify companies or roasters. Those purchasing and selling Fairtrade Certified coffee become Licensees and are licensed to use the Fairtrade label on their packaging and for marketing purposes. Fairtrade licensees are also subject to annual audits, pay an annual license fee to Fairtrade International, and a quarterly amount (2% of revenue) to Fairtrade South Africa based on the quantity of Fairtrade Certified coffee sold.
There are costs involved in becoming a Fairtrade Certified cooperative and there are costs involved in selling Fairtrade Certified coffee. However, the benefits far outweigh the costs. When asked, Fairtrade Certified cooperatives talk about the money they receive from selling Fairtrade coffee and not the costs involved in becoming certified and maintaining their certification.
When a farmer sells Fairtrade Certified coffee they are paid at least the Fairtrade minimum price of $1.40 per pound. Currently the New York Commodities Exchange Futures’ coffee price is $1.14 per pound. Producers selling their coffee will generally just get paid the market price whereas certified coffee would fetch them the minimum price. Many South African roasters are purchasing specialty coffee which would sell at a higher price than market price so the argument might be that the Fairtrade certification is unnecessary because the farmers are already receiving an above market price.
However, what the Fairtrade Certification does offer is the second payment of $0.20 per pound which the buyer or roaster pays. The cooperative uses $0.15 for community projects and social development and $0.05 for quality and productivity improvements. And this is where the real difference comes.
The second payment allows coffee producers to be more active in their communities by building classrooms or establishing electricity. It also allows producers to improve the quality of their coffee through the building of cupping laboratories and processing facilities. How the second payment is used is decided democratically by the members of the cooperative. One of the purposes of the annual Fairtrade audit is to ensure that the second payment is declared and distributed correctly.
Fairtrade is not perfect. As with most things in life, it is a system developed by people and run by people and the human element is far from flawless. However, the intention to make a difference in producing countries through trade is at the forefront and although Fairtrade may not always succeed it is definitely making an impact in many lives.
I am a supporter of fair trade, Fairtrade, direct trade, and relationship coffee as long as what the roaster claims is taking place is truthful and transparent. Don’t trust the word of your roaster, regardless of a label on a bag, ask questions, start a conversation, and listen to the story. It doesn’t matter what the coffee purchase is called provided the process and the price paid is transparent and the coffee tastes good.