Does Buying Fair Trade Help Farmers?
Does Buying Fair Trade Help Low Income Farmers?
Fair Trade aims to create a sustainable and fair marketplace for producers in developing countries. There are a few organizations that will certify products as fair trade. Fairtrade International commonly certifies coffee with a Fairtrade sticker. This image of a person waving with a blue and green background has become synonymous with better working conditions. Fairtrade International is a third-party non-profit organization. You’ll find this Fairtrade certification on a handful of products. When it comes to coffee, most research concludes that Fairtrade creates little if any positive outcome to the most needy farmers.
Fairtrade International does not require any additional traceability, ethical, or sustainable requirements from farmers. The main benefit and requirement is that farmers are paid slightly more per pound of coffee. Buying Fair Trade coffee increases a farmers income per pound slightly, but there is more to the equation.
The C-market price is the going rate per pound of coffee. A Fairtrade certification requires that a farmer be paid the C-market price or $1.40 per pound (Fairtrade Minimum), whichever is higher, plus $0.20 per pound (Fairtrade Premium).
The Fairtrade minimum does help protect farmers when the C-market price drops. Over the past 10 years, the C-market price was under $1.40 about half the time. Is $1.40 per pound good money for a farmer? On average, the cost of production for a farmer is between $1.15 and $1.40 per pound.
The promise of higher income per pound is nice, but there are hefty certification fees for farmer to pay. Fairtrade International does not publicly share the application cost or yearly fees. According to research, the minimum total fees a farmer or participating organization pays the first year $3,500.
Poorer farmers from countries that stand to gain the most from higher wages often cannot afford this fee. This leads to Fairtrade certifying farmers from wealthy countries disproportionally to poorer ones.
There is no guarantee that a farmer's Fairtrade coffee is sold at Fair Trade prices. As of 2018, only 28% of Fairtrade coffee was actually sold as Fairtrade Certified and received Fairtrade prices. This means that a farmer in an emerging market may lose money by becoming certified and failing to sell their products.
Our conclusion, Fair Trade helps some farmers make more money some of the time. Fair Trade certifications have their place, and we think it’s a good start.
Some of the bags on Coffee Medley have a Fair Trade label. Please understand that most coffees on Coffee Medley go above and beyond Fair Trade thanks to the efforts of our roasters.
What About Direct Trade?
Direct Trade or Direct Supply is a movement that began years ago by well-intentioned roasters. There isn’t an agreed upon definition for Direct Trade or Direct Supply.
Anyone can call their coffee Direct Trade. Direct Trade sounds great to an uninformed consumer, but there’s no teeth behind it and no requirements.
Initially, Direct Trade represented working directly with the farmer, making multiple visits a year, assuring ethical work conditions and above average wages. Some roasters continue to label their coffee Direct Trade and follow through on these promises. Other roasters follow through on these promises, but do not label their coffee Direct Trade.
There is a subset of roasters who label their coffee Direct Trade, but neglect to follow any of the above suggestions. There isn’t a governing body that will remove the Direct Trade term from their bags.
What’s the Best Way to Purchase Coffee That Treats Farmers Responsibly?
Unfortunately, there isn’t a simple solution. In our opinion, a concerned consumer should review a roaster's transparency report. Many of our roasters have transparency reports that clearly show they pay up 3 to 4 times the C-market price for coffee and ensure multiple trips a year to visit farms.
If you don’t have time to review each roaster's transparency report, you can rest assured that we work hard to sell from roasters that put in extra effort and work ethically with farmers.
One of our favorite examples of a roaster treating farmers fairly is Saint Franks Bonaventure Project. You can read more about it directly on Saint Frank's page.
You Do You,