Fairtrade or Fairly Traded – Full Article

We get asked a lot why we don’t sell Fairtrade certified coffee, surely an ethical organisation like Urban Coffee would subscribe to the Fairtrade values. Well of course we subscribe to the values we just don’t believe that the Fairtrade brand is the best way of meeting these values.

Fairtrade has sold the myth that if you buy Fairtrade products you are helping farmers in the Third World; we don’t think the evidence for this stacks up and here is why:

What is Fairtrade?

Here in the UK, the Fairtrade Foundation was established in 1992, with the first products to carry the Fairtrade Mark launched in 1994. The Fairtrade organisation sets a minimum price that must be paid for Fairtrade-certified products. At various times the price of coffee paid to farmers has been below the cost of production, which in turn has forced farmers out of the market. The Fairtrade programme aims to prevent this by setting a minimum price.

Our issues with Fairtrade (the brand)

The Fairtrade body charges a license fee and spends most of it on marketing. It spends millions a year promoting the brand, receives subsidies from Governments, spends millions keeping its employees in swanky offices all around the world, spends millions on putting its employees in hotels.

Fairtrade disrupts a free market. In a free market if demand is high and supply is low you have a high price, and vice versa. Fairtrade puts a bottom on the market and so holds it up artificially at times when the market doesn’t need the supply of coffee at that level. The net result of this is that when the market price is down, farmers go out of business, except Fairtrade farmers who are guaranteed a price

Being Fairtrade-certified requires an annual inspection (for a fee). These inspections range from simple visits to requests for paperwork by post. The scheme does not verify wages paid to labourers and therefore does not guarantee individuals are being paid a living wage.

Fairtrade will only accredit the farmers if they give up their small business status and join together into a co-operative. There is evidence that the co-operatives are breeding grounds for corruption and abuse of workers. Co-operative leaders, who routinely get re-elected in fiddled votes, rake money from ordinary farmers, keeping them in the dark about their output’s true worth.

Market research suggests that British consumers are happy to pay 15p a cup extra for Fairtrade coffee. If they do, less than 0.5% reaches the farmer, or perhaps nothing at all.

In a Fairtrade co-operative all coffee beans are mixed together and sold on so there is no incentive for an individual farmer to increase their coffee quality. In fact this is a race to the lowest quality because you get the same price irrespective of quality.

The main issue

The main issue for speciality coffee companies like Urban Coffee is the quality of coffee. When the market price is high like it is today and has been for a number of years, farmers will choose to sell their coffee to private exporters rather than the Fairtrade co-operative because they will get a higher price than Fairtrade. They then sell their lesser quality coffee that doesn’t meet the quality measures of the private traders to the Fairtrade co-operative. So if you are buying Fairtrade coffee while the market price for coffee is high the chances are you are buying a lesser quality coffee.

Urban Coffee’s Answer

Fairly traded coffee, our coffee comes direct from farms rather than via co-ops so we know they are getting a good price. They get a good price because its high quality coffee – its that simple.

We are not alone in our thinking

The following roasters and coffee shops don’t provide Fairtrade branded coffee but do provide Fairly Traded coffee:

6/8 Kafe, Birmingham
Monmouth Coffee Company, London
Kaffeine, London
illy Coffee – Roaster
HasBean – Roaster
Square Mile – Roaster
Pollards – Roaster
Union Roasted – Roaster
Intelligentsia – Roaster

Geoff Watts, a director of Intelligentsia Coffee in the US, who believes the collectivisation of small farmers, which Fairtrade encourages, ‘disincentivises the hardest workers. In the end what you get is coffee that is solidly mediocre. ‘Intelligentsia Coffee has ended its partnership with Fairtrade and set up its own certification process.

Guardian Newspaper view
Telegraph Newspaper view
Dr Peter Griffiths – Why Fair Trade isn’t fair

Urban Emporiums | 30 Church Street, Birmingham, B3 2NP