OCA & Global Exchange on Fair Trade Coffee,
Starbucks, & Globalization

Fair Trade Coffee: Coming to a Cafe Near You
Tamara Straus, AlterNet
November 30, 2000

Here's a breathtaking statistic: The $3 many Americans shell out every day
for a latte at Starbucks is equivalent to the daily wage of a Central
American coffee picker. Nonplussed? Here's another heart-stopper, specially
designed for the non-gourmet coffee drinker: Those $3.95 cans of Maxwell
House and Folgers you pick up at your local supermarket, well, the beans
that fill them are bought for around a quarter and come from corporate
farms that use environmentally poisonous pesticides and clear-cut forests
to produce the highest possible yields.

This may just serve as more fodder for those already sufficiently
demoralized by the practices of big business. But what is interesting about
such stats is they are being used to create a new American political
animal: the ethical consumer.

True, the ethical consumer may pale in comparison to the do-gooders of old
-- the abolitionist, the suffragist, the fighter for civil rights or no
nukes -- since his primary act is figuring out how to ethically empty his
wallet. Yet considering multinational corporations like Microsoft have
annual revenues higher than the GNP of most countries -- and deregulation
in the U.S. is on the rise -- ethical consumerism may be the best political
weapon Americans have got.

Enter Fair Trade Coffee

Consider the example of fair trade coffee or "politically correct coffee,"
as Time magazine has dubbed it. Fair trade coffee sells for a minimum of
$1.29 per pound -- which goes directly to coffee farmers, not to "coyotes,"
the middlemen who pay farmers usually no more than 35 cents a pound. It is
grown on small farms, which tend to cultivate in the traditional way: under
the rainforest canopy and without pesticides. And because fair trade coffee
has doubled farmers' annual incomes, more than 500,000 people in 20
developing nations are now living above the poverty line.

Nothing wrong with that. Indeed, those who hear about the benefits of fair
trade coffee tend to support it. The only problem is that a nationwide
advertising campaign is needed to get the word out, and large coffee
retailers -- the ideal candidates for such an effort -- will not do it,
since buying coffee at fair trade prices would cut into their profits.

"Oh, it's the same old story again," you might say. "Good ideas, impossible
to implement." But what is different about the fair trade coffee campaign
is that, thanks to a coalition of nonprofits, good ideas are being
implemented using ethical consumerism as a bargaining chip.

Dutch Innovation

The story of fair trade coffee begins in 1988, in Holland, motherland of
the international human rights movement. A group of fair traders selling
coffee and other products at a crafts market decide to create a fair trade
seal -- a label that will let customers know the product was bought at a
decent price. They call the seal Max Havelaar after a best-selling 1860
book about the exploitation of Javanese coffee workers by Dutch merchants.
In doing so, the traders remind their countrymen that coffee is a commodity
tied to the history of colonialism.

In the same year, the Fairtrade Labeling Organization (FLO) is founded, an
umbrella institution for European certification organizations like Max
Havelaar, which have begun to help coffee farmers create fair trade
cooperatives and connect them to retailers in the North. During the next
decade, FLO's members draw a whopping half million farmers. The reason?
Coffee farmers receive a tripled per pound price and FLO's arrangement
eliminates their dependence on middlemen.

The farmers' end of the bargain is also relatively simple. In exchange for
letting TransFair England, for example, inspect their farms and collect 10
cents per pound on coffee sold, coffee farmers get the right to use the
fair trade logo.

By 2000, FLO's efforts are a success. Fair trade coffee cooperatives have
spread from Guatemala to Indonesia, and the TransFair certification seal is
found in 16 European countries as well as Japan and Canada. Worldwide, over
100 fair trade coffee brands are sold in approximately 35,000 markets.
Organic fair trade coffee is also on the rise, as farmers are using their
increased incomes to cultivate coffee without chemicals.

America the Late

Where were Americans during all this time? you might ask. Well, for one,
wasting time over cups of joe. Americans consume an estimated one-fifth of
all the coffee trade, making it the largest consumer in the world.
Moreover, as anyone who lives near a Starbucks outlet knows, Americans have
developed a yen for gourmet coffee, for cappuccinos and lattes and decaf
mocha frappes.

This is the main reason Paul Rice, who worked with coffee farmers in
Nicaragua for 11 years, founded a U.S wing of TransFair in the summer of
1999. "I just took the next logical step," says Rice. "In Nicaragua I saw
fair trade coffee cooperatives find markets in Europe, and I assumed the
same could be true for the U.S."

Rice started local. FairTrade USA's headquarters in Oakland, Calif. meant
it could take advantage of the San Francisco Bay Area's historic gourmet
coffee tradition and liberal politics. Within four months the Bay Area's
reputation proved true: 12 local roasters signed up to sell fair trade
coffee. Today 35 fair trade brands are available in 122 Bay Area
supermarkets and cafes. The City Councils of San Francisco, Oakland and
Berkeley also have passed resolutions to support the sale of fair trade
coffee.

Fair Trade Frappaccinos?

But fair trade coffee advocates' real coup did not come until April 2000,
when Starbucks, which controls 20 percent of the U.S. specialty coffee
industry, agreed to carry fair trade.

Of course, the agreement did not come without a fight. At first Starbucks
refused to carry fair trade, explaining that until there was consumer
demand it could not sell the politically correct bean in its 2,300 stores.
But after being subject to a year-long campaign organized by Global
Exchange, a San Francisco-based human rights organization -- a campaign
that eventually culminated in plans to stage protests at Starbucks in 29
cities -- the retailer decided to avoid a public relations nightmare and
sell the beans.

"Fair trade gets the benefit back to the family farmer," said Starbucks
vice president David Olsen shortly after the decision was made. "It is
consistent with our values."

Starbucks' decision to sell fair trade coffee, however, does not mean the
company will brew it in their stores. This will depend on "consumer
demand," say Starbucks corporate heads. So, once again, this will mean that
Global Exchange and other fair trade coffee advocates will have to prove --
through a combination of grassroots organizing, educational outreach and
threat of protest -- that a demand exists.

Deborah James, fair trade director of Global Exchange, says that consumer
demand is not the chief problem. "Since fair trade became available at
Starbucks in October," she says, "consumers have told us that they are
buying it by the pound and that they want to see it as a 'coffee of the
day,' something that Starbucks, it seems, will not do."

Alan Gulick, Starbucks' public affairs director, says the reason Starbucks
does not serve fair trade as a daily brew is because "the volume of fair
trade coffee needed in not available." Yet, according to Nina Luttinger,
communications manager of TransFair USA, there is evidence to the contrary.
She reports that in 1999 of the 60 million pounds of fair trade coffee
produced globally only half sold on the fair trade market.

"This meant that farmers had to sell their product through the usual
channels and got paid much less," says Luttinger, who doubts that the fair
trade coffee sale figures will be drastically different in 2000.

Is Fair Trade Just for Gourmands?

Still, Starbucks introduction of fair trade coffee is a victory for the
movement. And the victory extends beyond the creator of the Frappaccino.
During the 18 months fair trade coffee has been available on the U.S.
market, the number of retailers has grown from 400 to 7,000, according to
Paul Rice. In November Safeway, the supermarket king, launched fair trade
coffee in 1,500 of its stores nationwide -- a decision Rice says came about
not through threats of protest but through the supermarket's "enlightened
self-interest."

"Companies are coming to me now," says Rice. "And some, such as Choice
Organic Teas, have decided to eat the cost of buying fair trade rather than
raise prices. They want to support fair trade, introduce it to their
customers and figure losing a few cents now is worth it."

But what about the big guns of the coffee industry: Nestle's, Folgers,
Maxwell House? "I think it's going to be a challenge to convince companies
who are paying less than 50 cents and selling it for around $4 that they s
hould pay $1.29," says James. "Fair trade coffee successes so far have all
been in the gourmet coffee industry."

This fact makes activists in the ethical consumer movement cringe. For it
raises the question of how wide the movement can be. Will enough Americans
care about labor conditions in the Third World and the environmental
problems created there by American coffee corporations to force real change
in the industry? Will they, as James has decided, "never voluntarily put
someone in a situation of poverty, exploitation and debt just to enjoy a
cup of joe."

You may say no, but activists like Ronnie Cummins, national director of the
Organic Consumers Association, argues Americans have little choice: "We
have an obligation to the environment, we have an obligation to human
rights, to drive unsustainable coffee off the market. We need to reach that
point, like when it became socially unacceptable to buy products from South
Africa because of Apartheid."

The Fair Trade Pitch

How fair trade advocates will accomplish this sort of mass educational
outreach depends on their mission and point of view. Rice, who works
directly with coffee retailers, argues that the introduction of fair trade
in the American gourmet coffee industry is having a domino affect.
"Corporations realize they must meet the demands of their customers," says
Rice. "And if their customers want fair trade, they provide it."

James, whose organization Global Exchange is focused on international
social justice issues, believes consumer knowledge about globalization is
the key. She and her colleagues have tied coffee farmers' work conditions
to the more familiar issue of sweatshop labor.

"We call non-fair trade coffee 'sweatshop coffee' because many Americans
know about sweatshop conditions in Asia and Mexico," she says. "They know
the people who make Nike sneakers and Gap t-shirts are paid inadequate
wages and work in unhealthy conditions."

Cummins, whose Organic Consumers Association is devoted largely to environ
mental issues, also uses the term sweatshop coffee in its activist
literature. But he also tries to get consumers to think about agricultural
and environmental sustainability.

"I tell people that the way coffee was grown for hundreds of years had a
low impact on the environment," says Cummins. "And that with sun-grown
coffee -- the 'innovation' of the international coffee cartel -- what you
do is chop down everything and use a lot of chemical fertilizer, pesticides
and so on. In essence, you destroy the environment."

European Sophistication

Activists like James and Cummins have wondered why Europeans are ahead of
Americans in bringing fair trade to market. Since 1998, seven different
products -- coffee, tea, chocolate, bananas, honey, sugar and orange juice
-- have been available with the fair trade label in Europe. Fair trade
products were also available in Japan and Canada before the U.S. Why are we
were behind?

"In Europe the media's better," says Cummins. "The political system is
based on proportional representation. There are the same number of people
here as in Europe who support Green Party ideas; the difference is they
have 10 percent of the seats in the European parliament and we have no
seats in Congress."

Cummins adds there is mass support for organic food -- and mass antipathy
toward chemically altered or genetically engineered food -- because of
Europe's Nazi past, which makes people extremely wary about a super race of
anything or genetic enhancement. The recent outbreak of Mad Cow disease is
also an undeniable factor.

"We just can't comprehend what it feels like to know that you might die
because the government lied to you about industrial agriculture practices,"
says Cummins. "Europeans now say: 'Never am I going to just accept
something because establishment science and the government tell me it's
safe.'"

As for a more sophisticated understanding of globalization, James says
Europeans are ahead because they are able to tie the lessons of their
colonial past to today's global future.

"Europeans have a direct understanding that the system of agriculture we
have now -- where farmers are exploited and their products are unfairly
sold -- is based on a colonial system," she says. "Whereas in the United
States we do not feel responsible for the fact that in the Winward Islands
of the Caribbean people there are entirely dependent on banana plantations
because we put them there."

James would like to link non-fair trade coffee to the history of
colonialism or the concept of "neo-colonialism," but she says, "If you
bring up the word colonialism or imperialism here, people have no idea what
you're talking about."

The Future of Ethical Consumerism

Although Americans may be somewhat blind to history, polls show they are
awake to the present. According to a December 1999 US News & World Report
poll, 6 in 10 Americans are concerned about the working conditions under
which products are made in the United States and more than 9 in 10 are
concerned about working conditions under which products are made in Asia
and Latin America.

This is good news for ethical consumerism. It shows that consumer choice
based on criteria of economic justice and environmental sustainability has
a future. But does it mean that ethical consumerism can grow beyond the 50
million Americans who supposedly practice it? Can ethical consumerism --
without government support and positive mainstream media attention -- be
viewed as something other than the ultimate knee-jerk liberal issue?

Argues Ronnie Cummins: "It's a very good historical trend that consumers
are becoming more aware, but unless trade unions and churches, consumer
groups and environmental groups work together -- North and South -- we're
not going to solve this problem. Sure, we can alleviate some of our bad
conscience on a day-to-day basis, but that's not getting to the root of the
problem, which is unchecked globalization. Even if you can produce cheaper
in China the hidden costs of doing something like that are pretty darn
convincing."

Take Action! Ten Things You Can Do for Fair Trade Coffee

For more information about TransFair USA go to www.transfairusa.org.

For more information about Organic Consumers Association go to
www.organicconsumers.org.