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Fair Trade & Shade Grown Organic Coffee--A Growing Movement

Justice and Java: Coffee in a Fair Trade Market

This article is taken from the September/October 2000 NACLA Report on the
Americas about Fair Trade. In case you're not familiar with NACLA,
it's a wonderful progressive journal reporting on current struggles in
Latin America. A subscription is $32/year for individuals and it is well worth it - call
212.870.3146. Their current issue gives an overview of the situation in Colombia and is
highly recommened.
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Sip a steaming brew at Starbucks, and you might associate coffee with
prosperity. The image of carefree consumers enjoying $3 lattes seems totally
unrelated to that of coffee-bean farmers and workers, who live with grinding
poverty, illiteracy and a long legacy of economic colonialism. But the two
groups are part of an intricately related system that has existed for
centuries, leaving coffee harvesters immiserated, and coffee drinkers mostly
unaware to the suffering that goes into making their beverage.

But a movement is growing among coffee consumers to demand justice for
coffee workers and farmers. In several industrialized countries-including
the United States-activists have been putting grassroots pressure on big
coffee retailers such as Starbucks to buy directly from cooperative farmers
and pay them a price that represents a living wage. Because of the new
movement, Starbucks has just begun offering millions of consumers a choice:
between coffee produced under sweatshop conditions, and a product based on
principles of fair trade.

Indeed, Fair Trade is the name of the movement, and its time has come.

Coffee is the world's second most valuable market commodity after petroleum,
and U.S. consumers drink one fourth of the beans traded in the global
market. Coffee is a significant source of foreign exchange for many Latin
American countries and has played a major role in the political histories of
nations such as Mexico, Colombia, Guatemala, and Brazil. It was
traditionally developed as a colonial cash crop, planted and harvested by
serfs or wage laborers on large plantations, then exported to imperial
countries.

In its natural, shaded habitat, coffee is a sustainable crop. In the
mid-20th century, however, with the advent of the Green Revolution-an
agribusiness-oriented scheme that pressed high technology on traditional
farmers-varieties of high-yielding coffee were pursued. In the 1970s the
United States Agency for International Development (USAID) gave over $80
million to coffee plantations in Latin America to "modernize"-to strip
coffee of shade trees and purchase chemical pesticides and fertilizers. This
has led to severe environmental problems, such as contamination of air and
water through pesticide poisoning. Deforestation has also become a major
threat to migratory songbirds because of habitat destruction, which has led
to consumer demand for organic and shade grown coffees.

Farmers, many of them indigenous peoples, grow most of the world's coffee
beans on plots of less than 10 acres. The prices they often receive are less
than the costs of production, which pushes them into an endless cycle of
poverty and debt. All over Latin America, farmers are forced to sell the
future rights to their harvest to exploitative middlemen in exchange for the
credit they need to pay for basic necessities. The world price is set on the
New York "C market"-the section of Wall Street that deals in sugar, cocoa
and coffee. While severely volatile, the C market price for coffee has
hovered around $1 per pound since the collapse of the International Coffee
Agreement in 1989. Farmers in over 50 nations are hostage to this
speculative market. They generally receive less than half the C market
price, or between 30 and 50 cents a pound for coffee that retails for as
much as $10. That rate earns a family an average of only $600 a year.

Coffee is also grown on large plantations worked by landless day laborers
with low rates of unionization and extremely poor working conditions. In
1995, as a result of pressure from the US/Guatemala Labor Education Project,
Starbucks drafted the first Code of Conduct for coffee suppliers, but they
have yet to implement it. Starbucks refuses to disclose the location of the
plantations from which it buys, making independent monitoring impossible. A
recent study by the Guatemalan Commission for the Verification of Corporate
Codes of Conduct found half the workers on fincas in that country earning
less than $3 per day for picking 100 pounds of coffee. Workers also were
subject to forced overtime without compensation, and usually did not receive
their legally-mandated benefits. Coffee workers are denied basic labor
rights not just in Guatemala, but worldwide, and efforts to develop an
industry-wide Code of Conduct are underway.

Fair Trade offers a mechanism for small farmers to receive higher prices as
an alternative to the "tyranny of the C market". To have their coffee
certified as Fair Trade, importers must satisfy strict international
criteria and submit to independent monitoring by TransFairUSA, the new
certification agency based in Oakland, California. The most important
requirement is a minimum price of $1.26 per pound, paid directly to
organized farmer cooperatives-not to middlemen. Fair Trade importers also
must provide farmers with credit at fair terms and commit to long term trade
relationships.

The recipients of fair trade benefits are some 500,000 farmers organized
into 300 cooperatives in 20 countries in Central and South America, Africa
and Asia. One such group, PRODECOOP, is based in Esteli, Nicaragua. It was
founded in 1993 and boasts over 2,420 families. PRODECOOP has undertaken
projects such as building schools and healthcare centers as well as training
in production techniques and legal matters. From sales to the fair trade
market, farmers earned $600,000 over the regular market price for their
coffee last year. The income is used to pay bank debt and thus avoid loss of
land, to purchase the cooperative's own mill, and to increase the quality of
the coffee.

Another Fair Trade cooperative, in Oaxaca, Mexico, is the Union of
Indigenous Communities of the Isthmus Region (UCIRI). Established in 1982,
it has more than 5,000 families who farm roughly 15 acres each. UCIRI has
helped create the region's only public bus line; a farm supply center;
healthcare services; cooperative corn mills; an agricultural extension and
training program; and the region's only secondary school. In contrast to the
assumption that upping prices paid for cash crops might induce farmers to
increase export dependence, experience has shown that farmers are more
likely to use the additional incomes they gain from the Fair Trade market to
invest in projects that increase food security.

Fair Trade clearly makes sense for farmers: As Merling Preza Ramos,
PRODECOOP's director, recently put it, coffee producers are asking only "to
be paid a fair price (This isn't charity) Behind a cup of coffee there are
faces and people. People who are working to produce good coffee."

The idea of marketing fairly priced products from cooperatives is not
entirely new, particularly for people who were sympathetic to Central
America's revolutionary movements of the 1980s. At that time, solidarity
activists and organizations, such as the Boston-based group Equal Exchange,
were importing and selling small amounts of Nicaraguan coffee to support
that country's Sandinista movement, and paying farmers fair prices. Their
support made the difference in many cooperatives keeping rather than losing
their land when the Sandinistas lost power in 1990. The Fair Trade
Federation, the national association of fair trade retailers and
wholesalers, boasts over a hundred business members that import or market
crafts with the primary motive of supporting cooperative producers with fair
prices.

The situation was similar in Europe, whose long, explicit history of
colonialism has left more of the population aware of how their countries'
economic policies have aggravated poverty in the Global South. European
fair trade efforts originally focused on operating alternative retail stores
that sold folk crafts. Currently, Europe has about 3500 such stores.

In 1988 fair trade advocates realized that producers of basic agricultural
commodities faced tremendous disadvantages in the global market as their
'terms of trade' (the value of their products related to other goods)
continued to decline - and that developing a Fair Trade market could be a
solution. The effort to bring the Fair Trade concept to mainstream
commodities and markets originated in Europe through a Dutch organization
called Max Havelaar, the original fair trade monitoring organization. The
name comes from the title of a book about Dutch colonial exploitation of
Indonesian coffee workers at the turn of the century, whose popularity
garnered Dutch support for labor reforms. Fair Trade advocates pressured
existing coffee companies to abide by Fair Trade criteria and carry the Max
Havelaar label, which now enjoys wide recognition all over Holland. Max
Havelaar later added sugar, cocoa, tea, honey and bananas-historically
colonial cash crops-from cooperatives in former colonies. More countries
took on the concept and changed the name to TransFair, and in 1997
incorporated into Fair Trade Labeling Organizations International (FLO),
which now has branches in Canada, Japan, and 15 importing countries in
Europe.

The concept of "mainstreaming" fair trade took off in the United States in
1998, with the formation of TransfairUSA, this country's branch of FLO. Paul
Rice, TransFair's Director, spent over ten years working with coffee
cooperatives in Latin America and realized that building a Fair Trade market
was more sustainable than other development projects. TransFair reasoned
that it could appeal to "specialty" coffee consumers: buyers who pay top
dollar for top-quality Arabica beans. Arabica coffee retails for about $10 a
pound and comprises 15 to 25 percent of the total coffee market. TransFair's
research showed that people who pay $10 a pound for coffee would not mind
adding a dollar more to guarantee a fair trade price to small coffee
farmers.

TransfairUSA began its efforts in late 1998 by producing a video about
coffee farmers, Santiago's Story, then launching a Bay Area campaign to
convince coffee roasters of the benefits of Fair Trade for their businesses.
They have branched out nationally and to date there are over 50 roasters and
coffee importers that have voluntarily agreed to abide by Fair Trade
criteria and submit to monitoring by TransFairUSA.

Global Exchange got involved with Transfair USA as an outgrowth of the 10
years we have spent promoting Fair Trade through our Bay Area craft stores.
We believe that as we criticize free trade and corporate globalization for
its lack of democracy and exploitation of poor people around the world, we
also need to promote our own vision of a global trade system based on
economic justice. As this country's first product country with an
independent monitoring system to ensure against sweatshop-style labor
abuses, coffee represents an important alternative model to the free trade
practices advocated by the iron triangle of the global sweatshop economy:
the World Bank, the International Monetary Fund (IMF), and the World Trade
Organization.

Global Exchange initiated a public education-for-action campaign in summer
1999, and currently we are building a network of activists, church groups,
students, labor unions, and environmentalists to increase consumer demand
for Fair Trade coffee in our own communities. In the Bay Area, we have
successfully lobbied city councils in San Francisco, Berkeley and Oakland to
limit those cities' coffee purchases to brands that are Fair Trade Certified
and usually organic. The Santa Cruz city council later followed suit. We
helped host a farmer from Esteli, Nicaragua-San Francisco's Sister City-for
an event with San Francisco Supervisor and living wage advocate Tom Ammiano.
After many hours of volunteer public education efforts and solid media
coverage, the Bay Area now boasts over 100 retail outlets for Fair Trade
Certified coffee, up from four when we started a year ago.

Branching out nationally, in fall 1999 we laid the groundwork to help
community activists and college students coordinate Fair Trade coffee
campaigns. We now have a network of over 50 groups, mostly on campuses such
as University of Chicago and Columbia, where students are working to pass
purchasing restrictions at those institutions for fair trade coffee. Efforts
have already been successful at UC Davis, College of the Atlantic, and SUNY
Binghamton. Meanwhile, the Student Alliance to Reform Corporations, United
Students Against Sweatshops, and the Student Environmental Action Coalition
have participated in Fair Trade Certified coffee activities across the
country.

Perhaps our most dramatic campaign has been focused on Starbucks. We chose
Starbucks because it is the largest specialty coffee retailer, with a fifth
of all cafes in the country. In the fall of 1999, Global Exchange approached
then CEO Howard Schultz and requested that Starbucks offer Fair Trade
Certified coffee in all its stores. The company was initially very hesitant,
alleging the beans were of low quality. Shortly thereafter, we organized
several peaceful demonstrations in front of Starbucks stores in Seattle.

In February 2000, an investigative report by San Francisco's ABC TV
affiliate exposed child labor and scandalously low wages on Guatemalan
coffee plantations, some of which sell coffee to Starbucks. Immediately
after the program aired, we organized a local protest. We then petitioned
Starbucks stockholders at their annual meeting in Seattle to offer Fair
Trade Certified coffee. That same week, the company announced a one-time
shipment of 75,000 pounds of Fair Trade coffee. We responded that for a firm
as big as Starbucks, this represented a "Drop in the Cup"-an average of only
about 30 pounds per store-and the coffee was not certified! We then
circulated an Open Letter, signed by 84 student, environmental, church, and
social justice organizations, again asking Starbucks to pay farmers a living
wage and offer their customers Fair Trade Certified coffee. We helped plan
30 demonstrations that were scheduled for April 13 across the country at
Starbucks shops. Meanwhile, hundreds of people faxed letters to Starbucks
from our website or sent postcards asking the giant retailer to pay farmers
fair prices.

Three days before our scheduled demonstrations, Starbucks announced an
agreement with TransFairUSA to offer Fair Trade Certified coffee at all its
stores nationwide, beginning this October. They will also be developing
educational materials and training for coffee bar workers, so that millions
of consumers can learn about Fair Trade. This is a huge victory for farmers,
whose incomes will triple when they can sell their coffee at Fair Trade
prices. It is also an important win for the corporate accountability
movement. Starbucks' quick capitulation in the face of nationwide protest
illustrates that grassroots organizing and education can indeed bring major
results.

But so far, Starbucks has agreed to offer Fair Trade Certified coffee in
whole bean form only: it will be available in take-home bags, but not brewed
in the cafes. As soon as the beans are on Starbucks' shelves, however, we
will be pressuring the company to offer Fair Trade Certified coffee in
brewed, in-store drinks. We will also continue encouraging Starbucks to sell
Fair Trade coffee on campuses and to increase their purchases generally.

Americans seem ready for this new way of doing business. In a recent
BusinessWeek/Harris poll, 51 percent of Americans interviewed said they
support fair trade rather than protectionism or "free trade." Even the
Specialty Coffee Association of America (SCAA) recently officially endorsed
Fair Trade Certification, and has formed a task force to determine ways to
promote it. The anti-sweatshop movement has struggled for years to answer to
the consumer question, "I'd be happy to stop buying from Nike or GAP, but
what should I buy instead?" As coffee demonstrates, the key to success is to
educate consumers that another product exists, and to mobilize citizens to
demand it. When it comes to our daily brew, an independently monitored
alternative finally exists-one that sets a standard for fair trade in the
global economy.

For more information on how to locate stores and cafes that sell Fair Trade
Certified coffee; how to request that retailers stock the product; how to
start a local Fair Trade campaign; or to learn about Global Exchange's
upcoming (January 2001) Reality Tour to Costa Rica and Nicaragua, Fair Trade
and Free Trade: An Integrated Look at Coffee, Bananas, and the Effects of
Globalization, contact:
Global Exchange
deborah@globalexchange.org
415.255.7296 x245
www.globalexchange.org/economy/coffee
or
TransFairUSA
paul.rice@transfairusa.org
510.663.5260 www.transfairusa.org

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