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Trouble Brewing for 'Fair Trade' Coffee - 2004-04-21

There's a disagreement brewing among advocates of so-called "Fair Trade" coffee. This is coffee grown by farmers who have agreed to use environmentally and socially responsible agricultural methods. In exchange, they're paid a price for their commodity that's considerably higher than the market rate. The Fair Trade Movement has seen a lot of growth in the last five years. However, some independent roasters in the United States believe that growth has taken the movement in the wrong direction.

It's was a rainy weekday afternoon in Brooklyn, New York. At the Gorilla Coffee House in one of the city's up-and-coming artistic neighborhoods, shop owner and manager Darlene Scherer grinds a bag of Brazilian Fair Trade coffee for a customer.

"Brazil is probably our most popular coffee," she said. "It's versatile. It's kind of chocolatey. It's what we pull for espresso."

All of the coffee and tea sold at the Gorilla Coffee House is Fair Trade. Darlene Scherer said she wanted to make a complete commitment to the Fair Trade philosophy when she opened her shop last July. So then how does she know that the coffee she sells has been organically grown by a company that respects workers' rights and that the coffee growers have been paid a just price for their product?

"I just leave it up to TransFair USA, which is the American labeling organization that certifies that it was bought in this way," she said.

TransFair USA is the American arm of a 17-member international organization that brokers deals between coffee roasters and plantation owners. There's a TransFair Canada, a TransFair Italy, a TransFair Japan. All of these groups work exclusively with farmers who have had their plantations evaluated and certified by the Fair Trade Labeling Organization (FLO) based in Bonn, Germany. Haven Bourque is the marketing director at TransFair USA.

"They make sure that strict international labor standards are met," she said. "In other words, there is no child labor whatsoever in the model. Men and women are paid equally for equal work. They also ensure environmentally protective farming techniques. So they make sure that the 'dirty dozen', those twelve, worst pesticides are never used on FairTrade farms."

FLO certifies the plantations and then TransFair makes sure the farmers get a good rate. Right now, the wholesale price for Fair Trade coffee is about $1.26 a pound. That's 75 cents more than what a farmer can get for it on the open market. Haven Borque says about 5.5 million kilograms of Fair Trade coffee were sold in the United States last year. She said that the amount has gone up considerably, as large, multi-national corporations like Starbucks and Dunkin Donuts have taken an interest in the Fair Trade movement.

"More and more U.S. consumers are concerned about social responsibility," she added. "They like to buy from companies whose values match their own. So these consumers would like to know that when they buy a Fair Trade espresso at a Dunkin Donuts, that the farmer on the other end of the deal got a fair price."

Unlike the Gorilla Coffee House, the big corporate coffee chains haven't made a total commitment to the Fair Trade movement. Only about two percent of the coffee sold at Starbucks is Fair Trade. Nevertheless, TransFair USA lets the corporation display the Fair Trade logo in all of its stores.

Larry Larson is the owner of Larry's Beans, an independent distributor in Raleigh, North Carolina. Fair Trade coffee is the only kind of coffee he sells. Recently, Mr. Larson and three other independent coffee roasters announced that they would be severing their ties with TransFair USA. Mr. Larson said that TransFair's logo has become nothing more than a marketing tool, and that when companies like Starbucks are allowed to display it in their windows, the logo confuses the consumer and hinders the Fair Trade movement.

"I don't want the multi-nationals to ride on my coattails," he said. "I've heard on dozens of occasions, where people have thought 'Isn't Starbucks all Fair Trade? I've seen that sign in their store.' And it's like, 'What? No, they have one item.' So again, where the system can be manipulated, and the consumer can be confused. So the consumer goes, 'OK, well I feel OK now about going to Starbucks all the time, because they're Fair Trade.'"

Larry Larson said that he still has a great deal of respect for TransFair USA, but he thinks the movement won't work if consumers are unsure where to spend their dollars, so in that sense, TransFair's current relationship with multi-national coffee corporations is self-defeating. Mr. Larson said that he'd like to see other independent coffee roasters join him in his exodus, but if the Gorilla Coffee House's Darlene Scherer is typical of most roasters, that won't be happening any time soon.

"It would be logistically hard, because, you know, I don't want to get that involved on that level," she sad. "Because it would be [involve] going to all these different farms and making sure that they were farming properly. I don't even have the expertise to show them what to do."

For their part, company officials at Starbucks insist all of their coffee is bought "fairly", even if 98 percent of it isn't certified as Fair Trade. According to the company's website, Starbucks pays an average of 69 cents more than the going market rate for a pound of coffee.