Benefits And Issues Of Fair Trade Coffee
Coffee has been a necessity as well as an undying trend in the last few generations. According to Mcrindle, about three quarters of Australians drink at least one cup of coffee every day. But keeping aside the consumer’s perspective and enlightening the producer’s lifestyle, the reality is eschewed. One organization named fair-trade has stepped out to help the 125 million small livelihoods, but with its own share of assets and liabilities.
Fair-trade is a fair dinkum which was originally founded in 1946 to provide a means of trading for poor communities. But with the growth of the organization, the legalization of norms for the protection of workers’ and producers’ rights have become vague and less predictive.
There are issues which need to be enlightened upon:
1. Cost Benefit Concern
Fair-trade ensures to provide the floor price to the rural farmers/producers which is well above the average money he/she would get on selling through traditional trade routes. Fair-trade incentivizes producers in case of production of low quality beans and provides the stability of income to them. Moreover the average coffee producer has to bear an extensive amount of costs in order to be able to get the market price of the beans sold. Some of the farmers who live in steeper areas have to bear extra costs for production too. Other costs such as coffee bags are being neglected from the bigger picture, hence leading towards a lower source of income. “People of Michiza, Mexico sell a very high percentage of the coffee the harvest on the fair-trade prices, lower priced non-fair-trade sales do not dilute the overall price much”(Jaffe, 2007, p.237). Fair-trade keeps a standard price of say 1.00 USD per pound. The challenges of growing coffee in different places incur different costs which makes it difficult for most farmers to meet their demand (Jaffe, 2007). “The prices [for fair-trade coffee] have not changed . . . but then each year the cost of living continue to rise… Maybe the costs of production are still covered, but the cost of living and the basic necessities that the producer has, are no longer covered.”(Jaffe, 2007, p.239). University of Wisconsin economist Brad Barham and colleagues find “If coffee drinkers want to improve the environment, they should pay for it themselves, not impose added costs on impoverished coffee growers.” Fair-trade cooperatives can do a lot of good for a community, but ultimately their success is naturally limited to the local population centers where workers are. This can create divides within a community because some workers may not qualify to be part of the cooperative and may not receive the many benefits that coop workers are able to receive.
2. Branding Ethics
Three in a hundred Starbucks beans come from fair-trade although Starbucks in Europe, the Middle-East and Africa claim to trade the espresso roast beans from fair-trade. If Starbucks can reap the public-relations windfall of being viewed as an ethical corporation with a token participation in fair-trade, other competitors might as well not take the trade of fairness seriously. If large corporations show obfuscation towards their involvement in the trade practices with fair-trade, consumers might become cynical about the fair-trade seal which would lead towards the insignificance of the fair-trade. But there are corporations which trade with 100% fair-trade roaster in a relationship with producer cooperatives. Gavin Fridell, puts the movement-oriented players at a competitive disadvantage: “From the perspective of FLO, no difference exists between Starbucks and Equal Exchange, an alternative organization with not-for-profit aims and a modest salary range among workers. Both are licensed to sell fair-trade goods moreover Starbucks’ entry into the fair-trade market poses a significant threat to the viability of such alternative trade organizations.” Proper branding of fair-trade is also a dire necessity among the competitive markets which might otherwise cause misunderstanding among the consumers. Café Nero does not actually sell fair-trade coffee but mentions the use of Fair Trade which leads towards a very common misreading.
Fair-trade cooperative members, although are well-off than the conventional farmers, but the welfares promised is not delivered. Some cooperative members in Colombia invest a high percentage of their profits on their children’s education, whereas others are taking initiative on starting a new business (Lyon, 2010). The big corporations in the other hand make it challenging for new entrants to enter into the fair-trade game by making them vulnerable to the reverence earned. Hence, in my opinion the poor coffee producers are better off with a centralized government organization suck as the World Bank and the Food and Agriculture Association (FAO) rather than leaving them in the hands of a capitalist mainframe organization which entertains damage through third party big corporate giants. So I would recommend to switch to fair-trade coffee only after entering into the senior level of competitors otherwise, should continue selling conventional high quality coffee and focus more on marketing Copacabana Cuppas’ brand loyalty extensively.
- Jaffe, D. (2007). Brewing Justice : Fair Trade Coffee, Sustainability and Survival. Berkeley and Los Angeles, California: University of California Press.
- Lyon, S. (2010). Coffee and Community : Maya Farmers and Fair-Trade Markets . Boulder, Colorado: University Press of Colorado.
- mccrindle.com.au. (n.d.). Retrieved from https://mccrindle.com.au/insights/blogarchive/australian-attitudes-towards-coffee/