The Issues with Fair Trade

Getting into the coffee business has been an educational experience, to say the least, but if there's anything I've discovered, beyond the fact that many of the coffee farmers are not receiving a fair share, is that there is a LOT of confusion out there (at least in cyberspace) over how to solve the crises with Fair Trade practices around the world.  If you do a search for Fair Trade Coffee on Google, for example, you'll find many sites that speak of whether or not it is actually working or if it's all just a way for big companies, such as Starbucks, to market their wares and make Americans feel better about their morning cup o' joe. To be honest with you, my head starts hurting just about everytime I really delve into it in an attempt to figure out exactly where the break-downs are occurring. But, overall,  it seems that the concept of Fair Trade is great, but it doesn't always work quite the way it is intended to.

*One of the unexpected issues with Fair Trade practices is that it creates a division in the market, splitting it into two distinctions, Fair Trade and not Fair Trade.  This division creates what is known in economics as "price discrimination," causing the poorer coffee farmers who are not labeled under a Fair Trade coop organization to be treated even worse than before Fair Trade was around.  Thus, Fair Trade only seems to work the right way in regions where ALL of the farmers sign on to the system together to avoid such a drastic difference in high and low pricing for the same coffee beans. So, in a nutshell, Fair Trade really needs to be all-or-nothing in order to be truly successful in all situations.

*Another issue with Fair Trade is the depth of the checks and balances. For example, if you make a farmer better off than he was prior to a Fair Trade agreement, he will, in some scenarios, be able to take his newly found profits and buy pesticides that he could not previously afford as opposed to giving his employees a desperately needed raise. This produces a higher yield for the farmer, which increases profits and creates more jobs, but discourages organically grown beans and often a better living  situation for the workers on the farms.

The answer? Your guess is probably as good as ours, but we wanted to try something new at BB Joe, and it is our hope that it works better at every level and catches on because of its success.  We call it Trickle Back.

Trickle Back

To recap, a Fair Trade stamp happens towards the beginning of the chain, then the bill for it is passed down through the links of involvement and winds up in the lap of the end consumer. While this isn't necessarily a bad thing, the end consumer only has to hope that his extra buck for his morning cup-o-joe is actually making a real difference. (Please see "The Issues with Fair Trade" above.)

In a Trickle Back scenario, the purchasing can occur in any way at every level, the farm worker and farm owner are still provided for in a more direct manner, and price discrimination does not occur at any level.


The advantages of Trickle Back vs. Fair Trade?

*First of all, a percentage of ALL coffee being bought and sold is given back to the farm families rather than just what is purchased and sold as Fair Trade.

*It removes price discrimination at every level from the farmer to the retailer.

*It is directly given from the roaster to the coffee farmers/coffee farming families, removing the question of what is actually reaching those who the money is supposed to help.

*Trickle Back keeps the farmer from having to join a Fair Trade Union to stay in business, allowing him greater control over his own farm and destiny. Also, most of the on-site organizations helping in coffee-producing regions are heavily centered on education, helping the farmer to produce crops organically and still produce higher yields.

So who is on BB Joe's Trickle Back list?

We see the biggest advantage of giving back to the farmers directly by financially supporting missionaries who are working in coffee growing regions.  Beyond missionary support, however, there are many other great organizations that make a huge difference in the lives of coffee farmers. The following is a list of groups we choose to donate to and we hope you do as well.

Tree of Life Ministries - Directly helping coffee-growing families in Honduras

Coffee Kids Grounds for Hope - Directly helping coffee-growing families in Latin America

The Rainforest Alliance - An organization that directly assists the countries that are in the coffee belt around the world.

Oxfam America - Greatly helping the poverty-stricken farmers in Ethiopia (You Tube thanks from Oxfam)

 

 

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