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What Is Fair Trade Coffee?
Ever wondered what the "Fair Trade" stamp on your bag of coffee means?
Published November 13, 2021
Joachim Estal
Coffee experts@The Coffee Lab
If you frequently buy whole bean bags at groceries or coffee shops, you probably have also encountered the word “fair trade” a couple of times. Have you ever wondered what the word and logo mean in the coffee industry? How does it differ from those bags that don’t come with the same stamp?
What Is Fair Trade?
Just by reading the word “fair trade,” it’s somehow already easy to understand what it is about. Fair is synonymous with just or equitable, while trade means the action of buying and selling stuff.
Fair Trade is a movement that supports sustainable trading relationships between producer groups and the buyers they sell their products to. It is regulated by ethical buying and selling standards to empower the people. Farmers and companies that passed a fair trade certification mean they’ve met these standards.
Fair Trade And The Coffee Industry
Countries located within the coffee belt (tropics of Cancer and Capricorn) grow the best coffee in the world. However, the same countries constantly face uncertainties concerning the economic aspect due to many factors.
Because coffee is one of the most exported commodities to the developed world, demands are consistently high, creating business opportunities for small farming communities. Farmers form certain cooperatives that will allow them to sell their products to big-time companies.
This is where Fair Trade enters–directly helping farmers with price agreements and business contracts that will work for them and their customers.
When a price is already agreed on, the companies will have to pay a portion of the cost right away to cover possible expenses that may be required for the farmer to proceed with the production. The remaining balance will be paid once the orders are completed.
In addition, distributors work directly with the farmers, which establishes better trading relationships that are built on trust. This will also allow for the price to go to farmers in full amount as no middlemen are needed for transactions to take place. This setup also gives way for long contracts to pursue and, in return, more sustainable livelihoods.
So, how much does fair trade coffee cost? Generally, Fairtrade guarantees a minimum price of $1.40 per pound, which is about 40% more than the current market price.
How Does Fair Trade Work?
Fair Trade organizations help promote the consumption of coffee in the industry, which paves the way for equitable prices to be maintained. At the same time, they also offer economic counseling to make sure that local farming communities get the support they need. This creates better health and living conditions for the families involved in the production.
Not only does Fair Trade protect coffee farmers from the risks of exploitative trades, but it also ensures the production of high-quality coffee, establishes safer working conditions for the farmers (away from racial and gender discrimination, child labor, etc.), and helps reduce environmental footprint.
Fair Trade Coffee In Popular Brands
Today, modern consumers are more concerned about ethical and environmental issues existing in the world. With this, Fair Trade coffee production has become a more significant business, and so many companies that use Fair Trade coffee have emerged.
Starbucks is considered to be the largest purchaser of Fair Trade certified coffee in the industry. The brand began its relationship with Fair Trade in 2000 and has paid over $16 million in premiums. This helped producer organizations to establish social and economic investments and projects for their community.
Is Dunkin Donuts coffee Fair Trade? Yes, the brand has partnered with Fair Trade USA to help support the welfare of coffee-producing communities. In fact, Dunkin Donuts was the first brand to sell espresso drinks that were made exclusively with Fair Trade coffee beans since 2004.
Why Should You Buy Fair Trade Coffee?
The protection of the rights of local growers and farmers were given minimal protection in the past. When a crisis in the coffee industry caused coffee farmers to drop prices at disastrous levels in 1988, the Fair Trade certification was introduced. This was to raise back coffee prices to profit farmers as well as resolve the crisis in coffee.
In today’s world, consumers have become more active in making positive changes through buying decisions. Because of this, companies will also begin to do business more ethically–providing fair prices for products, securing safer working environments, and promoting environmental leadership. In short, when the cup you consume is a Fair Trade coffee, you’re helping the farmers, the community, and the planet!
About the author
Joachim Estal
8-year barista for a world-class coffee chain from the Philippines. Passionate writer and coffee champion. "Coffee has always been one of my biggest love interests in life. And I am here to share it with all of you through this platform."
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