At 2.3 billion pounds each year, the United States is the world’s largest consumer of coffee—consuming one-fifth of the world’s coffee. Each day 108 million people in the United States drink coffee, and in other parts of the world the same number of people depend on coffee production for a living. Half of the world’s coffee is grown by small-scale family farmers who often are not paid a decent wage. However, farmers who work with Fair Trade cooperatives earn three to five times more than they would selling through conventional methods and middlemen. Farmers selling to middlemen make a mere 2-4% of retail price. According to TransFair USA, for the sale of an average $3.00 latte, a farmer selling through conventional methods makes 2 cents. Agriculture workers are often described as toiling in “sweatshops in the fields” under harsh conditions and receive prices for their coffee that are less than the costs of production—forcing them into a cycle of debt and poverty.


Coffee in Crisis
     In 2000-2001 there was a worldwide coffee crisis and the price plummeted to $0.45 per pound. Although the situation is not still that bad, current prices are around $0.60-$0.70 per pound. This is not a living wage and many farmers cannot support their families and maintain their farms anymore—they are forced to abandon their livelihoods. However, despite this poverty, the price per pound for the consumer has not been lowered and middlemen or large corporations simply pocket the difference.


There is a Solution
     Fair Trade certified coffees meet a stringent list of criteria about the conditions under which they were produced and the benefits given to workers. During the worst period of the coffee crisis in October 2001 when the price was at $0.45/pound, farmers selling to Fair Trade buyers were receiving a minimum of $1.21/pound ($0.76 more per pound). Fair Trade can have a large impact on stabilizing the wildly fluctuating market and building connections with small coffee cooperatives.
     Currently, the Fair Trade minimum price to coffee cooperatives is $1.25 per pound for conventionally grown coffee and $1.45 for organically grown coffee. Should the world market price rise above these prices, Fair Trade importers will adjust accordingly and pay the higher price. Additionally, Fair Trade certified farmers are paid a $0.10/pound ($0.20/pound for organic coffee) social premium on top of the coffee price. This premium is spent by cooperatives for community and business development projects like bridges, roads, schools, and working towards organic certification.

The Current Fair Trade Situation
     Fair Trade coffee is currently available from 300 cooperatives in 23 countries across Latin America, Asia, and Africa. Approximately 85% of the Fair Trade coffee sold in the U.S. is also certified organic. Since 1999, fair trade certified coffee imports have grown on average 75% per year. In the United States, specialty coffee comprises $11 billion of the $22 billion coffee market and Fair Trade coffees are the fastest growing segment. From 2000 to 2005, retail sales in the U.S. grew from less than $50 million to nearly $500 million. Big companies such as Dunkin’ Donuts, Starbucks, Green Mountain Coffee Roasters, Newman’s Own, McDonalds, Costco, Sam’s Club, Dean’s Beans, and over 400 universities all offer Fair Trade coffee to some extent.

 
 
 
 
 
   
   
   
   
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