22 November 2008
The real price of coffee
1 September 2006
Te Waha Nui Online
Fair-trade coffee is helping some of the world’s poorest farmers. But JUSTIN LATIF discovers that not all ‘fair-trade’ coffee is fair, and most Aucklanders don’t seem to care.
Aucklanders can make a massive difference to the lives of the poorest people in the world, simply by choosing the right coffee.
Jeff Nagle started his small K’Rd café, Revel, four years ago with the dream of making money while being ethical.
Last year he changed his coffee to Coffee Supreme’s Fairtrade certified blend and has seen his business continue to prosper.
Having the Fairtrade certified logo shows the cafe is really fair trade and not just pretending it is. The International Fairtrade Labelling Organisation has been able to certify each link in the chain of production, ensuring a fair price has been paid to the farmer.
“I think a lot of people go into business just for making money. I don’t really care that the (profit) margins are less, I’d like to think I can serve it with a clear conscience,” Nagle says.
But he is concerned companies like Starbucks have convinced many people they too sell 100 per cent fair-trade coffee.
“It’s shocking, they spend so much on advertising yet they sell so little of their Fairtrade bags. A lot of people are naïve; it’s not their fault.”
Coffee is the world’s second largest commodity after oil. Every second, 300,000 cups of coffee are drunk around the world, while annual sales have grown from $46 billion in 1990 to $125 billion today.
Most coffee comes from the humid growing conditions of Third World countries, and with the coffee price at a 30-year low, these farmers live in poverty.
Fair trade means farmers are saved from the fluctuations of this volatile market by receiving a price which meets their production costs. In some cases, Ethiopian coffee farmers were receiving 23c a kilo yet they needed at least $1.50 to sustain their farms and livelihoods.
Angela Raynish, a spokesperson for Starbucks, says the company can ensure its coffee has been paid for fairly.
“For us, whether a kilo of Starbucks coffee is Fairtrade certified or not, we apply the same principles to ensure that farmers receive an equitable price for their coffee and can strengthen their farms for the future,” she says.
But Starbucks’ corporate responsibility fiscal report for 2005 says only 24.6 per cent of its coffee was bought under Starbucks’ own fair-trade certification practices. Just 3.7 per cent was Fairtrade certified by the independent internatoinal labelling body.
This leaves 71.7 per cent of its coffee with no certification or proof that it was bought at an equitable fair-trade price.
Lucy Aitken-Reid, a fair-trade campaigner, is incensed with Starbucks.
“I think it is corruption that they’re using something for the developing world for making money, it is the epitome of hypocrisy,” she said.
Justin Purser, coffee buyer for Trade Aid, says other coffee buyers typically deal with large estates and plantations which involve dealing with more middle men, while his organisation deals as directly as possible with small farms and co-operatives, taking out several links in the trading chain.
“We can provide concrete information illustrating how we respond to farmer’s needs. While other coffee providers talk about being fair trade, they can’t produce concrete information of their fair trading.
“We can monitor small farms better. I’m really unclear how those who claim to be fair trade but do not buy through certified sources, actually benefit growers, despite my regular enquiries.”
Trade Aid imports most of New Zealand’s fair-trade coffee and Purser gives examples of the prices it pays.
“In Guatemala, street price varied between 600-700 quetzales per quintal (NZ$1.35 per kg) this season in Huehuetenango. Our growers were paid 815 quetzales.
“While in Papua New Guinea, the market price was between NZ80c and NZ$1 per kg – and we calculated that these growers would be receiving more than double this price from the fair-trade order we placed with them.”
On top of this, Trade Aid pays US5c per pound of coffee to every co-operative which manages the farms, for social and community projects. It also returns a share of the profits in the form of a rebate.
Not all big coffee chains have found it difficult to change to Fairtrade certified coffee. Canadian-owned Esquires has 19 franchises across New Zealand and now uses 100 per cent Fairtrade certified coffee in its brewed drinks.
Operations manager Parvez Shaikh says while it pays a slightly higher price, this is not a significant problem.
“Because we buy in bulk it isn’t as difficult as a smaller café to go fair trade,” he says.
Some cafe owners are concerned fair trade will mean a trade-off in flavour and quality. Coffee Supreme makes fair-trade and non-fair-trade blends. Alastiar Keating, a manager at the company, says the regions where coffee is recognised as fair trade are limited, therefore blends, and flavours are limited to the characteristics of those regions.
Purser maintains that fair-trade coffee is as good, if not better than non-fair-trade coffee.
“Coffee we buy is always from high quality sources. I don’t accept those who think it’s low quality. The coffee we sell has won numerous awards here in New Zealand and overseas,” he says.
The fair-trade movement has grown world-wide and pressure is now on Auckland City Council to make Auckland New Zealand’s first fair-trade city.
This would mean passing a resolution of commitment and aiming to have 85 businesses in Auckland sell Fairtrade certified products within a year. Currently there are about 50, with at least another 10 about to go fair trade. Auckland University is set to become Australasia’s first fair-trade university, selling Fairtrade certified coffee in all its cafes.
Alastair Keating, of Coffee Supreme, says the push for fair trade needs to come from the consumer.
“It seems not all Aucklanders are fussed if their coffee is traded fairly – it’s down to whether we’re prepared to cross the street for a cuppa or not.”
So why fair trade? Lucy Aitken-Reid works for the Salvation Army and is campaigning to see Auckland become a fair-trade city.
“It is so important because I think it creates global injustice. This oppression is occurring at our own hands. And coffee tastes so much better with a smattering of justice.”
