Fair Trade Practices Include:

WHY SUPPORT FAIR TRADE COFFEE?
Behind oil, coffee is the world's most traded commodity. Many nations depend on coffee exports for their main source of foreign exchange and 20 to 25 million people rely on coffee for income. With all this money surrounding coffee, how can so many people involved in growing coffee live in extreme poverty?

To understand the conventional coffee market, it is helpful to look at three interrelated issues that make coffee a bitter crop for the majority of farmers: the coffee chain, pricing and dominating multinational corporations.

In the conventional coffee market, the route a bean travels on its way to your cup can involve a dizzying number of parties and transactions. Depending on the country and multinationals involved, the chain might be as follows:

small coffee farmer local speculator exporter importer/broker/trader

roaster distributor retail outlet/café your cup

Each stop in the coffee chain involves a transaction, where each party seeks to maximize profit. Thus, the more links in the chain, the more dispersed your coffee dollar becomes. In this chain the small coffee farmer gets the smallest cut and can expect to earn a paltry $600-$1200 U.S.D. per year while hired laborers fare even worse. The reason: small farmers lack access to the market, price information, credit and control of steps like marketing and processing (cleaning coffee beans) that would allow them to sell their coffee for more. Local speculators, appropriately named "coyotes", take advantage of price fluctuations and the farmers´ lack of access to market information, frequently paying dramatically less than the market price. While large estate owners can obtain credit towards their next harvest, small farmers are often forced to borrow from the coyote with the expectation that they will sell future coffee at an even lower price. Even when coffee farmers obtain the "market" price, that price rarely reflects the true costs of production.

The mechanism for trading and pricing arabica coffee at the global level is the Coffee, Sugar, Cocoa Exchange (CSCE) in New York. In 1997, estimates reported that five times more coffee was traded on paper than grown worldwide. Traders driving prices based on up to the minute weather forecasts have no connection with the small farmers who spend their lives growing and harvesting coffee. The result is a trading system that treats all coffee farmers as a commodity, to be used at the lowest cost rather than as human beings.

Despite the rapid growth of specialty roasters, Philip Morris, Nestle and Proctor & Gamble dominate the U.S. coffee market, which consumes one third of world coffee exports. Their unquenchable profit motive drives a market that ignores the realities facing coffee farmers. In 1994 a Nestle coffee executive was asked for an opinion on sun vs. shade-grown coffee. The executive had never heard of the issue and responded, "price and quality are our two determinants -- we have NO relationship with coffee growers." To find out the difference, go to our Organic/Shade Grown section.

Fair trade is the alternative. Just as with Community Supported Agriculture (CSAs), where consumers know their farmers and share up front in the risks associated with agriculture, fair trade is about reconnecting with coffee farmers. Fair trade and alternative companies like Peace Coffee bring responsibility and justice back into the trade equation. By purchasing direct from small farmer cooperatives and eliminating "coyotes", the income from coffee goes to those who deserve it. In addition, the cooperatives process coffee to the point where it is ready for export, adding value to the coffee. Fair trade pricing guarantees a livable wage. Farmers obtain prices 100-200% higher through fair trade as compared to what coyotes offer. This estimate is based on current market conditions and the fact that coyotes almost always purchase at significantly less than the market price. Small coffee farmers may need to accept a lower price given their economic situation and a lack of security surrounding the next harvest. Thus one of the most powerful fair trade tools is paying advance credit on coffee purchases and establishing long-term relationships.

At Peace Coffee we fair trade with small, organic coffee grower cooperatives in Guatemala and Mexico. For a more personal introduction to these coffee growers see our meet your coffee farmer page. Far more than just business entities, these cooperatives share the goal of improving the lives of everyone in the community through investment in infrastructure such as healthcare and education. Without the support of educated consumers and alternative coffee companies like Peace Coffee, these cooperatives would not survive against the large coffee businesses. Peace Coffee is committed to empowering and improving the living conditions of small coffee farmers by increasing their access to the U.S market.

Fair Trade also encourages traditional, low impact farming. Small coffee farmers historically have practiced sustainable farming techniques such as organic and shade-grown coffee. Supporting these small farmers through fair trade ensures their ability to continue as responsible stewards of the land. For more information on sustainable coffee farming and its relationship to Fair Trade, please visit our Organic and Shade Grown section.

Given the tremendous impact of coffee, your coffee selection is a real and effective vehicle for change. Fair Trade and its relationship to small scale, traditional farming take tangible steps to diminishing poverty while improving the environment in coffee growing regions.

It is easy to say, "our product is fairly traded", but how does a consumer know this is legitimate? The Fair Trade movement has developed a set of criteria and certifying agents to ensure the Fair Trade label can be trusted. Peace Coffee and the cooperatives we work with follow strict criteria established by the third-party non-profit fair trade certifying agency TransFair USA. When you see the label on the right on a bag or bin of Peace Coffee, you are guaranteed it is Fair Traded. As our product line grows we may support coffee farmers that are on their way to becoming Fair Trade Certified but whose coffee cannot yet display the label. We will of course trade fairly and keep you up to date on why all the cooperatives we work with merit our purchases and your support.

To learn more about Fair Trade and our Fair Trade certification requirements, visit the following sites:

Contact Peace Coffee:   info@peacecoffee.com