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Thread: fairtrade and organic certification

  1. #1
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    fairtrade and organic certification

    Gene Cafe Coffee Roaster $850 - Free Beans Free Freight
    Hi guys,
    I was wondering if any one had any good info on how fair fair trade coffee is, also how much organic coffee is there out there that is not certified organic. I know that some coffee farmers do not use chemicals when growing coffee but cannot afford the process of certifying their coffee organic but I cannot find any reliable sources on either. Has anyone looked into this who would be willing to share their research with me? What are your thoughts on fair trade coffee (now being used by starbucks etc.), has it been sold out and flaunted by large corporations as a marketing scheme to aleviate the guilt associated with buying products fromexploited countries? Im not having a go or trying to upset anyone here Im just writing an essay for anthropology looking further intocommon perceptions of business practices (in relation to coffee) and thought you guys would have some good thoughts on the subject.
    Cheers :)

  2. #2
    Senior Member Koffee_Kosmo's Avatar
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    Re: fairtrade and organic certification

    PNG Gouno Highlands - Sourced direct from the local farmers 80km south of Goroka the Gouno Highland coffee is grown at 2200 meters above sea level. While not officially certified organic it is grown 100% naturally without the use of pesticides or herbicides and is only fertilised using natural forest floor mulch. Purchased without a chain of middlemen means that an additional 20% goes directly back into local projects making this very fairly traded coffee. Semi washed and very well processed it produces a bright, sharp espresso that really cuts through milk and will become a CS favourite for sure.
    The quote above is from the notes that Andy placed on the last Green Bean Bay

    So I would say that the Importers, wholesalers & roasters would have a better than average idea of where things stand in regards to who is officially organic or un-officially organic and what fair trade systems work and not just toothless tigers

    KK

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    Re: fairtrade and organic certification

    To get a better indication of where the extra $$ goes look at the annual reports of supposed fir trade organisations *:-? Rain forest alliance may as well be an offshoot of McDs inc. They are western thinking marketing charities (oxymoron IMO).

    Money from faircrack here puts practical $$ where it can do most good :) Another good one I ran across seems to be Cofeekids?

    Organic is a misused term in agriculture regardless of crop.

    Warm fuzzy feelings aside if it tastes good and you can be reasonable happy no child or slave labour is being used drink it :)

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    Re: fairtrade and organic certification

    In my next article for BeanScene magazine, I explore fair trade coffee from a coffee quality perspective. *Once I get the online version up, I will have links to various papers in there, so if you can wait a month or so, there will be some useful information in there for you.

    In a nutshell, Id say that if you want to have a meaningful point of view on Fair Trade coffee, there are a lot of questions that you need to know the answer to, for example:
    *Who are the stakeholders on a coffee farm?
    *How is coffee traded?
    *How much does it cost to produce coffee?
    *What does coffee fetch on the open market?
    *What does certified coffee fetch?
    *How much certification cost?
    *Who is eligible for certification? *(And, conversely, who is not?)
    *What must be done and shown in order to be certified?

    To be blunt and perfectly honest, I would be surprised if more than a handful of ardent fair trade advocates actually had these answers - I suspect that most people that support fair trade certification get their information from fair trade marketing material.

    I will make one observation, though: the fair trade certification requirements do not include a requirement that coffee is of a particular quality. *So it would seem to me that "fair" in the context of "fair trade" means "fair" to the farmer and not necessarily to the consumer (if you accept that the deal is "fair" for the farmer, that is.) *Given that it is the "trade" that is said to be "fair", one would think that it would be "fair" for both sides of the trade, which would imply that there should be standards in there to safeguard the interests of the consumer. *The fact that there are not is a dead giveaway that the system is designed with commodity coffee in mind. I dont know about you, but I am not interested in drinking commodity coffee.

    Cheers,

    Luca

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    Re: fairtrade and organic certification

    Im not so worried about the quality of the coffee (well only because Ive got a bread machine and coffeesnobs), if a consumer buys it and doesnt like it he probably just wont but it again, my point is are there producers who are being disadvantaged if for some reason they cannot be certified, and as you said Luca, who are the stakeholders in the certified businesses, what do they have to give up to be certified fairtrade? anyway I guess Ill have to trawl the internet for figures and facts..
    Ill be interesteed to read your article once its up but Ive only got til thursday fort this one :D
    It is interesting though that so many people are willing to advocate fairtrade, possibly when it first started it had good intentions but it is the perfect opportunity for corporations to gain customers who have an ethical conscience or want to buy out of their guilt...

    I

  6. #6
    Senior Member Koffee_Kosmo's Avatar
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    Re: fairtrade and organic certification

    Quote Originally Posted by 6C6B6F606862776760690E0 link=1243133562/2#2 date=1243134447
    Money from faircrack here puts practical $$ where it can do most good :)
    Agree wholeheartedly on that one

    Quote Originally Posted by 6C6B6F606862776760690E0 link=1243133562/2#2 date=1243134447
    Another good one I ran across seems to be Cofeekids?
    Yes Coffee Kids have a current fund-raising auction on the homeroasters site
    Info
    http://www.homeroasters.org/php/forum/viewthread.php?thread_id=1336

    Auction Items
    http://www.homeroasters.org/php/forum/viewthread.php?thread_id=1333

    KK



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    Re: fairtrade and organic certification

    To give you an idea last time I looked at one of the fairtrade annual reports (forgotten which one ) from 21million USD 12 went to overheads and marketing ! What this means is that about 1/2 of the figure gets somewhere near the grower minus possible government corruption kickbacks commisions etc

    sorry if I ambeing overly cynical but I just am ;)

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    Re: fairtrade and organic certification

    OK, if youre on a deadline, Ill try and PM across some links to you ...

    Quote Originally Posted by 50484D4850484D290 link=1243133562/4#4 date=1243136394
    Im not so worried about the quality of the coffee (well only because Ive got a bread machine and coffeesnobs), if a consumer buys it and doesnt like it he probably just wont but it again, my point is are there producers who are being disadvantaged if for some reason they cannot be certified, and as you said Luca, who are the stakeholders in the certified businesses, what do they have to give up to be certified fairtrade?
    This misses the whole point.

    The coffee industry has been caught in a vicious cycle since it started to take off in the late 1890s. This problem stems from the fact that it takes about five years for coffee trees to mature to produce worthwhile harvests. It goes like this: shortages, often caused by frosts in brazil, cause coffee prices to spike. This causes people to plant trees. Five years later, and entirely, tragically, predictably, there is an oversupply caused by the recovery from whatever caused the shortage, plus the new entrants into the market. This causes prices to fall. People exit the market, or there are further shortages and the cycle starts all over again.

    The fact that coffee has been though of as a commodity has caused a race to the bottom, led by the larger companies for whom saving a small percentage of cost results in a large profit gain. As long as people dont care about quality of coffee, any farmers produce can easily be displaced by any other farmers produce, seeing as we are talking about commodities. This means that farmers whose products are sold as commodity products are always at the risk of having the price that they can command lowered by more coffee coming in to the market.

    One attempted solution to all of this was the international coffee agreement that ran, if memory serves, from about the 1960s to the late 1980s. Under this agreement, each exporting country had quotas above which it could not export unless the price of coffee rose above a certain amount. Conversely, if the price fell below a certain amount, each countys quota fell. Under the agreement, the lowest quality coffee was destroyed and funds were set aside to help farmers switch to alternate crops. The ICA had its problems and wasnt especially popular, but at least it seemed to help stop ludicrous price fluctuations. IIRC, the collapse of the ICA was brought about by the big business coffee lobby in the USA, which pressured the USA to pull out so that they could buy at lower prices. Without the USA adhering to the agreement, it was a toothless tiger and soon fell apart.

    The return to the free market also means a return to large price fluctuations caused by supply and demand. There is no doubt that this has resulted in hardship for farmers whose product is traded as a commodity where quality isnt especially important, especially when they entry of Vietnam into the market with heaps of robusta in the early 2000s prompted a massive price crash.

    ... so then we get to Fair Trade. Fair Trade has no quality requirement, but the farmer must bear costs to get the certification. This means that if the farmer is able to grow coffee that commands a higher price than the fair trade minimum based on quality, they are probably better off not incurring costs of certification and selling it into the specialty market. They could still do the whole FT certification thing and could, in theory, command a higher price than the FT minimum, but they would only do so if they felt that the benefit that they gained from it exceeded the cost to them of being in that system. Producing coffee of a higher quality costs more money than producing low quality coffee. To give just one example, it is cheaper to strip pick ripe and unripe coffee cherries than it is to make multiple passes to pick only ripe cherries. In fact, in at least some countries, the cost of producing coffee that meets the SCAAs requirements to be called specialty coffee is significantly higher than the fair trade minimum. This means that from the farmers perspective, theres a good incentive to cut costs as much as possible when selling fair trade coffee and to rely on the certification and minimum price, seeing as quality is now irrelevant. Further, if the farmer is now guaranteed a minimum price, there is incentive for them to increase production of bad coffee, which is cheaper to produce. Now thats all lovely from the perspective of the farmer, but from the market perspective, it encourages the supply of lower quality coffee. The people who lose out are farmers producing higher quality coffee that is nonetheless traded on the commodity market.

    So, from a whole market perspective, it looks to me like fair trade certification might well make a meaningful impact for the few cooperative that are certified when prices fall significantly below the fair trade minimum, but it looks like it is to the detriment of non-fair trade certified farmers and to the detriment of the consuming public, who, understandably, have as their frame of reference the coffee that is easily available to them and lose out in the race to the bottom to save a few bucks.

    Incidentally, I should mention that everything that I have read and seen presented leads towards the conclusion that the poorest quality, cheapest coffees that are the worst deal for farmers are really bound for soluble coffee production. This means that bringing pressure to bear on roasters who sell mild arabicas for espresso use is at best not attacking the root of the problem and at worst actually harming a market into which coffee farmers can sell their coffee for the highest return.

    Now, supply and demand fluctuations are a huge problem. They have been a huge problem for over a century. No tiny band-aid solution is really going to fix it.

    Personally, my interest is in coffee of high quality. What I dont have data on is a heap of data on coffee not traded as a commodity, which makes up relatively little of the market. It is obviously a lot easier to collect data on coffee traded publicly as a commodity on an exchange than it is to get data on deals done between relatively small farms producing small amounts of very high coffee sold to private buyers. I can tell you, though, that there are many specialty coffees for which demand amongst quality-conscious coffee buyers far exceeds supply. The price that these coffees command is far removed from the prices that commodity coffee commands and the farmers, rightly, are extremely proud of their product. Australias own Mountain Top farm is a great example - this year, you cant get any for love nor money! The very, very small number of farmers who produce coffee of such a high quality that demand exceeds supply are, to some extent, insulated from the vagaries of global overproduction by virtue of selling their coffee into a very different market. If you buy coffee of a very high quality, you create demand that helps to grow the size of the specialty market into which farmers can sell a high quality crop for a good return. This obviously wont fix oversupply problems, but its naive to think that there wont be winners and losers in the coffee game. IMHO, the winners should be the farmers producing the highest quality coffee. When they win, the coffee consumer wins, too.

    So then what to do about all of these people who are farming poor quality coffee? Well, its not a question that can be answered by a single, easy solution. The last overproduction figure that I remember was something like 8%, so if you want to do something about the problem, one approach would be to go to the supermarket and buy 16% more instant coffee than you bought last year (or a few jars if last year you bought none), then throw it in the bin. You are doing your part to increase world demand and, so, increase world coffee prices to the benefit of third world producers. Obviously this is hardly an efficient solution. You are putting a proportionally large amount of money in the hands of wealthy first world roasting companies to get a small amount of money to farmers producing coffee of a quality that you would never want to drink. Its a subsidy for people whose product cant look after itself on the open market. Some critical reflection is required to work out if it would be fair of me to end this paragraph by saying "sounds like Fair Trade."

    There are a range of coffee-related measures that could be taken. For example, one of the reasons why coffee farmers struggle to increase quality is because they receive their annual income all in one hit. Understandably, it is hard for them (particularly when the market is low) to get credit to spend on improvements to their farm that will result in higher quality coffee that will ultimately command higher prices for them. So instead of spending extra cash on buying fair trade certified coffee, why not spend it on microfinance programs to help these farmers help themselves?

    But, then, why does helping coffee growers have to be done directly through coffee? You have your pick of problems in the coffee growing world towards which you could donate cash to create a real difference. So when you buy coffee, why not set aside some cash to donate towards another cause? If you want to keep it coffee related, why not finance projects that aim towards supporting alternate coffee crops so as to attack the oversupply problem from that angle? This might sound like a roundabout solution, but it strikes me that subsidising coffee prices is also roundabout: if farmers need food, why are we subsidising their coffee production so that they can earn more to buy expensive imported grain, rather than simply helping them to switch to grain production?

    Difficult issues. No easy solution.

    Cheers,

    Luca

  9. #9
    Sleep is overrated Thundergod's Avatar
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    Re: fairtrade and organic certification

    Nice post Luca.

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    Re: fairtrade and organic certification

    Behmor Brazen - $249 - Free Freight
    Cheers Luca,
    I realised I really hadnt left myself enough time to research so I went with oil as a commodity instead. Thanks for the huge reply though I only wish I didnt leave it so late its an interesting topic. Also I didnt mean to say I dont care about the quality of my coffee just that Im very happy with my home roast and greenbay combo :)



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