Editorial: The State of Fair Trade: Where We Stand

Written by Cafe Campesino on Oct 1, 2007 in Editorial, NEWSLETTER |
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Producers and roasters strike a pose at the Coop Coffees AGM in Matagalpa, Nicaragua

“I want everyone in the room to recognize that as this meeting comes to a close, it has just begun to rain very hard here in Nicaragua. In our country, rain is a good sign. It brings growth and opportunity.” Corporino Feliz, FEDECARES, Dominican Republic

I write this as Tripp, Abby and I are flying back from an exhilarating week in Nicaragua. Cooperative Coffees, of which Café Campesino is a founding member, just concluded our 7th Annual Membership Meeting which was hosted by our long-time trading partner CECOCAFEN in Matagalpa, Nicaragua. This year’s assembly brought together 32 farmers and leaders from 18 cooperatives in Latin America, 36 roaster representatives from the US and Canada, along with numerous allies who support our work in the areas of development, finance and certification.

This meeting was a bold step forward for the roasters and coffee producers who collaborate through Cooperative Coffees’ role as the only Fair Trade, organic green coffee bean purchasing cooperative of its kind. Our annual meeting has evolved as our organization has grown. When Café Campesino joined together with six other roasters to start Cooperative Coffees in 1999, we purchased green coffee from 3 farmer cooperatives in Mexico, Guatemala and Nicaragua. Our first annual meeting was hosted in 2001 by Peace Coffee in Minneapolis, attended by about 10 people and most of us slept on the floor of Scott’s and TJ’s apartments. As I looked around the meeting room in Matagalpa at the experience and leadership gathered for a week of open, frank discussion about the challenges and opportunities that lie ahead, I could not help but be hopeful about the future of the Fair Trade movement. This passionate, diverse group of leaders is not waiting on direction from others.

Farmer cooperatives continue to face numerous challenges and need support from their trading partners. More than ever, small-scale farmers urgently need to see more tangible benefits from their commitment to organics and Fair Trade, and the Fair Trade movement as a whole faces increasing challenges and the pressing need to better define and articulate itself. The great news is that the Cooperative Coffees family, roasters and farmers alike, is rising to the challenge!

With this Nicaragua experience providing an appropriate backdrop, let’s dive into “The State of Fair Trade”. In order to keep the length of this article within our self-imposed limit of the time it takes to drink a cup of coffee, I will break the topic down this way: This month we examine our internal system and network; next month we tackle the external trends and influences that keep us on our toes.

At Cafe Campesino, we attempt to incorporate the principles of Fair Trade into every business decision that we make. “Attempt” isn’t a typo – and it hurts a bit to use this word — but we must acknowledge that purity rarely exists and that we are always striving to improve. Our meeting in Nicaragua presented a dilemma of sorts — it simultaneously confirmed how far we have come and how well our system is working — and reminded us of how far we have to go and how much work needs to be done.

A quick description of our Fair Trade model: Cafe Campesino is a roaster/owner of Cooperative Coffees. Cooperative Coffees is a purchasing cooperative modeled after the farmer cooperative structure. Each member has one share and one vote and the cooperative should work on the farmers’ behalf to help the farmer directly access the market. Working collectively with fellow farmers (or roasters), all participants should achieve results and build relationships through their individual cooperatives that would not be possible if they were operating alone. The big question — is it working?

All the standard methods that we use to evaluate commercial enterprises easily illustrate that indeed this system is working – sales of coffee at Cafe Campesino and other roasteries in our coop are growing rapidly. Almost all of the farmer cooperatives that we work with are exporting more Fair Trade coffee each year; some can’t fill all of their orders. Even though there are now over 500 roasters in the US offering Fair Trade coffee, our phone continues to ring off the hook. Cooperative Coffees has 22 members and each week we receive inquiries from roasters who want to know more about our model. Our coop will soon import its 10 millionth pound of Fair Trade, organic coffee and we are forecasting 30% growth for the foreseeable future. So this unique “farmer-to-coop-to-coop-to-roaster” model sure seems to be a hit!

But our meeting in Nicaragua made visible challenges that we must address if we are really dedicated to forming long term, mutually beneficial, Fair Trade partnerships with farmers all over the world. The meeting was designed to encourage attending farmer cooperatives to share “best practices” with one another — and these exercises proved once again that the answers are usually already present at the local level. Some highlights of our internal examination include:

Building a network that helps farmers learn from each other. A cooperative in Peru is working on a plan to provide consulting work and build a farmer exchange program with a cooperative in Guatemala through assistance from a non-profit that attended the meeting. Many of the coop leaders in attendance stated that the annual meeting’s programming was fantastic, but that the most important benefit of the meeting and of the relationship with Cooperative Coffees is the friendship that they have formed with fellow farmer cooperative leaders who share the same challenges on a daily basis.

Helping farmers find a unified voice in a confusing Fair Trade market. All the coffee farmers I know say they need to earn more money for their work. Meanwhile, a futures market in New York continues to dominate the pricing mechanisms that determine the value of a pound of coffee. Through Cooperative Coffees, we fully support the farmers getting higher minimum prices by raising our minimums above the commonly recognized Fair Trade minimum. We also help the farmer cooperative earn a higher price by contracting to pay higher prices before the harvest begins, giving the cooperative a negotiating tool that they can use to get higher prices from other buyers. Farmers are more comfortable than ever before banding together and telling “the market” that good coffee will not exist if prices don’t go up — and the many buyers seem to be listening.

Identifying our problems as problems of success. Many of the organizations in our system are under cash flow pressure — roasters, our coop and the farmer coops. We are all growing quickly and need more capital to support this growth. The good news is that we have identified this and several innovative lending institutions are stepping in to help. We have experienced supply problems during the last year — there are more buyers looking for Fair Trade, organic coffee than ever before and this can occasionally affect our access to supply. Again, there is good news. This situation forces us to examine and deepen the relationship with producer cooperatives, often moves the price to the farmer up, and can result in a renewed and strengthened partnership. Some farmers attending the meeting expressed dissatisfaction with the percentage of the price that we pay to their cooperative that actually makes its way back to the farmer. The Fair Trade movement must wrestle with this issue — our system must provide noticeable impact at the farm level in order to be sustainable. We are investigating this issue with all of the cooperatives in our network and will push the cooperatives to be as efficient as possible, and certainly transparent, concerning the financial and social impact of our purchases.

Launching a number of initiatives during the next year that will strengthen our network and help fortify our Fair Trade model. We will launch a transparency project within the next 90 days that will allow coffee to be traced directly from our roasted coffee bags to the farmer’s cooperative, and ultimately to the farm. We are building several internal communication systems within Cooperative Coffees that will establish advisory and governance roles for producers within our organization. We are partnering with a local university to track the negative effect that a very weak US dollar has had on the net price paid to farmers and attempting to find ways to share the currency risk with the cooperatives.

As we assess the state of Cafe Campesino and Cooperative Coffee’s Fair Trade network and systems, I am reminded of an Ethiopian farmer’s response when asked how Fair Trade has improved his life. He said, “We are thankful that we now have a school in the community as a result of our Fair Trade partnerships, but my children still walk to school without shoes on their feet.”

We left the meeting in Nicaragua with a renewed spirit and enthusiasm for this work we call Fair Trade. Sure, problems were revealed, but these problems were addressed and potential solutions were discussed. Problem solving, after all, lies at the heart of our work as Fair Traders. This year’s meeting revealed a genuine commitment and dedication to making Fair Trade more effective… consensus has it that we all left Nicaragua invigorated more than ever.

Less than 2% of the world’s coffee is sold under Fair Trade terms, so we have a long, long way to go. But Fair Trade is a marathon, not a sprint… and if this year’s meeting showed anything, it is that the members of Cooperative Coffees and our trading partners have the stamina needed to stay in the race.

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