Trips: Cooperative Coffees and Producers Meet in Guatemala

Written by Cafe Campesino on Sep 1, 2005 in NEWSLETTER, Trips |
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From September 2nd through the 9th, the members of Cooperative Coffees (of which Café Campesino is one of the founding members) gathered in Xela, Guatemala, with more than a dozen of our producer partners from Latin America to listen, learn and plan for the future. The forty or so roasters and coffee producers who attended this year’s annual meeting agreed unanimously to strengthen our relationship by addressing specific issues central to our shared vision of Fair Trade. We identified four key areas that require immediate attention, bearing in mind that we are uniformly committed to the development of a truly fair Fair Trade model.

Price — Our producer partners made a compelling case for the need to address, immediately and over the long-term, the issue of price…what we pay them for each pound of Fair Trade, organic coffee.

One of the biggest challenges faced by our producers’ cooperatives is managing, on a daily basis, the threat posed by the local market price for coffee, which moves with the New York Stock Exchange “C” (or, coffee commodity price). Individual producers are quite aware of the daily movement of the “C” as a result of their interaction with the local coffee coyotes, who are constantly vying with our producer partners’ cooperatives for their green coffee beans. In order for our producer cooperatives to compete with the local market, especially when the “C” rises, we need to ensure that the managers of our producer partners’ cooperatives have pricing from us that enables them to remain the buyer of choice for their members.

Additionally, some of our producer partners grapple with the challenge of providing adequate incentive to their members to either convert them or ensure that they remain committed to the practice of organic cultivation techniques.

To address these issues, Cooperative Coffees 1) proposed an increase in the base price per pound as well as the premium we pay for organic coffee and 2) agreed to work jointly with our producer cooperatives to perform a comprehensive analysis of their costs of doing business and explore the possibility of creating an alternative pricing system divorced from the New York “C”, which is not only irrelevant to our producers’ real cost of doing business but which also places an immense burden on our producer cooperatives, distracting them from the important work of managing their cooperatives. Ultimately, we hope to develop a pricing system that, as the norm, ensures that our producer partners are able to achieve and maintain a decent quality of life.

Communication — A challenge not only for our producers but also for us as a dispersed collective of Fair Trade roasters. Improving lines of communication between our producer partners and us, among the members of our roaster cooperative and between the producers themselves is critical to the long-term effectiveness and survival of our Fair Trade model.

It was agreed at the meeting that we will establish clear points of contact in each producer organization both at the cooperatives’ administrative and board levels. We reaffirmed our commitment to developing a more fluid and substantive flow of information to Cooperative Coffees from our producer partners and visa versa. To translate these ideals into practical terms, it was proposed that we start by incorporating a Letter of Understanding between Cooperative Coffees and our producer partners’ cooperatives into the actual purchase contract and which clearly spells out what information needs to be exchanged and with whom to ensure that both parties have what they need to fulfill their respective obligations.

We also made a commitment to develop the relationships and exchange of information between producer groups which, during the brief time in Xela, proved to be a powerful tool for our producer partners. It is logical that each producer cooperative has experience as well certain challenges that can be communicated directly and resolved most efficiently via a dialogue with those who share their circumstances rather than outsiders who are not exposed to the same pressures on a daily basis.

Quality — It was agreed that we (Cooperative Coffees and our producer partners) are developing something unique in the fair trade movement…a true spirit of unity and family based on a long term commitment to seeing our Fair Trade relationship through to its intended objective: a much better quality of life for our producer partners, their communities and their families. One of the best ways to achieve this lies in developing mechanisms to ensure that Cooperative Coffees receives our producer partners’ best quality coffee, which in turn enables us to compete in the North American market and increase demand for their fair trade, organic coffee. The members of Cooperative Coffees asked our producer partners to develop new mechanisms that will spell out what they will do and what they need us to do to better support them in delivering their best coffee to us year after year.

While better pricing, effective communication and improved quality control are critical components of a more just fair trade model, they do not fully capture perhaps the most important element of what we believe is genuinely Fair Trade: a permanent Producer Voice in Cooperative Coffees. The astoundingly positive power of our producers’ collaboration in Xela illustrated what we all have to gain when we work together. It was agreed in Xela that we will work with our producer partners to develop a producer Voice in Cooperative Coffees, one that enables us as much as our producers to solve the myriad problems that we encounter on an ongoing basis rather than waiting for a producer visit or annual meeting such as the one held in Xela. This voice may take the form of advisory positions for our producers on our board of directors or even possibly producer partner membership in Cooperative Coffee’s various committees.

During the annual meeting, a guest presenter conducted a two hour workshop on managing the risk that is inherent in the global coffee trade. Among the many important points he made, one stuck out as particularly interesting…in the coffee trade only two players truly shoulder the burden of risk associated with its natural price volatility: small scale producers who supply the green coffee beans and roasters like those of us in Cooperative Coffees who roast and deliver coffee to the North American market…not the brokers, not the agents.

In Xela, it became clear that the Fair Trade model effectively bypasses these middlemen, intermediaries who have generally reaped much of the profit in the coffee trade while bearing the least amount of risk. After all is said and done, I believe that Xela was a meeting place for Fair Trade itself. In Xela, the two primary stake holders in a trade relationship came together not only to better distribute the benefits but also the roles, responsibilities and risks that are part and parcel to their trade relationship. This seems fair…and fair is good.

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