Fair Trade

The three small plantations that V inherited from her father have given us an outside interest in the world market for coffee beans.

The farmers of the Chanmagua cooperative in Guatemala have lately been expressing their disappointment at the gains made through conforming to various label requirements, such as Organic, Fair Trade, and Bird-friendly, each of which comes with its own set of fees and tramites. It's hard for small-holders to work out which form of social responsibility pays out best.

The Fair Trade seal for example, guarantees farmers a baseline price of $1.26 per lb plus a premium of $0.05 if the market price rises above the baseline. Between 2000 and 2004 the world market price dropped to around $0.60 per lb so this guarantee was valuable, but prices are now more than double 2001's 30-year low, prompting some growers to bug out of their contracts and sell to other middle men.

The Fair Trade label is still attached to less than 2% of coffee sales worldwide and only a third of all fair-trade certified coffee grown is actually bought by fair-trade dealers. The rest is dumped on the open market and is sold at whatever price can be negotiated.