Rafael de Paiva, right, said that fair trade coffee farming has helped his family "create a decent living." (Lalo de Almeida for The New York Times.) Courtesy of International Herald Tribune.
By Andrew Downie
International Herald Tribune
Monday, October 1, 2007
VARGINHA, Brazil: Rafael de Paiva was skeptical at first. If he wanted a "fair trade" certification for his coffee crop, the Brazilian farmer would have to adhere to a long list of rules on pesticides, farming techniques, recycling and other matters. He even had to enroll his children in school.
"I thought, 'This is difficult,' " Paiva recalled. But the 20 percent premium he recently received for his first fair trade harvest made the effort worthwhile, he said, adding that it "helped us create a decent living."
More farmers are likely to see similar offers as importers and retailers rush to meet growing demands from consumers and advocates to adhere to stricter environmental and social standards.
Starting in November, Paiva's beans will be in the store-brand coffee sold by Sam's Club, the warehouse chain owned by Wal-Mart. Dunkin' Donuts, McDonalds and Starbucks already sell some fair-trade coffee.
"We see a real momentum now with big companies and institutions switching to fair trade," said Paul Rice, president and chief executive of TransFair USA, the only independent fair trade certifier in the United States.
The International Fair Trade Association, an umbrella group of organizations in more than 70 countries, defines fair trade as a system of rules that reflect "concern for the social, economic and environmental well-being of marginalized small producers" that does "not maximize profit at their expense."
According to Fairtrade Labelling Organizations International, an affiliate based in Bonn, consumers worldwide spent approximately $2.2 billion on fair-trade-certified products in 2006, a 42 percent increase over the previous year; the group said more than 7 million people in developing countries benefited.
Awareness of fair trade, like consumer awareness of "organic" a decade ago, is also growing. In 2006, 27 percent of Americans said they were aware of fair-trade certification, up from 12 percent in 2004, according to a study by the National Coffee Association, which is based in New York.
Fair trade products that have seen the biggest jump in demand include coffee, cocoa and cotton, according to the Fairtrade Labelling Organizations.
Dozens of other products, including tea, pineapples, wine and flowers, are certified by organizations that visit farmers to verify they are meeting the many criteria that bar, among other things, using child labor and harmful chemicals.
There is no governmental standard for fair trade certification (much like the "organic" label, until a few years ago). Some fair trade produce also carries the organic label, but most does not. One important difference is the focus of the labels - organic refers to how produce is grown, while fair trade is primarily concerned about conditions and treatment of the farmer.
Big chains in the United States are marketing fair-trade coffee to varying degrees. All the espresso served at the 5,400 Dunkin' Donuts stores in the United States, for example, is fair trade. McDonald's restaurants in New England sell only fair-trade coffee. In 2006, Starbucks bought 50 percent more fair-trade coffee than in 2005.
All told, fair-trade produce remains a minuscule percentage of world trade, but it is growing. Only 2.2 percent of coffee sold in the United States last year was certified fair trade, but that was 54 percent more than in 2001, according to a study commissioned by the coffee association.
Although Sam's Club already sells seven fair-trade imports, including coffee, this will be the first time it has put its Member's Mark label on a fair-trade product.
"The fact that they are putting their own name on this coffee is quite significant as a statement of their commitment to fair trade," said Rice of TransFair. "The impact in terms of volume and the impact in terms of the farmers and their families is quite dramatic."
Michael Ellgass, director of house brands for Sam's Club, said the company could afford to pay fair trade's premium and preserve the low price of its store-brand coffee because the new arrangement allowed the company to eliminate a number of middlemen.
Coffee usually passes from farmers through roasters, packers, traders, shippers and warehouses before arriving in stores. But Sam's Club will buy shelf-ready merchandise directly from Café Bom Dia, the roaster here in Brazil's lush coffee country.
"We are cutting a number of steps out of the process by working directly with the farmer," said Ellgass.
Some critics of fair trade say that working with thousands of small farmers makes strict adherence to fair-trade rules difficult.
Others argue that fair-trade coffee is as exploitive as conventional trade, especially in countries that produce the highest-quality beans - like Colombia, Ethiopia and Guatemala. Fair-trade farmers there are barely paid more than their counterparts in Brazil, though their crops become gourmet brands, selling for a hefty mark-up in the West, said Geoff Watts, vice president for coffee at Intelligentsia Coffee & Tea, a coffee importer and roaster based in Chicago. But in Brazil, a country with little top-grade coffee, the partnership between small producers and big retailers is a perfect blend, said Watts.
"Fair trade markets itself as a specialty brand," he said. "However, the fair-trade model is far more suited to the commercial market, which is the Sam's Clubs and the Wal-Marts and Kraft, Fulgers and Nestlés of the world."
Fair-trade farmers in Brazil are paid at least $1.29 per pound of coffee, compared to the current market rate of roughly $1.05 per pound, said Sydney Marques de Paiva, president of Café Bom Dia.
Most coffee farmers are organized into cooperatives and some of that premium is funneled back to the community to finance social projects like schools or potable water.
Like most of his cooperative's 3,000-odd members - and three-quarters of coffee growers worldwide - Paiva farms less than 10 hectares, or 24.7 acres, of land. He produces around 200 60-kilogram, or 132-pound, sacks for the co-op, 70 percent of which is sold to Café Bom Dia as fair-trade produce.
The company would buy more if there was more of a market for fair-trade coffee, it said.
The fair-trade crop this year brought Paiva around 258 reals a sack, compared with around 230 reals for regular sacks. That amounts to an additional 3,920 reals, or $1,960, a huge sum here in the impoverished mountains of Minas Gerais.
"It's been great for us," Paiva said with a huge, toothless grin. "I call the people from the co-op my family now."
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