Don’t Buy Fair Trade Coffee!
Having always been sceptical of fair trade coffee, I feel vindicated today as Canada’s National Post has published an article by Lawrence Solomon deconstructing the fair trade coffee market.
Mr. Solomon, who is a coffee merchant, discusses two academic studies. His principal sources are a study done at the University of Hohenheim in Germany and another paper published by MIT’s Sloan School of Management.
To summarize: According to Mr. Solomon the Hohenheim study, which followed Nicaraguan coffee farmers for over a decade, found that “farmers producing for the fair trade market are more often found below the absolute poverty line than conventional producers.”
The study attributes this to high certification fees required of some of the poorest farmers in the world to join the fair trade coffee scheme. No surprise here, according to the German study these fees help “impoverish farmers.” Coincidently, these farmers are also too poor to afford the fertilizers and pesticides that would allow them to label their coffees ‘organic’ as opposed to organic by default, which they are. According to Mr. Solomon, these farmers also cannot afford the fees to fly in the inspectors needed to certify their coffee as organic, which means they lose out on the premiums paid for the organic product. To add insult to injury, Mr. Solomon writes that the certification process is “lax and impossible to police, making it little more than a high priced honour system” that allows the unscrupulous to capture unearned profits.
After buying coffee beans “identical in every respect” from the same farm, some of them labelled fair trade and some not, Mr. Solomon concludes that fair trade coffee is little more than a price fixing mechanism that allows the fair trade association to constrict supply and keep prices high at the expense of farmers.
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Jul '10
Re: Don’t Buy Fair Trade Coffee!
I am curious, not being a coffee drinker and being a free trader who is wary of anything under the fair trade brand as being protectionist or corporatist or, as Cas suggests above, a scheme to insert a new third party something or other of dubious value. How do you Ricos see the Fair Trade brand?
Cas: On the last paragraph, Solomon's point seems a bit specious. There is no good reason that produce grown to organic standards cannot be sold on the general market, there is no counter non-organic market with we used pesticides and antibiotics claims, etc. It does show that, as a price fixing scheme, the market has subverted the fair trade intent. The same quality of coffee from the same farm is seeking better terms on the open market at the same time as they supply the fair traders.
All: Of course, if we continue to discuss this Obama will write a $5B check toward fair trade inspections, but we will probably find a way to use that in the election.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
Sisyphus, I'm big on free trade, so I come to Solomon's article with prejudices, but from my perspective I see no need to designate coffee organic in the first place. The final product is brought to consumers only after it has been roasted, which conceivably renders its nature moot, as there is nothing natural about adding a few hundred degrees of heat to coffee beans in the first place. I can see how a consumer might rightly worry about antibiotics in meat or pesticides on grains or fruit ingested raw, but coffee? What I see in fair trade is another attempt to guilt consumers into making an anti-free market choice against self-interest. Such choices skew markets away from efficiency, which leaves both them and the economy worse off. I would only add that I am open to persuasion if you, Sisyphus, or anyone else for that matter, can put a convincing case for fair trade.
Jan '11
Re: Don’t Buy Fair Trade Coffee!
Cas, I was in the store when you were writing this post and this front page above-the-fold article made me buy the paper. I've always been sceptical of most types of market interventions - as there are always unintended consequences.
For example, foreign companies advertising as cutting greenhouse gases often means that the air-conditioning is turned off for employees, who then swelter away. My leftie friends always blame such things on capitalism, my rightie friends blame socialism for the ills of the world, but in the end most of the problems are just due to human nature. And human nature can devise methods to circumvent the most altruistic intentions.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
Erik, I always check bios on this site, and I believe I checked yours prior to this occasion, but didn't learn then where you called home. After checking your bio today I found to my pleasant surprise that you live in Calgary, AB. Great town! Spent ten years there before moving west. We'll have to swap Stampede stories sometime. Have you ever visited the tar sands? I have on several occasions. Very, very impressive. When I lived in Calgary I was fortunate enough to travel all over Alberta, British Columbia, Idaho, Montana, and Washington. That's when I fell in love with America, too. In those days my idea of a great vacation was to pack my cameras and lenses into the car and drive. I would get up before the sun to photograph the sunrises in the mountains.Gotta tell ya, I did lots and lots of miles in the mountains.
Mar '11
Re: Don’t Buy Fair Trade Coffee!
Organic, green, fair trade. The terms have become meaningless and, yet again, the do-gooders have been suckered by those clever and ruthless enough to monetize the moral vanity of others.
Man, I wish I'd thought of it first...
Re: Don’t Buy Fair Trade Coffee!
Great post, Cas. Btw, check out this excellent article written on the topic by a bright, young fellow who will soon be joining us as Ricochet's newest intern. An excerpt:
Jul '10
Re: Don’t Buy Fair Trade Coffee!
You're conflating fair trade with organic. They aren't the same thing.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
I agree, but Mr. Solomon does not draw a distinction in his article even though he should.
Nov '10
Re: Don’t Buy Fair Trade Coffee!
It's too bad, it'll be interesting to see how this plays out. I've been using Just Us coffee for quite years, not because of the organics & fair trade, but because as my primary dietary staple I need high quality in the flavour department.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
Which raises the question of flavour: Each original coffee bean has some unique flavour points, but what brings the flavour out is the roasting process. Strong coffees, as far as I know, are over-roasted and weak-flavoured coffees are under-roasted. Ironically, the more a coffee bean is roasted the more decaffeinated the coffee despite its stronger taste. I`m no expert and if there are readers that can shed some more light on this I would love to read the news.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
Can I still buy 'fair trade' clothes, tea, soap, and hand bags!?! How am I going to display my solidarity and show everyone how much better of a person I am than they?
Jun '10
Re: Don’t Buy Fair Trade Coffee!
Diane Ellis, Ed.: Great post, Cas. Btw, check out this excellent article written on the topic by a bright, young fellow who will soon be joining us as Ricochet's newest intern. An excerpt:
May 14 at 2:52pm
Good article, Diane, thank you for the link.
Jan '11
Re: Don’t Buy Fair Trade Coffee!
Cas (and others) - just give me a holler if you're in Calgary - I'm pretty easy to find. Yeah, I've been to the oil sands - what an amazing place! It reminds me of a giant machine shop with that smell of oil (money?) constantly in the air. The companies do a great job of rehab-ing the areas that they mine. Also, with the steam-assisted gravity drainage extraction, the impact on the enviro is a lot less (not that that placates the greenies at all).
And - to stay on topic - I generally steer away from fair trade merchandise - because behind that label I know there is a high probability that someone in the West is lining their pockets by guilting Whole Food shoppers.
Sisyphus - I don't understand the statement "not being a coffee drinker". Does not compute . . .
May '10
Re: Don’t Buy Fair Trade Coffee!
I could not care less about goods that are "fair trade" or "organic." I look for quality that satisfies my needs at a price I'm willing to pay.
I've always suspected that "fair trade" or "shade grown" coffee imposed extra costs on the growers who are by and large much poorer that we in the US, all so we can congratulate ourselves their expense.
I'm a Norman Borlaug fan: organic foodstuffs are fine as niche items for a wealthy society, but will never answer for the solution to feeding the world, or providing a livelihood for the farmer.
May '11
Re: Don’t Buy Fair Trade Coffee!
I have to say that Canuckski eloquently distilled these movements down to their essence when he said they were
Just so! I always regarded the "green" movement as such. Just slap something about "sustainability" on a product label, and it provides what Dietrich Bonhoeffer called "cheap grace" to the consumer.
Jan '11
Re: Don’t Buy Fair Trade Coffee!
The fine folks at Reason have been covering this scam for quite some time. From the March 2006 issue
Absolution in Your Cup
The real meaning of Fair Trade coffee.
Right now I prefer regular old Dunkin' Donuts from Costco though the price has gone up to $20 for a 40 oz. bag. Of course it may all be moot in my case, as I'm awaiting the analysis of my kidney stones next week and I hear coffee (at least in the quantities I drink it in) may be verboten. Better check to see if the .45 has a full clip in it.
Edited on May 14, 2011 at 10:51pmJan '11
Re: Don’t Buy Fair Trade Coffee!
Trade is fair when it's free. It doesn't become any more fair just because some bleeding-heart progressive group makes some loopy pronouncement as to the symbolic Marxist gestures that went into the growing and transactions of coffee beans or any other produce.
May '10
Re: Don’t Buy Fair Trade Coffee!
Pike Bishop: The fine folks at Reason have been covering this scam for quite some time. From the March 2006 issue
Absolution in Your Cup
The real meaning of Fair Trade coffee.
Right now I prefer regular old Dunkin' Donuts from Costco though the price has gone up to $20 for a 40 oz. bag. Of course it may all be moot in my case, as I'm awaiting the analysis of my kidney stones next week and I hear coffee (at least in the quantities I drink it in) may be verboten. Better check to see if the .45 has a full clip in it. · May 14 at 10:08pm
Edited on May 14 at 10:51 pm
You mean magazine, don't you?
May '10
Re: Don’t Buy Fair Trade Coffee!
May I observe that the Rain Forest Alliance offer a more development-friendly approach to giving growers a better deal? They allow growers to specialise, and don't force them into co-operatives, allowing proper market-led development to take place. They describe the difference between their certification and Fairtrade here: http://rainforest-alliance.org/agriculture/faq-fairtrade
They are polite about it, but the essential difference is that they don't have a problem with growers getting rich. And individuals getting rich, and encouraging division of labour, is what makes development happen. Strongly recommended.
Jun '10
Re: Don’t Buy Fair Trade Coffee!
I don't care -- let the lefties pay too much for their coffee. I'll keep buying the old-fashioned actually fair trade coffee -- you know, Folgers and Yuban, the free-market stuff.