Have you ever wondered what the difference is between Direct Trade and Fair Trade?
Our friend Joel Jeschke is taking us on a three part mini journey to educate ourselves a bit more on the subject.
Last week we had an introduction to the FLO, that you can check out here, and this week we will touch on some of FairTrade’s failures and drawbacks.
ENTER JOEL————————————————————————————————————————————–Though the fair trade model has done much to improve the standards of sustainability in the coffee industry, it is not without its drawbacks. One important situation where fair trade fails to live up to its goal is the current dilemma facing the farmers of Mountain Coffee Exporters (MCE) in Peru. Currently Peruvian based producers selling to MCE are earning $175 dollars per sack of certified fair trade coffee while their break even price is $180. This hardly exemplifies a fair system for coffee buying.
Another flaw in the fair trade model is its inability to reach the poorest of the poor in the coffee farming community. The poorest members of the coffee community are the laborers who harvest the coffee cherries. In fair trade cooperatives, labor standards are implemented, however, in order to be part of a cooperative, one must own land. The workers who do not own property, therefore, do not receive fair trade benefits. Paul Rice of Fair Trade International argues that, “Yields are so low on a small farm and it’s basically family run, the migrant labor issue is not as relevant”. This claim does little to increase the credibility of Rice’s company in light of their many failures.
Sarah Lyons suggests a more important drawback to the fair trade model that threatens the sustainability of the coffee industry, rather than working to better it. Lyons states that, “More fair trade coffee is produced than is currently sold, challenging the market’s ability to meet the needs of the many smallholders who do not have access to fair trading conditions”. Many farmers and producers may lead more sustainable careers as a result of fair trade, however, this is not true in all cases. More importantly, when the amount of product produced exceeds demand, fair trade can actually threaten the livelihood of the farmers it set out to support.
James McWilliams published an article on Costa Rican coffee farmer Kenneth Lander and the experiences Lander had with fair trade co-operations. McWilliams claims that, “fair trade is fair, but evidently not fair enough” (McWilliams). Over the past decade, many farmers, buyers, and roasters have found that fair trade is not enough to ensure a sustainable future in the coffee industry.
In response to this instability, the method of direct trade was implemented.
Next week we’ll look at the Direct Trade model and how it complements and differs from FairTrade.