Fairtrade Coffee: Can It Be Enjoyed With a Clear Conscience?

Fairtrade Coffee: Can It Be Enjoyed With a Clear Conscience?

Critical consideration of the Fairtrade label

Many coffee lovers drink their conscience too. Most Americans know that coffee is sometimes produced under inhumane working conditions. The system that bears the “Fairtrade” label seems to be a fitting answer to this problem. It guarantees small farmers a minimum income. In fact, studies show that the Fairtrade coffee system is often not really fair. Direct Trade allows you to enjoy yourself with a clear conscience.

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What is fairtade coffee?

On paper, the system, which is known for its green, blue and black seal of approval, is very well suited to combating the grievances in the production of food and beverages in the third world. You only cooperate with smallholders and support them in a targeted manner. Coffee farmers receive a minimum amount per kilogram of beans, even if the world price is lower. If the world price is higher, you will receive the corresponding amount. In addition, there is a social premium, which is currently (as of May 2016) 0.33 euros per kg. Especially families who want to offer coffee on the world market should be given targeted help.

And the Europeans love the idea! Since 2005, sales of products that are supposedly fairly traded have risen continuously. In no other country is coffee with the seal of approval growing as quickly as in Germany. The problem with this is that the system often works more badly than right and the organization that allegedly wants to promote fair trade does not respond adequately to the criticisms.

Fairtrade coffee: not always really fair

The system has various disincentives. If you want to sell your coffee with the “fair” seal of approval, you have to pay an admission fee of currently around 5000 euros. Further annual fees will follow. Many small businesses have to go into debt for this. As a result, they depress their employees’ wages. The consequence: Scientists from the University of London were able to show that the wages in supposedly “unfair” companies in Uganda or Ethiopia are the same or even higher than in companies that are allowed to work with the seal.

Coffee with a seal

In addition, it is often not possible to sell the entire production with the seal of approval. And this is where things get really critical: let’s say a coffee farmer wants to sell two kilograms of his beans. With the seal, however, he can only sell half of the goods. The quality from the first kilogram is very good. For this, he receives 1.50 euros on the world market. The second kilo was unfortunately less successful. For that, he can only redeem 1.20 euros on the open market. He therefore sells the good coffee beans without a seal, the bad ones with a seal and receives 1.53 euros for those through the social supplement. In extreme cases, the system can lead to bad coffee with a seal being put into circulation – which damages the entire system. Coffee drinkers want to enjoy with a clear conscience – but they also want to be happy drinking coffee.

Does the money get to the farmers?

A study from San Diego shows another critical finding: Americans, for example, would pay 50 cents more per kilogram of coffee beans bearing the seal to help producers. According to the study, however, this would hardly have any yield. For every 50 cents, just 0.3 cents actually reach the farmers. The rest of the money is lost along the way.

The organization behind the seal did not want to deal with these points of criticism for a long time. According to a report by “Zeit” in 2014, these points have instead been rejected as “far too generalizing”. At the same time, however, it was admitted that the investigations were apparently not entirely out of thin air.

Direct trading as a worthwhile alternative

The Fairtrade coffee system, however, is not as bad as it may seem from the previous lines. The minimum price and the social bonus are a great relief for many companies. It doesn’t make the market as much better as it claims. But it still makes for improvements.

However, there is an alternative in the form of Direct Trade that is even more worthwhile than Fairtrade coffee. The intermediate system is omitted here. The sellers in the target countries negotiate directly with the farmers. They do not have to pay any admission fees. Overall, a lot more of the money actually arrives at the farmers. This also creates an incentive for them to really sell their best products to their partners, as they pay the highest sums.

Suggested Reading:

Fairtrade Vs. Direct Trade – the Coffee Seal

Small seal customer

There are four common seals on the market that are supposed to indicate fair trade. In addition to “Fairtrade”, there is also the red and white “UTZ Certified”, which also sets certain quality standards, as well as the green and white “Rainforest Seal”, which guarantees environmentally friendly agriculture. The latter are also systems in which the farmers do not negotiate directly with the sellers.

Conclusion: Fairtrade coffee – don’t just trust the seal

Whoever drinks coffee with one of the seals helps to make the market fairer. However, if you want to enjoy with a really clear conscience, you should not only trust the seals, but be aware of their weak points – and demand that the systems face criticism and thus further improve the conditions for the producers.