Fair Trade Coffee to Benefit the Poor?

For several years, consumers have been becoming more aware of how their purchases affect the poor in other countries. One result of such awareness has been the creation of the “Fair Trade” coffee brand.

“Fair trade” coffee has been certified to meet specific requirements, such as paying laborers their country’s minimum wage, in an effort to combat low-wage labor exploitation. Consumers pay a higher price for this certification on their coffee.

The question remains, however: Does buying “fair trade” coffee really benefit poor migrant workers in third world nations?

LearnLiberty argues that buying premium coffee is actually more effective than buying “fair trade” coffee because laborers growing and picking higher quality beans are paid more than those growing “fair trade” coffee.

Watch this video from LearnLiberty to learn more.

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One Response to Fair Trade Coffee to Benefit the Poor?

  1. Neil Huff says:

    I know a little something about Colombia’s coffee marketing coop. The NGO I directed in Colombia from mid 1977 until mid 1981 worked in close cooperation with the national coffee growers association. The Association’s members were typically small farmers with 2 or 3 hectares of coffee trees in production. Most of the labor was provided by the farmer and his family. Our contractual arrangements with the Association was this: We jointly identified projects, provided about 1/3rd of the needed capital, brought in the necessary expertize-when required. We trained project managers, provided accounting training, and monitored and reported on project progress or lack thereof. Our administrative costs for this program were reimbursed by the Association.

    The purpose of this program (aside from building piped clean water distribution systems) was to assist coffee growers in the marginal coffee zone to switch from coffee production to other forms of income generating activities. the Association was making every effort to maintain a high quality coffee and at the same time provide alternate means of livelihood for those growers producing poorer quality beans. The alternatives devised varied greatly from place to place depending on the available resources that could be developed and generate income for the participating villagers.

    As I recall, the Association made an initial payment to the growers for their clean dried beans according to the current market value. The Association then sold coffee beans on the international market according to fluctuating market prices. Each farmer member then received a final payment based on the average sale price received by the Association. This system seemed to be fair to producers and at least back then, there was very little discontent. But at least in Colombia during the time I spent there most of the labor that went into coffee production was supplied by the small growers and their immediate families. I don’t believe there was much hired labor involved. The coffee growers I personally had contact with seemed to be earning profits from their crops that enabled them to live decently with no evident hardship.

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