The What, Why, How of Fairtrade Coffee

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The What, Why & How of Fairtrade Coffee looks at how fairtrade works, where it can fail (or be abused) and why it is necessary until a direct trade certification comes along.

The What, Why & How of Fairtrade Coffee looks at how fairtrade works, where it can fail (or be abused) and why it is necessary until a direct trade certification comes along.

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  • 1. Fair Trade Coffee The What,Why & How of Fairtrade Coffee By Coexist www.CoexistCampaign.org www.Coexist.org
  • 2. Shameless Plug #1 Yes, we are the “Bumper Sticker People” The Coexist Campaign sources products from Post-Conflict Areas Our Coexist Coffee is a delicious, Fairtrade product from Uganda
  • 3. Mbale, Uganda
  • 4. Shameless Plug #1 Two Ways you can buy Coexist Coffee: Online: www.CoexistCampaign.org + $40 Orders get Free Shipping! Ten Thousand Villages Alexandria 915 King Street, Alexandria,VA 22314 Fenton Street Market (Sat, 10-4) Veteran’s Plaza, Silver Spring, MD Broad Branch Market 5608 Broad Branch Rd, Chevy Chase District Tea Lodge 1922 I St. NW,Washington DC Retail Locations
  • 5. Let’s Get Started…
  • 6. What is Fairtrade? A Fair Price Paid to Producers A Focus on Direct Trade Cooperative Structure Support No Child Labor
  • 7. What is Fairtrade? Fairtrade Premium: •  At least 5cts of the Fairtrade premium must be invested in the improvement of productivity and / or quality of Fairtrade coffee. •  Investment can be made at the level of individual members and/or the producer organization. •  The General Assembly decides on the activities to be carried out. •  The producer organization needs to keep records on the use of the monies and to explain in which way it contributes to the improvement of productivity and/or quality. Coffee from Fairtrade Producers
  • 8. What is the Fairtrade Premium?
  • 9. What is the Fairtrade Premium? Washed Arabica Floor Price: $1.40 Premium: $0.20
  • 10. $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 $2.60 Fair Trade vs.Trading Prices Trading Price Fairtrade Price
  • 11. What did we Pay? 150 bags Non-Organic washed Arabica at $1.80/lb or NYC + 0.45 which ever is higher. Price includes .20 cents social premium and .25 cents quality premium 150 bags Organic washed Arabica at $2.20/lb or NYC + 0.75 which ever is higher. Price includes .20 cents social premium, .30 cents organic premium, .25 cents quality premium
  • 12. WHY Fairtrade?
  • 13. The Fairtrade Goal Stable Prices The Fairtrade Premium (reinvestment) Partnership Empowerment of Farmers & Workers
  • 14. Is it Working?* Yes •  Pro-Competitive effects (raises prices in a region) •  Reinvestment does improve quality and yields •  Increases Social Capital No •  Little evidence Fair Trade conditions or monitor have impact •  Still not competitive with private producers (plantations) •  Fairtrade cannot overcome other problems like infrastructure and access to finance *Milford 2004
  • 15. Common Criticisms Floor Price can attract poor quality products Certifications impose overheads that can be crippling The Free-Rider Problem Coops need to form Organically, Cannot be Forced
  • 16. The Catch 22 In Coffee, well-functioning coops are more important than a Fairtrade certification… Good Coops are more important than Fairtrade Certs But, it’s difficult for consumers to make informed decisions without Fairtrade certifications on products!
  • 17. How does it work?
  • 18. What do these mean? Fairtrade International Mark Fairtrade USA Mark – a separate org FLO-CERT is the certifying body of Fair Trade International Consumer Facing Producer Facing
  • 19. The Coffee Value Chain Farmer Private Intermediary Processing Plant Local Exporter Coffee Buyer Retailer Roasting Company ConsumerOrigin Country Consumer Country
  • 20. The Biggest Impact Farmer Private Intermediary Processing Plant Local Exporter Coffee Buyer Retailer Roasting Company ConsumerOrigin Country Consumer Country Buying Direct!
  • 21. The Gumutindo Example Gumutindo is a cooperative of cooperatives in Mbale, Uganda Gumutindo has 17 affiliate Cooperatives Pros: •  Helped new cooperatives by holding the certs (Organic & Fairtrade) & training managers Cons: •  Take a significant premium & create cash flow problems •  Try to prevent their affiliate cooperatives from going independent •  Fairtrade….but not Direct Trade
  • 22. Peace Kawomera Example On the Market: How Much Does the Farmer Make? 3.0K UG / lbs. ($1.17) To Gumutindo: 3.8K UG / lbs. ($1.49) Direct to Coexist: 4.5K UG / lbs. ($1.76) (2013 Organic Prices)
  • 23. Shameless Plug #2
  • 24. Shameless Plug #2 Coexist Coffee is: •  Fairtrade & We Buy DIRECT! •  All Grown Organically! •  Profits Go Back to Fund Education!
  • 25. Shameless Plug #2 1. Go to www.CoexistCampaign.org 2. Buy Our Coffee 3. Make the World a Better Place
  • 26. Questions? www.coexist.org www.coexistcampaign.org