The relationship between coffee growers, processers, exporters, and buyers has never been more complicated. The advent of Fair Trade and Direct Trade in recent decades has begun the process of improving these relationships for the better.
Prior to the advent of Fair Trade, coffee prices were, and are, regulated by the International Coffee Organization according to the regulations set forth by the International Coffee Agreement of 1962.
Negotiated by the United Nations, its aims had been to prevent excess coffee from flooding the coffee market and collapsing the price and adversely impacting the already impoverished regions.
This agreement has been renegotiated several times but trying to control the commodity proved difficult so the ICO has focused more on educating, raising awareness, and promoting coffee consumption along with other more complex economic tools used to help regulated the largest food commodity in the world.
The overall Fair Trade movement began in response to poverty created by World War II but Fair Trade as it applies to coffee began in the 1980s. Because there were no quotas in the renegotiated ICO agreements the market was flooded with green coffee. In an effort to artificially increase the price per pound to a place where growers could make a livable wage, activists established the first Fair Trade certifying body. Originally called Max Havelaar after a fictional Dutch character who stood up for coffee farmers and opposed exploitation by Dutch colonialists, it soon had company. Following the Dutch, Germany began their Transfair label and within ten years many organizations were popping up.
There are no universal standards for Fair Trade Coffee. This has created a bit of confusion but buying a Fair Trade Certified item usually means that the following criteria have been met at a minimum.
Produced in democratically run cooperative farms.
It is produced without child labor.
Follows restrictions on the use of pesticide and herbicides.
The exporter was paid a minimum for their coffee.
Food for thought
Fair Trade is being challenged by Direct Trade. Coffee producers and farmers are establishing relationships with coffee roasters and agreeing the pay a premium. With less money being spent on sometimes-ambiguous certifications, the growers get more money and the roasters bring a better product to market.