After last week’s post on coffee, I’ve been thinking about the cost of coffee, and how much of it goes to the growers.
Although I talk a lot about coffee, fair trade also encorporates tea, cocoa, clothing, crafts and flowers.
How does fair trade help farmers? What is fair trade? What are some pitfalls of fair trade?
The answer to these questions are in the video and later in this post.
Keep reading this article to see the video, interesting facts, transcript and further sources.
How to you know a product is fair trade?
In Canada and USA, most fair trade products are certified with this symbol.
Source: WP
Which Canadian grocer has fair trade coffee?
According to my research, Loblaws is the only national grocer that sells fair trade coffee.
How much does Starbucks pay for its coffee
Interestingly, in the video (above), I describe how most coffee is purchased for 54 cents a pound. Fairtrade coffee is purchased for an average of $1.26 (USD) a pound. Starbucks purchases its coffee for $1.42 a pound (because it is a “premium” product).
Transcript
Hello CultureCats, this is Joshua Hwang dropping another 90 Seconds to Culture VideoCast.
Fair Trade
Though coffee can be so expensive, most of the coffee we buy comes from producers who are paid 54 cents for a pound of beans (that’s 11 cents for every dollar spent by the public).
That’s pretty little.
As a result of this low price, many coffee growers are either very poor, or have to switch to more illicit crops. *sniff*
The fair trade movement, at its most basic, aims to provide fair prices paid to the producer.
Other key elements include:
1) Socially just and environmentally sound production
2) Safe and healthy working environments
3) Properly rewarding women’s work
4) And helping producers stay independent
Because the consumer, you, knows your product has been created with fair trade policies, you are willing to pay a higher cost and that is passed along to the growers.
Some criticize fair trade because it encourages market inefficiency: For example, there are too many people growing coffee beans, therefore the price is low. By capping the price at a higher amount, you will encourage more people to enter the market, thus increasing the supply and compounding the problem for other growers.
The response to this is that the Fair Trade coffee would compete in its own market: People wouldn’t just compare fair trade coffee to all coffees, but buy within only fair trade coffees.
Boom, that’s fair trade.
How much does Starbucks pay for its coffee?
Which Canadian grocer has Fair trade coffee?
To find out visit 90 Seconds to Culture dot com to learn more and let your voice be heard.
Sources / Further Reading:
Wikipedia: Fair Trade
TransFair - A Canadian fair trade organization.
CBC: Background Fair Trade - A primer from the CBC about fair trade.
Unfair Trade - An article from the Adam Smith Institute describing how fair trade does not help farmers in an efficient way.
(image by flydown)
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{ 8 comments… read them below or add one }
I saw fair trade bananas at Loblaws today and I finally understood why they are 10 cents more expensive than “normal” bananas. I still opted for the cheaper ones though hah
I’ve been thinking about this a lot. More generally, will I practice my ethics with my wallet? Also, how much do I care about these things?
Which do I care about more price, convenience or morality?
(I am very much a convenience buyer.)
Fair trade is not a workable idea. The way for those farmers to make more money is for coffee to somehow become more expensive, not from everyone essentially giving them a tip (voluntarily paying more). That’s only going to happen, as I understand Undercover Economist, if fewer people get into the coffee business and there’s less coffee available.
In the meantime, sure, I’ll pay more for coffee that paid a farmer more, but it’s like letting yourself be ripped off by a Beijing street vendor because he could use the dollar more than you. It’s a one-time favour that does not solve the problem.
I think my issue is if I choose to make a “donation” to a cause, which I view fair trade as, I would prefer to do it under my terms. Allow me to research to what organization I should contribute to, and give me a nice shiny tax receipt too please.
And not to derail this discussion, but it reminds me of the pathetic compensation that government programs for children/disabled/elderly give to dentists for work done. They give about 60% of the normal fee guide, so with my overhead of 65% I am losing money to serve these patients.
If I am going to be making a donation, I would prefer to do it under my own terms. This is why many dentists do not partake in these programs and have their own ways to give back to the community or give free treatment (like a free treatment day around Christmas). Unfortunately not participating in these government programs makes you look like you’re greedy.
I don’t understand the objection. Aren’t you choosing to make a donation when you buy coffee that’s marked as fair trade?
Don’t get me started about dentists. A dentist is just a sadist with newer magazines. 치과의사는나쁜사람이에요.
Nope, I am not. I don’t know specifically where the money goes to. I doubt the cashier at Loblaws will be of much help. Maybe you can help? Furthermore, as far as I know, there is no obligation for Loblaws to give all of the price increase to the farmers.
I’m not really a sadist though, less pain = happier patients = a more successful practice. Sorry for your negative experiences?
Sorry, I understand now, but not knowing what Loblaws does with the money is the same problem as not knowing what Charity A does with the toonie you gave to help earthquake victims in Country B. It’s a reasonable criticism of fair trade though, I agree. When I was at U of T, fair trade seemed to be more about the people buying the product than those who produced it.