Understanding Coffee: The Illusion of Fair Trade

By Arondo Holmes

Unfortunately, despite what consumers are told, Fair Trade coffee is neither the best coffee nor the fairest priced coffee in Honduras...

While I sit listening to my coffee roaster sing its song... like 100 maracas in unison, I ponder the fate of my coffee business and, more importantly, the future of coffee growers in Honduras (including myself). For those who do not know, coffee is the second most traded commodity in the world next to oil. Few people know how significantly coffee affects our lives. Coffee in developing nations like Honduras is akin to oil in that prices for this crop have the power to make or break the lives of millions of farmers, including about 100,000 families in Honduras alone.

What puzzles me is how oil can make so many producers so wealthy, while coffee leaves so many of its producers so impoverished. In the coffee industry, it is the brokers in the West who make the real money, not those who toil under the sun. It is the "Big Four" -- Sara Lee, Kraft Foods, Proctor & Gamble, and Nescafé -- that earn huge profits on coffee. Small companies like your local roaster can do fairly well depending on their business and marketing skills. But the coffee growers in Honduras and other poor countries today earn less per pound than did their grandfathers. The price per pound of coffee is at least one dollar less than it was in the 1980s.

Ted Lingle, a former president of the Specialty Coffee Association of America (SCAA) has said that, all things being fair, coffee growers should be earning US$2.00 to US$2.50 per pound. Were prices for growers ever to reach that range, I can assure you from personal experience that we would see a much different, more just, and better world.

The much-lauded "Fair Trade" coffee makes a lot of money for the retailers, as market-molded consumers scurry to buy the TransFair-labeled product. Unfortunately, despite what consumers are told, Fair Trade coffee is neither the best coffee nor the fairest priced coffee in Honduras, where it is called "Fair Trade Lite". It is the well-processed coffees with high cupping scores (or a reputation for such scores) that win the premium prices that are often passed on to the growers, not the Fair Trade coffees.

If you take a look at the prices consumers pay for Fair Trade coffees, the difference is about 90 cents or more per pound than for non-Fair Trade coffees. Yet, the growers of Fair Trade coffees often make only 5 cents more per pound. Consumers believe they are doing their part to help growers, but they are not getting the full story.

I feel that there is a need for Fair Traders who sincerely respect coffee growers and their livelihood to support prices that are realistic and in line with the growth in the costs of living so that growers can adequately provide for their families and also be able to improve their product without trying to cut corners due to the pressures of low prices.

Arondo Holmes
Article by Arondo Holmes
Arondo Holmes is the owner of a coffee farm near Santa Rita de Copán in the mountains of northwestern Honduras. He is the founder of Hondo Coffee in Manassas, Virginia and does all the roasting himself.

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