Exceeding Fair Trade

March 15, 2013

productor Leonidas Cantarero 096

As a coffee farmer and one of the founders of THRIVE Farmers, I have inside experience and interact with over 600 coffee farmers in three coffee farming countries. As the THRIVE model grows, the question of how THRIVE is different than Fair Trade is the big question asked repeatedly. Admittedly a complex subject, THRIVE’s goal is being transparent with our ultimate mission of connecting the farmer directly to the consumer.  And if you support Fair Trade, then you have shown that you value producers and we are confident you will love Thrive Farmers.

Kudos to Fair Trade – The impact of Fair Trade within the coffee world has undoubtedly changed the way consumers view their purchase of coffee. Fair Trade has done an incredible job at raising the public awareness about the plight of the farmer and the inequities in the value chain and we believe that, once educated, people genuinely care about what they purchase.

With that said, there is the opportunity to move beyond Fair Trade.

At the core of the Fair Trade model,  Fair Trade was designed as an “insurance policy” to assure that farmers didn’t lose money if the market crashed.  Fair Trade was created to protect farmers from their production costs exceeding the revenue earned for their coffee.  However, in the modern international markets, the Fair Trade “minimum is largely irrelevant”  because commodity prices for coffee are consistently above the Fair Trade minimums. (Fair Trade USA, 2011)

The Fair Trade model also requires farmers to be a part of organizations such as cooperatives. While this structure has many well-documented benefits, it prevents farmers from capitalizing on high market prices.  According to Fair Trade USA, “Though high prices can benefit individual farmers who have coffee to sell, they can challenge producer organizations that signed contracts early in the year….then watched as prices rose to unexpected heights.” (Fair Trade USA, 2011).

Economic research in Mexico and Nicaragua has confirmed this, showing that while Fair Trade provides a kind of safety net, it also prevents farmers from taking advantage of high market prices – and they remain locked in the cycle of poverty, barely making enough to cover the costs of production (Bacon, 2005, 2008; Barham et.al, 2011; Beuchelt and Zeller 2011).

know_who_growsFair Trade was not designed to help farmers earn more money or participate in the revenue downstream closer to the consumer.  Notwithstanding the Fair Trade movement, many farmers are still leaving coffee because they struggle to make enough to live. By removing middlemen and connecting producers to the market value of coffee they are able to earn far more than ever before, sufficient to support their family, and stay on the land, and produce great coffee. Now what is good for the consumer is also good for the farmer.

One other missing component of many certifications, including Fair Trade is the lack of any connection to quality outcomes. The THRIVE system is an earned system, the farmer is paid a percentage of the sale price, so higher quality coffees that sell for more money allow farmers to earn incrementally more. Farmers are paid every two months based on prorata share of revenue generated to ensure more continuous cash flow. The goal is ultimately to get to monthly payments as opposed to every other month, but systems must be built to ensure accuracy and transparency. Additionally, in the THRIVE Farmers System,  a farmer is directly rewarded for providing the consumer with better quality coffee. Consumer demand for high quality agricultural products is seen in the shift in the food industry toward supporting local farms and buying local. THRIVE is taking the sourcing local movement to a global scale in regards to coffee.

No model or program certification is without area for improvement, so Fair Trade has its value and like our young system there is room to continue to grow and improve the lives of the farmer.  A farmer-direct supply chain is the next great step in being part of a solution to the real economic problems of coffee producers. People joining the Fair Trade movement have “voted” for social justice in coffee.  Now Thrive Farmers gives you a fresh and sustainable response in taking the next step in making a socially just decision with your daily cup.

signature-ken

Ken

 

Fair Trade USA. (2011)  Fairtrade International Announces Changes to Fair Trade Coffee Minimum Price, Premiums and Standards Fair Trade. [Press release]. Retrieved from http://www.fairtradeusa.org/press-room/press_release/fairtrade-international-announces-changes-fair-trade-coffee-minimum-price-p

Bacon, C. “Are Sustainable Coffee Certifications Enough to Secure Farmer Livelihoods?  The Millennium Development Goals and Nicaragua’s Fair Trade Cooperatives.” Globalization 5(2008):259-74.

Barham, B.J., M. Callenes, S. Gitter, J. Lewis and J. Weber. “Fair Trade/Organic Coffee, Rural Livelihoods, and the ‘Agrarian Question’: Southern Mexican Coffee Families in Transition.” World Development 39(2011):134-45.

Beuchelt, T. and M. Zeller. “Profits and Poverty: Certification’s Troubled Link for Nicaragua’s Organic and Fairtrade Coffee Producers.” Ecological Economics 70(2011):1316-24.

 

3 thoughts on “Exceeding Fair Trade

  1. This is a good explanation Ken. As a proud partner with Thrive, I tout the strengths of the Thrive model constantly. The fair trade question is always brought up. My answer is that Thrive picks up where fair trade leaves off, and brings the market all the way home to the farmers. I read about Paul Rice and the beginnings of Fair Trade in the US. He actually started out like Thrive- bringing market value back to farmers. But in scaling that model to “reach more people” it has lost impact for farmers, where we most intend it. By keeping farmers first (rather than scalabilitiy, or other grand visions), the impact of the Thrive model remains profound, and I am proud to be associated with it!

  2. Cliff Young says:

    Very well said! i am looking forward to following your “movement”.

  3. […] fair trade has done an incredible job of raising public awareness about the plight of the farmer, it still did […]

Join the Conversation

Your email address will not be published. Required fields are marked *

©2014 THRIVE Farmers