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What's Brewing

Fair Trade

[image, unknown] New Internationalist Issue 271

What's brewing

David Ransom argues that change is coming and the fair-trade movement is showing the way.

Illustration by JOE FLEMING

I get news that a favourite aunt of mine is not in good health. Gregorio and I wonder what to do and arrange to visit her. We pick up a plastic bag marked 'Happy Christmas' in Spanish and head for a local trout farm. He catches three fish, just like the ones in the Tambopata River.

We drive to my aunt's house with the fish and the bag. Inside this bag is coffee you cannot buy in supermarkets: cafe pergamino, 'parchment' coffee, complete with the husk and from a single farm in the Tambopata Valley. It was given to me on her chacra by Victoria, who is a member of the San Jorge co-operative. The beans are irregular and doubtless there are stray mementoes of the Valley in there too, though we haven't found any yet.

At my aunt's house, overseen by Gregorio, I take a baking tin, rest it on the stove, put the pergamino in the tin and begin to stir vigorously with a wooden spoon. I had assumed, because the husk is always removed, that leaving it on during roasting would damage the flavour. But Gregorio insists that it is improved. Slowly the house fills with the aroma of roasting coffee. Gregorio adds a little sugar. We grind the roasted beans, infuse the grounds in a pot of hot water, and there it is - smooth, mild, perhaps a hint of nuttiness in there somewhere, and most certainly not the slightest bit 'thin'. The three of us drink a toast to my aunt's good health, to Victoria and the coffee farmers of the Valley.*

So it is a simple matter to roast the bean and make a good cup of coffee. Victoria has done about 90 per cent of the work that went into making it back in Peru and certainly everything that determined its quality. Yet she never sees 90 per cent of what we routinely pay for it in the shops. How is this possible?

Well, the free-market explanation goes something like this. Manufacturers and retailers in the North have high costs. They invest in smart machinery and marketing. They pay high wages. It's only because people in the North are affluent that they can afford to spend their money on all that expensive coffee.

In the South, on the other hand, costs are low. Labour is cheap and there are no machines to pay for. If coffee farmers made a better living other poor people would want to join them, too much coffee would then be produced, prices would fall and market forces would duly reassert themselves, taking us back to where we began.

A perverse variant of this explanation informs the 'structural adjustment' policies that have been enforced throughout the South, including Peru, by the world's financial establishment. Because Southern societies are poor and in debt to the North they must cut government spending on things like education and health, 'privatize' everything and export more commodities like coffee. In this way the supply is increased, prices are reduced - and producers are impoverished.

So the rich in the North are rich because they are rich, the poor in the South are poor because they are poor. We are faced with an explanation that explains nothing, a circular argument merely describing the status quo.

The status quo is, however, unsustainable. Forty years of coffee-production in the Tambopata Valley threaten to destroy an entire regional environment. Not a single technical adviser, soil scientist, agricultural engineer or coffee expert has ever visited the Valley in all that time. The coffee business from the North has based itself in Juliaca or Lima, London, Tokyo or New York, and bought the product for peanuts.

Is it really beyond the wit of humanity, or of such a profitable trade, that even one environmental adviser, a single doctor, should be available to the people of Putina Punco? Can a trade that rewards its producers so little, that preys on their poverty in this way, be anything other than contemptible?

The outrage and sheer irresponsibility of this are hard to credit. But 'consumer' societies are impervious. They prefer not to see such things because they're bad for business. The consumer outranks the producer as a matter of principle and must be satisfied. Far better, and more profitable, to spread the mists of ignorance, peddle mythic images and flog the brew to aspirant power-breakfasters and lovers.

There is, however, something rather special about coffee. As coffee-growing has expanded in the last 50 years, it has mainly been taken up by small-scale farmers. Working with the same crop in the same place they have, quite naturally, formed themselves into co-operatives to share common problems. So a significant proportion of the world's supply of coffee is potentially controlled by the people who produce it.

This has created a unique opportunity, seized originally in 1989 by the Max Havelaar Foundation in the Netherlands. Other imaginative organizations have followed its example, creating a fair-trade network (outlined on pages 26 and 27) that now links consumers to producers around the world. The challenge it has accepted is to do this by taking pleasure in truthfulness and respect between people - and, goddammit, by promoting the enjoyment of truly delicious coffees that put the mass-produced blends to shame!

The Happy Christmas bag and a cup of coffee, approaching over a carpet of parchment beans on Victoria's farm.

CECOVASA is now starting to do business with Max Havelaar, Transfair in Germany and Cafedirect in Britain. I ask Gregorio to tell me, frankly, what he thinks of them.

'Well,' he says a little guardedly, knowing what I want to hear, 'it's only in the last couple of years we have begun to explore the possibilities of the comercio alternativo, of fair trade. So it's still a bit early to tell how it might work out. These things take time, you know.

'But it's already clear to us that in principle fair trade is very much in our best interests. There is a much more direct relationship with them than with most of our buyers. Fair trade offers us a ten-per-cent premium over the market price, which is necessary because we have to work harder to produce better coffee. I suppose the most obvious advantage to us is when the world coffee price falls below the minimum $120 or so per sack that the fair-trade organizations guarantee us. That hasn't happened in the short time since we've been working with them, thank goodness. But it provides us with an important assurance.

'The real issue is their long-term commitment to improving the quality of our coffee and the conditions of the coffee producers here. We in the co-operatives need help. With its new free-market policies the Government of Peru has pulled out of even the small amount of assistance it used to give us. We are now entirely on our own. The principles of free trade and co-operation do not, of course, rest easily together. We need help with education and healthcare for our members, with business know-how and marketing, and with improved administration.

'Remember Abraham, when he told you that nothing has changed in 40 years? He got it wrong, you know. It's worse now than before. With the exhaustion of our soils production has fallen. I get half the coffee from my chacra that I used to 20 years ago. But we shall never relinquish our co-operative, because we already know what it would be like without it, if we returned to the bad old days of the comerciantes.'

CECOVASA has done all that it possibly can to improve the position of its members. It has cut out the hated intermediaries after a prolonged and bitter struggle and taken control of coffee production. But it still has to sell the bulk of its coffee into the 'normal' trade. Forty years of hard labour have so far brought them little nearer to an escape from an international trade that impoverishes them. Nonetheless, small coffee farmers working with fair-trade organizations around the world have now begun to meet together to search for new options.

Can we, as coffee drinkers who sustain the international market, say that we have done as much? After all, the only thing that limits fair trade, and prevents the transformation of the coffee trade itself, is how much fairly-traded coffee we drinkers decide to buy. Even the small percentages of the market that fair trade accounts for now can have a disproportionately beneficial effect on the 'normal' trade, which doesn't like to lose its 'market share' to anyone. The trend towards 'gourmet' coffees, which emphasize the specific origin of the bean, indicates greater 'consumer awareness' and is another sign that change is brewing.

The question is not whether we should buy fairly traded coffee but why we buy anything else. (Quite incidentally, in the process of avoiding Nescafé we would also be recognizing Nestlé's role in pushing infant-formula milk in the South and assisting the long-running campaign against it.)

I have seen the difference fair trade makes, in Mexico as well as in Peru. When I was in Juliaca I saw how a couple of premium payments of $7,000 from Cafedirect had been used by the co-ops and their members. Small as it was, I knew how important this would be to them. A few extra dollars would help to pay school fees, or buy clothes for the children.

The minimum-price guarantee is some compensation for the collapse in 1989 of the international agreement to restrict production and maintain prices. For all its faults this agreement stabilized the market and sustained better prices, as subsequent experience has proved: when it collapsed, so did the price of coffee. In good measure this happened because the US lost its fear of 'communist subversion' and with it all interest in the fate of coffee farmers in Latin America and Africa.

Can a trade that rewards its producers so little,
that preys on their poverty in this way,
be anything other than contemptible?

The world's major coffee producers did come together in 1993 to form the Association of Coffee Producing Countries and introduce 'retention schemes' designed to control the flow of coffee onto world markets. This unprecedented solidarity has had some success in the past 18 months, but it is still too early to say that another sharp price slump may not be around the corner.

Fair trade in coffee is not, of course, entirely without its own limitations. The coffee still has to pass through the conventional roasting and retail channels. And we have to pay more in the shops for the extra cost of the better deal it gives to farmers. In this sense the trade is 'fairer' rather than 'fair'. All the farmers I spoke to felt that fair trade would eventually benefit both producers and consumers by reclaiming the resources that presently fall into the gulf between us. But the fair-trade movement is engaged with the principles and taking steady, practical steps to transform the situation.

My aunt, who is not given to extravagant views (or, it must be said, to drinking enormous quantities of coffee), nevertheless buys Cafedirect, the fair-traded brand that is now available in most British supermarkets. She even went to her supermarket to congratulate them for selling it. Hearing this, her friends have done the same, and are telling their friends. They will not be disappointed. Cafedirect is - like most of the new generation of fair-traded brands - a delicious, high-quality product with the added ingredient of information about how it is produced.

There's one thing left for Gregorio and me to do. CECOVASA is about to mark its 25th anniversary, its 'Silver Wedding'. There will be almighty celebrations in the Valley.

Among other things, the nine CECOVASA co-ops will stage a soccer tournament. I wonder whether I might not give Gregorio's San Isidro team a set of soccer shirts from England. We wander around the shopping malls of Oxford and seem to see nothing but cafes and coffee shops. Gregorio can't even find the cloth he needs to make a pair of trousers.

Eventually we stumble on a discount sportswear store. It is full of the stressed-out parents of brutish-looking boys. I take a look at the price tags. Equipping a team with shirts cannot be done for less than $1,000. This, Gregorio and I agree, is an exotic price to pay for displaying 'Manchester United', 'Liverpool' or even 'Oxford United' on the backs of the San Isidro soccer team - especially if they lose.

Meanwhile we go to London to meet Richard Hide, the coffee buyer for Twin Trading and Cafedirect. Richard is to visit the Valley later in the year. Gregorio has prepared a letter for him, asking him to become padrino - literally 'godfather', but perhaps more accurately 'patron' - of the festivities, and hoping that God will protect him. Why don't we present a Twin Trading/New Internationalist Challenge Cup for their soccer tournament? It's a fair deal.

I think of this trophy now, perched on the back of a coffee truck perhaps, ploughing through the dust of the deserts of southern Peru, rattling over the plains of the Altiplano, skirting Lake Titicaca, trundling up through the cold to the high peaks of the Andes, racing down the precipitous slopes into that most beautiful and terrifying valley of the Tambopata River, retracing the route out we took with the coffee.

'If we win the tournament we'll have a drink to celebrate,' Gregorio says to me as he slings his backpack over his shoulder and heads once more for passport control at London Airport. 'If we lose we'll have a drink to console ourselves. Either way I'll get out my harp, we'll make music and dance.'

As he leaves, the price of coffee falls below 140 US cents per pound.

* Subsequent experiments suggest that similar results can be obtained with even less effort by roasting the beans in a thick earthenware dish set in a hot oven for about 20 minutes. This can also be done with green beans, which are easier to find. Anyone with useful tips for readers should write to the Curiosities section of this magazine.

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©Copyright: New Internationalist 1995

New Internationalist issue 271 magazine cover This article is from the September 1995 issue of New Internationalist.
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