Coffee: Not So Heavenly After All
By Jennifer Altavilla
Recent events suggest the taste of coffee is not the only bitter part about it. The ugly truth is that America’s beloved beverage is polluted with the bitter practices of the coffee industry, most notably the lack of protection of the coffee growers themselves, the disadvantaged, underappreciated backbones of the industry. On December 16, 2006 members of the human rights group Oxfam and the local Ethiopian community gathered outside the Westlake Center Starbucks in Seattle, Washington to protest Starbucks’ refusal to recognize the rights of Ethiopian coffee farmers. Oxfam launched this campaign, which culminated in the December 16 Starbucks Day of Action, on October 26, more than a year after discussions between Starbucks and Ethiopia commenced.
Over that 12 month period, Starbucks continually refused to allow Ethiopia to trademark and thus assert ownership over its three specialty coffee brands: Harar, Sidamo, and Yirgacheffe. If such a licensing agreement was reached, Ethiopia would have been able to control the marketing of their coffee and, consequently, the price, thus allowing the poor nation to reap a greater share of the profits (3).
Starbucks obstinacy has angered members of the world community. Eighty-nine thousand people in 70 countries have, in support of Oxfam’s campaign, faxed Starbucks CEO Jim Donald, beseeching him to start recognizing the rights of the Ethiopians (3). Considering coffee represents 54% of Ethiopia’s GDP and 90% of its total exports, and considering 15 million Ethiopians are entirely dependent on the coffee bean, this plea is certainly valid (1). The most disturbing fact of all is that these industrious farmers receive only 5-10% of the retail value of the coffee, a product that can sell for $26 per pound (4). Seth Petchers, Oxfam’s Make Trade Fair campaign leader, revealed the reason for why Oxfam’s Starbucks Day of Action was so enthusiastically supported: According to him, the protest was successful because “knowing that farmers only receive around 3 cents for a 3 dollar cup of coffee leaves a bitter taste with customers” (3).
The hotly contested debate of the licensing rights of the Ethiopian coffee farmers begs the larger question: how can the farmers protect themselves and receive the profits they deserve? Ethiopian trademark rights have already been recognized in many European nations and also in Canada and Japan, a step property experts say could help to end, or at least lessen, the devastating poverty that ravages Ethiopia. Still, that one step is not enough to help the millions of other coffee farmer in Africa and South America that receive a pittance for their labors. Many economists, environmentalists and humanitarians believe Fair Trade, a set of regulations designed to improve the standard of living for workers in an array of agricultural industries, is the answer. According to Fair Trade laws, an importer must pay the coffee grower a minimum of $1.26 per pound for any coffee which is Fair Trade certified and which is also marked with the Fair Trade symbol. This price floor eliminates the middlemen (the roasters, distributors, etc.), thus ensuring a higher price for the grower, but not the consumer (6). The stringent Fair Trade international criteria also allow farmers to have credit. Under the policy importers can provide pre-harvest financing of up to 60% per order (7).
In addition, Fair Trade policy provides technical assistance to farmers that can help them develop organic growing techniques or other sustainable practices. Because Fair Trade law guarantees farmers a fixed price, they no longer feel dependent on mass production and are encouraged to develop or continue the practice of shade grown coffee, coffee that is grown alongside other plants within its natural environment. Shade grown coffee does not require fertilizer and thus helps reduce soil pollution. It also does not require the clear cutting of forests and so helps prevent soil erosion and the consequent water pollution. Lastly, shade grown coffee provides habitats for songbirds and other animals and preserves their rainforest habitats. Although shade grown coffee is less productive than mass produced, “farmed” coffee, it is of much higher quality. The higher quality product and lower production yields encourage higher prices and consequently more profits for the coffee growers (5).
Although Fair Trade promises to lead to the economic self-sufficiency of the producers, equitable international trade, and sound environmental practice, Fair Trade is not without its share of detractors, democratic and republican alike. Conservatives see the fixed price as an agricultural subsidy that could impede economic growth. They believe that Fair Trade could lead to excess product if current producers produce more of the product and new producers, intrigued by the new policy, enter the market. However, proponents of Fair Trade counter that the new price could cause some of the old producers to leave the market, thus stabilizing the price (or possibly raising it) for the ones that remain.
Liberals see Fair Trade as not being radical enough. Truthfully, Fair Trade is directly dependent on the consumer. Consumers need to be educated on what Fair Trade stands for and how it benefits both the producer of the product and himself. Fair Trade requires constant promotion; it will never work if people do not buy Fair Trade certified products. Therefore, in order for Fair Trade to be successful, it needs brand loyalty and a marketing scheme powerful enough to encourage people to turn away from the brands they have been accustomed to (5,8).
Although Fair Trade has a long way to go before it becomes an integral thread in the fabric of American consumerism, recent statistics prove its success is promising. In 2005, certified sales of Fair Trade products were $1.1 billion worldwide (5). According to the Fairtrade Labeling Organization International, European Fair Trade sales have been increasing by 20% each year since 2000 (8). A 2002 American poll by Cone/Roper revealed that 81% of Americans would switch to Fair Trade products if quality and price were equal (2). Proponents of Fair Trade must keep persevering; since Starbucks and other big businesses will not help the farmer, will not help to ease world poverty, the common people must take that burden upon themselves.
Sources:
1. Aepy, Madeleine. “Ethiopia Argues Trademark Would Give Coffee Growers an Extra Shot.” 11 December 2006. 3 January 2007 < http://business.timesonline.co.uk>.
2. “Coffee Program.” 1 November 2005. 3 January 2007 <www.transfairusa.org>.
3. DaSilva, Helen. “Activists in Seattle Join International Call for Starbucks to Play Fair.” 16 December 2006. 2 January 2007 < www.oxfamamerica.org>.
4. DaSilva, Helen. “Starbucks CEO Meets with Ethiopia Over Ownership of Coffee Names.” 29 November 2006. 2 January 2007 < www.oxfamamerica.org>.
5. “Fair Trade.” 3 January 2007 < http://en.wikipedia.org>.
6. “Fair Trade Coffee.” Global Exchange. 3 January 2007 < www.globalexchange.org>.
7. “Fair Trade Coffee.” 3 January 2007 < www.groundforchange.com>.
8. Hulm, Peter. “Fair Trade Coffee.” Magazine International Trade Centre. 3 January 2007 < www.tradeforum.org>.
