Wake up and smell fair trade's foul wages, Canadian roasters say

from The Gazette

Minimum price for coffee growers hasn't increased in a decade
KATHRYN YOUNG, CanWest News Service

Coffee drinkers who prefer a shot of social justice with their morning java might be surprised to learn the minimum price paid to fair trade coffee-growers hasn't changed in 10 years.

"It's like not taking a raise in 10 years," said Monika Firl, producer relations manager for Co-operative Coffees - a group of 22 small coffee roasters in Canada and the United States who import only organic fair trade coffees.

"Everything is slower than it should be," said Robert Clarke, executive director of Transfair Canada, which certifies Canadian businesses that sell fair trade products.

Coffee producers are assured a minimum price - $1.19 U.S. per pound of Arabica coffee beans, or $1.21 depending on what part of the world the coffee is grown in - even when the volatile market price drops below that.

"I wish it was $20 a pound," said Clarke, who considered unilaterally offering a higher price, but was told that wouldn't show unity with FLO - Fairtrade Labelling Organizations International - which monitors and certifies the coffee-growing co-ops to which farmers belong, as well as sets the minimum price. Transfair Canada is one of 20 FLO members, along with three producer groups representing Africa, Asia and Caribbean/ Latin America.

The Caribbean/Latin American group proposed a nominal increase in the minimum price last year, but FLO said it wanted to overhaul the entire process for evaluating how and when minimum prices are set for all fair trade products, not just coffee, Clarke said. FLO's answer on a price increase is expected in early October.

"In my eyes, it shouldn't impact the consumer," he said, citing the example of VIA Rail, which moved last year to offer only fair trade certified coffee. The per-cup increase in price would have been only 1.2 cents, so the company opted not to charge consumers more.

Fair trade coffee pricing is complicated. On top of the minimum price, coffee growers receive a social premium - increased in June to 10 cents per pound from 5 cents - that helps communities build schools, health centres and other improvements. And an organic premium - raised to 20 cents from 15 - is paid to organic coffee growers since their costs are higher.

Meanwhile, Co-operative Coffees - which includes five Canadian coffee roasters in Toronto, Whitehorse, Chicoutimi, Montreal and Almonte, Ont. - went ahead two years ago to increase the minimum price they pay for their coffee. Subsequent increases mean they pay $1.56 U.S. (including the two premiums) and will propose increasing that to $1.61.

"It ultimately didn't affect our price (to consumers)," explained Craig Hall, president of Equator Coffee in Almonte. Although the co-operative pays more for coffee, it also eliminates the middleman by dealing directly with coffee producers.

Most coffee consumers don't realize the FLO minimum price hasn't changed in 10 years simply because pricing is a complicated issue to explain, Firl said. FLO has not wanted to set the bar on prices too high, because it might scare off new licensees wanting to sell fair trade products.

"That's been the standing argument for about 10 years now," she said, adding she'll be surprised if FLO finally decides to increase the price.

Fair trade coffee sales in Canada have risen an average of 52 per cent a year since 2002.