Fair Trade Coffee
According to the World Fair Trade Organization and the other three major Fair Trade organizations (Fairtrade Labelling Organizations International, Network of European Worldshops and European Fair Trade Association), the definition of fair trade is "a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade". The stated goal is to offer better trading conditions to marginalized producers and workers. Fair trade organizations, along with the backing of consumers, campaign for change in the rules and practice of conventional international trade. However, not all coffee producers are happy with the methods or results.
Fair Trade organizations promote a trade environment in which the coffee importer has a direct relationship with the coffee producer, excluding the middlemen. Coffee importers provide credit to certified farmers to help them stay out of debt with coffee traders so they can develop long-lasting trade relationships. Producer organizations are paid a floor price (Fairtrade Minimum Price) of US$ 125 cents per pound for Fairtrade certified washed Arabica and US$ 120 cents for unwashed Arabica, or the market price, if higher. The free trade price of coffee rose above this minimum in September 2007, but due to recent economic events, the free trade price dropped back below this minimum in October 2008. The fair trade price for (conventional natural robusta) coffee has been $1.01 since June 2008 The price of conventional commodity coffee was also over $1 in 2008, but about $0.70 in 2009.
Fairtrade certification is not free; there is an application fee, initial certification fee, membership dues, annual audit fees and more. Certification can cost thousands of Euros for a single plantation. Large corporate farms can often handle the paperwork and recuperate the cost of certification more easily than small, independent farms. As a result, there are plenty of small, independent farms that are not Fairtrade certified even though they meet or exceed the Fairtrade standards.
Read more about this topic: Economics Of Coffee
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