Field to Cup: Going Beyond Fair Trade (Part 4)

You’ve probably figured out by now, unless you’ve been living in a cave this is your first visit to our blog, that Higher Grounds isn’t your typical business. And we’re not even close to being your typical coffee company.

Most coffee-centered businesses are started by entrepreneurs who happen to like coffee. I can even imagine myself experiencing a thought process that might go something like this:

Wouldn’t it be fun to have my own business? I could be my own boss! That sounds great. Now, what’s something I like enough to sell to other people? Hmm… how about coffee? I love coffee! I think it’d be gnarly to hang out in a coffee shop all day & tell people what to do share my love of coffee with other people. And I could get rich earn a living doing it!

But Higher Grounds was borne out of something else entirely. Here’s the story:

Two Michigan natives spent a year living & working in the coffee-growing region of Chiapas, Mexico. When the year was up, they asked the coffee farmers how they could continue their support, even from as far away as Michigan. “Sell our coffee,” said the farmers. So that’s exactly what they did. They brought that unique relationship they formed with the farmers in Mexico to their coffee-loving friends in Michigan, & coffee beans from Chiapas made their way to the tiny original roastery in Leelanau County.

That close friendship we formed with the farmers in Chiapas serves as a model for our interactions with all our coffee suppliers. The ultimate goal, unlike for most businesses, is not to make a profit. Yes, of course we need to pay our bills & pay our employees, & as we continue to grow, there’s more capital involved. But our motivation lies on higher ground. (Like that pun? I’m so clever.) We don’t just buy beans from around the world: we’re committed to paying farmers not only a fair price for their beans but a premium on top of the global fair-trade standard, so our coffee-growing friends can do more than cover their costs. We want them to come out on top. (The standard import model of Buy Low & Sell High? Not our style.) And they truly are our friends: we meet the farmers face-to-face when annual Higher Grounds delegations visit coffee-growing communities. We also donate our time, money, & coffee to local & global grassroots initiatives.

What’s more, Higher Grounds founded a community-based nonprofit, On the Ground, to partner with organizations & communities to encourage sustainable development in global farming regions. We love providing our customers with opportunities to create social change.

So that’s our philosophy & our mission. But there are other forces at work in our world, forces that often complicate & challenge that mission. As I explained throughout the three other posts in this series, the fair trade movement has recently been bombarded with controversy. Next week, in the final installment, I’ll fill you in on exactly what HG is doing in the face of that controversy in order to stay true to our mission & maintain solidarity with our farming friends around the world.

Field to Cup: Going Beyond Fair Trade (part 3)

Okay, people. Time for the nitty-gritty. You’ve gotten the background, the history, some teasers. Now let’s get down to business.

I’d like to clear one thing up first. Many people interchange the terms fair trade & free trade. They’re not the same thing. Free trade is a policy in which governments agree not to tax imports or subsidize exports, for the mutual benefit of both parties. Prices under free trade are determined by supply & demand, & free trade implies open access to markets & market information.

While it may certainly coexist with free trade, fair trade is something else altogether. Fair trade is a movement with the primary aim of helping small-scale producers in developing countries work towards sustainable farming & business practices as well as improving trading conditions. Fair trade advocates paying higher prices to producers & raising the bar for environmental & social standards. (Check out Wikipedia’s pages on both terms for further explanation.)

And one more definition. Greenwashing is a term you’ll hear tossed around here and there, often by environmentally-conscious folks who are fed up with how trendy it’s become to be “green.” You know how hotel rooms frequently have those little cards in the bathroom promoting reuse of your towels in the name of “saving the environment”? Actually, the hotel industry isn’t really reducing energy waste very much: it’s a clever ploy to make a good impression on customers. That’s greenwashing: an act that appears to be environmentally conscientious (& might even be, just on a tiny scale) but is actually motivated by the desire for increased profit. (Take a second and think about the color of BP's logo. Coincidence? Hmm.)

Now that we’ve gotten the terminology straight...

Last week, I concluded by pointing my crooked little finger & calling out TransFair, the U.S. branch of  Fairtrade International (FLO, formerly the Fairtrade Labeling Organization) & the certifier for brands such as Starbucks & Ben & Jerry’s, for greenwashing. Here’s some more of that story:

In February of this year, TransFair changed its name to Fair Trade USA, applying for trademarks of that name & the term “Fair Trade Certified.” This move is a blatant attempt to exclusively brand a term that is supposed to encompass the whole fair trade movement. Some brands, such as Avon & Hain, use a very small percentage (as low as 2%) of certified fair trade ingredients in their products but are still able to take advantage of the “Fair Trade Certified” ingredient seal—the same seal you see on products that use a majority or even 100% certified fair trade components. Also, TransFair gets the same licensing fee whether a company uses a minimum or maximum percentage of those ingredients. A label that used to carry a strong message has been watered down to represent—well, not much. What’s more, these companies benefit from the marketing while not actually engaging in the kind of socially-just, sustainable, & environmentally-conscious business practices that define the fair trade movement. TransFair’s profit-driven act essentially represents its divorce from that global movement. As of December 31, 2011, Fair Trade USA officially resigns its membership in FLO.

 A few 100% fair trade companies you may have heard of—Equal Exchange, Theo Chocolate, & Dr. Bronner—use a label from Fair for Life, a program of the Institute for Market Ecology (IMO), instead. This label is only allowed on products with a majority of fair trade ingredients.

There are other fully committed fair trade organizations out there too, like the Fair Trade Federation (FTF), which screens applicants vigorously & only accepts dedicated Alternative Trading Organizations (ATOs). Higher Grounds is a member of FTF, & our coffee is absolutely-always-with-no-exception-100%-fair-trade.

On our packaging, you'll also see the logo for Cooperative Coffees (an importing co-op of community-based coffee roasters committed to fair trade relationships) & their "Fair Trade Proof" stamp. Go to fairtradeproof.org & click on Higher Grounds in the drop-down menu to see the contracts, cupping evaluations, bills of lading, & invoices that track our business relationships with each of our coffee suppliers. Now that's transparency.

So. What does all this mean for you, as a savvy & well-intended consumer? Here’s my best advice: read labels. Now that I’ve given you the skinny on what they all mean, you’ll know what you’re looking at—and what you should be looking for. If you see TransFair’s—oops, Fair Trade USA’s—logo, keep in mind that what you see may not be what you get. (Their new logo is on the right.) Check ingredient lists, & read up on the companies you support, so you can be informed about who’s greenwashing & who’s truly doing the good work that’s worth your hard-earned money. 

Higher Grounds believes fair trade should be about building face-to-face relationships with the farmers who grow our coffee & that these relationships should be mutually beneficial, not just profitable for first-world corporations. Next week, I'll fill you in on what we're doing to uphold & encourage equitable, transparent policies while supporting the real people whose life's work is to produce our favorite beverage.

Want to join the conversation, or just have a question about this whole rigmarole that you'd like me to address on this blog? Drop a line to jennifer@highergroundstrading.com. I'd love to hear from you!

--Jennifer

References:

“Joint Announcement from Fairtrade International and Fair Trade USA.” Fairtrade International. fairtrade.net, 15 Sep 2011. Web. 8 Nov 2011.

“Over 9,900 Upset Consumers Tell Fair Trade Certifier 'No Thanks' on Name Change.” Organic Consumers Association. organicconsumers.org, 14 Feb 2011. Web. 8 Nov 2011.

Robinson, Phyllis. “To Tell the Truth: Who Owns Fair Trade?” Small Farmers. Big Change. Equal Exchange. http://smallfarmersbigchange.coop/2011/02/01/to-tell-the-truth-who-owns-fair-trade-2/. 1 Feb 2011. Web. 8 Nov 2011.

Field to Cup: Going Beyond Fair Trade (part 2)

As promised, after a few weeks of dilly-dallying around with exploring the fine art of latte-crafting, I’m ready to dive back into the sticky issue of fair trade. Part 1 of this series concluded with some words from the Fair World Project, addressing Fair Trade USA’s decision to leave the larger Fairtrade International. That’s a whole lot of “fair” being tossed around in one sentence. My job in this segment is to provide an introduction. In order to understand the recent developments, it’s helpful to learn the back story.

First, some history.

Back in the 1960s and ‘70s, several Non-Governmental Organizations (NGOs) & some concerned individuals across Asia, Africa, & Latin America discovered a need: many producers of goods sold on the international market were very poor (as is still the case today), & they rarely got advice or support for their livelihoods. So the NGOs got together to create a handful of fair trade organizations, & they established relationships between them—relationships “based on partnership, dialogue, transparency, and respect” (Kocken).

At first, fair trade was most often associated with development trade, responding to poverty & disaster in southern regions & focusing on craft products. The NGOs helped establish fair trade groups in those regions, organizing & providing social services to producers there, & facilitating exports from politically- and economically-marginalized countries.

As the fair trade model became more & more successful, it spread to other regions, including Europe. In 1973, a group in the Netherlands began importing fairly-traded coffee from cooperatives in Guatemala. In the ‘80s, a Mexican priest with connections to both small coffee farmers & a Dutch NGO came up with the idea of a label for these fair trade products, to set them apart from other products on the shelf, & to give any company the opportunity to get involved in fair trade. The concept was a hit, & within a year of its debut, coffee labeled as “fair trade” had a market share of nearly 3 percent.

Similar non-profit labeling organizations were born across Europe & North America, & in 1997, Fairtrade Labeling International (FLO) was established to set international fair trade standards, certify production, audit trade, & label fair trade products. The latter has been a boon for mainstream fair trade business.

Then came the chain.

Beginning with the Netherlands’ group, alternative trade organizations (ATOs) in Western Europe, along with their NGO allies, began building relationships with small-scale coffee farmers, who previously had been exploited by mid-level traders (buy low, sell high—the standard model for profit—doesn’t generally work out so well for the little guy). The goal was to strengthen democratically-controlled coffee co-ops & build their capacity so any surplus would stay with the farmers. The co-ops also had a lot to learn: sustainable processing methods (to control the flow of their product into processors), successful business models (to avoid further exploitation & achieve profit), quality control, import/export systems, & internal education for their members. The people investing in this movement—“mission-driven traders, nonprofits, & visionary co-ops” according to Rink Dickinson, co-founder & co-president of Equal Exchange—weren’t in it for the money: there was no money.

The trade organizations had a lot to learn too, things like strategies for importing & quality standards. They also needed roasters who would be sympathetic to the fair trade cause & work with them on reasonable terms, & distributors & consumers who were interested in supporting small farmers. There were many challenges in getting the coffee supply chain going, & the process took a lot of patience from people willing to take risks. But by the late 1980s, the system was running smoothly—ready to take on another level of business in the U.S.

Growth means change.

It took a while to build alternative trade here in the States, where we didn’t have a giant network of people & organizations already familiar with the notion of fair trade (as in Europe). But as Europe grew, more producers entered fair trade networks, & the fair trade seals spread further. Conversations kept happening, particularly spurred on by Equal Exchange, one of the first fair-trade focused worker-owned co-ops in the U.S. And demand for specialty coffee, a product with a high profit margin, kept growing – so companies like Equal Exchange could afford to keep paying farmers a premium (much higher than the average world price) for their coffee.

In 1998, a U.S. nonprofit called TransFair USA was founded to negotiate terms between international coffee producers and stateside sellers. By this time, the coffee supply chain had strengthened to the point that product capacity had grown larger than the ATOs. So farmers, together with their allies, expanded the system to bring larger commercial companies into the fold, maintaining terms that the small farmers could work with. Many companies began to see the benefits that fair trade labels could provide, since U.S. consumers had a growing interest in supporting small farmers.

The motivation for this expansion was honorable: creating more opportunities for growth of fair trade practices. Higher Grounds was Michigan's first 100% organic & fair trade coffee roasting company. Since 2002, we've imported all of our coffees through Cooperative Coffees, the only 100% fair trade importing cooperative in the country. Yet even as we grew & spread our commitment to fair trade standards, the larger "fair trade" industry got watered down: a company could source just a small portion of its products from fair trade suppliers & still use TransFair USA’s fair trade logo. Through this “green washing,” control of the fair trade system began to shift into the hands of bureaucrats & multinational companies. That’s where the controversy begins.

So that’s where I'll pick up next week. Stay tuned!

 --Jennifer

References:

Dickinson, Rink, and Phyllis Robinson, ed. “An Analysis of Fair Trade: Reflections from a Founder (Part II).” Small Farmers. Big Change. 24 Oct 2011. Equal Exchange. Web. 1 Nov 2011.

Kocken, Marlike. “Sixty Years of Fair Trade: A Brief History of the Fair Trade Movement.” European Fair Trade Organization. Nov 2006. Web. Available: www.european-fair-trade-association.org/efta/Doc/History.pdf. 1 Nov 2011.