Four ways to help the Third World's coffee farmers

Coffee farmers around the world have become destitute in the last few years, following the collapse of prices in international coffee markets. Prices plunged so sharply – from about $1.50 a pound to under 50 cents a pound – that coffee farmers in Nicaragua, Guatemala, Mexico and other nations let their crops rot in the field. At those prices, it was not even worth while to harvest the beans. Many of the illegal migrants into the U.S., as well as many of those who died while being smuggled across the U.S. border, were destitute coffee farmers.

Why did the price of coffee collapse? The World Bank, the world's largest development agency, along with other international development agencies, encouraged several Third World countries to become major coffee exporters. These agencies' chief success story, from their point of view, was Vietnam, a country that had produced little coffee just a decade ago. Using foreign-aid financing as well as state funds, Vietnam converted forested mountains into coffee plantations. Vietnam soon became the world's second largest coffee exporter, after Brazil.

The World Bank's "success" was short lived, however, with losers far outnumbering winners. The losers include not only the world's coffee farmers, many of whom have become destitute. but also the tribal peoples in Vietnam's mountain region, who lost their traditional lands to make way for coffee production. Ironically, Vietnam's state coffee company has also become a victim, and it is now trying to cut back on its unprofitable production. Of course, western taxpayers, whose foreign aid created the world coffee crisis, were also made victims, through the higher taxes we unknowingly paid to finance this destruction.

To aid the plight of coffee farmers, Westerners have several options:

1. Buy Fair Trade Coffee

The Fair Trade Movement tries to protect some of the world's coffee farmers from the glutted coffee marketplace by providing them with assistance. When you buy Fair Trade coffee, you are, in effect, "adopting" a coffee cooperative, much as you might adopt a poor Third World family or a Third World child through a Save the Children or Foster Parents program. The cooperatives that sell fair trade coffee receive $1.26 per pound for their coffee ($1.41 if it is organic), a substantial premium over the normal market price.

More than 300 coffee cooperatives in some 20 countries participate in fair trade. This represents less one percent of the world coffee trade. Although many question the benefit of Fair Trade coffee, it can act as a band-aid for the few farmers who are adopted. However, it can never provide a lasting solution for the vast majority of the world's coffee farmers, and it can even be a mixed blessing for those who join the fair trade system: Those who join often resent the expensive certification process that they must undergo, and the collectivization and loss of independence that comes with membership in the fair trade club. Even the financial benefits can vanish. Of the $1.26 per pound that the cooperatives get, farmers report receiving as little as half as much, leaving them, in many cases, no better off financially. For more on the pros and cons of fair trade coffee, see Fair Trade FAQs.

2. Buy Whole Bean Coffee

The world's coffee farmers need higher coffee prices to earn a fair living. One way to raise prices is avoiding mass market ground coffee, which typically contains coffee twigs, dirt, and other impurities -- government regulations allow up to 30% of a coffee package to contain non-coffee materials and still be sold as coffee. When consumers buy whole bean coffee, they raise the consumption of actual coffee. By increasing the demand for coffee, all coffee farmers, not just a few, benefit.

Some consumers purchase packages of so-called gourmet coffee drinks, with names like "Mocha Hazelnut Delight," thinking they are made from specialty beans that help to preserve niche coffee markets. These drinks, in fact, rely on poor quality robusta coffee beans with a poor taste but high-caffeine content (twice the caffeine content of a quality arabica), By heavily flavoring the coffee drink, Kraft and other manufacturers of these drinks can overpower the poor flavor of the robusta while utilizing its caffeine content. It is the poor-quality robusta bean, produced by countries such as Vietnam, that has flooded the world coffee markets and depressed coffee prices.

Instant coffee also tends to be made from robusta beans. Whole bean blends can also mix in robustas with better tasting arabicas: The robusta lowers the cost per pound while the arabica provides the premium flavor. For many, the combination of robusta and arabica represents an acceptable compromise between price and flavor.

3. Buy Specialty Coffee

In the same way that geographic microclimates give wines from different regions their particular characteristics, leading to distinctive wines from virtually every valley in every wine growing region of the world, coffee beans have immense variety due to the unique conditions under which they are grown, conditions that include not only the height at which coffee is grown (the higher the coffee plant, the slower its maturation and the finer the bean) but the amount of sun and shade it receives, and the nutrients in the soil. Coffee is inherently a niche product, ill-suited to mass production techniques if its remarkable qualities are to be captured.

When consumers purchase specialty coffee beans, they are encouraging this niche market, which is overwhelmingly supplied by small farmers selling through distribution channels operated by niche importers. For more information about the politics within individual coffee growing countries, and the extent to which their governments allow small farmers to reap the benefits of coffee production, see our FAQ section, as well as our country pages.

4. Reform the World Bank and Other International Organizations That Harm Small Farmers

Before the World Bank encouraged countries ill-suited to coffee production to enter the coffee marketplace, small coffee farmers around the world were doing relatively well. To return to that period of relative prosperity, we need to reform the institutions that have caused so much havoc.

The organization with the best record in the world at reforming the World Bank is Probe International, a Toronto-based environmental group that works with citizens groups around the world. Because no organization has a better track record than Probe International, all profits from Green Beanery's operations go to Probe International, to further its work in reforming the World Bank and other multilateral organizations that operate in coffee producing countries. If you would like to support Probe International directly, you may make a charitable donation to either Probe International (tax-deductible for Canadian donors) or the Probe International Foundation (tax-deductible for U.S. donors).

Articles critical of Fair Trade coffee

Boycott Burundi
National Post   May 8/2004
Bureaucrats and unionists benefit, but the world's poorest growers are excluded or pay crushing certification fees for dubious service.

Bitter brew
National Post   April 8/2004
'The fair trade' coffee movement arose to aid the Third World's destitute coffee farmers. Too bad it ignores the perpetrators of the harm.

Articles supportive of Fair Trade coffee

Buy green Fair Trade coffee beans.

Worldwide Sustainable Coffee Fund
October 27/2005
With the goal to promote quality on a large scale in the coffee business, from the tree to the cup, the Worldwide Sustainable Coffee Fund is a proposal on how to finance and execute the activities to this end.

Do you like your beans green?
Toronto Business Times   October 9/2004
The Green Beanery, a non-profit company that aims to help small coffee farmers in the Third World, has become Canada's newest merchant in specialty green coffee beans.

Oxfam to launch Progreso fair trade coffee shops
nosweat.org.uk   May 14/2004
Oxfam and the UK’s largest independent coffee roaster, Matthew Algie, announced plans to launch a chain of fair trade coffee shops, called Progreso.

Fair Trade coffee
Cafe Unidos   May 10/2004
Brief history and definition of Fair Trade coffee.

The ethical trade initiative
ethicaltrade.org   April 22/2004

Coffee markets, new paradigms in global supply and demand
The World Bank   March 1/2004

Vietnam and the world coffee crisis: Local coffee riots in a global context
Focus on the Global South   March 1/2004
Even as coffee prices collapse coffee growers are forced to intensify the use of fertilisers and raise production to try to meet debt repayments. The result is usually bankruptcy.

The global coffee trade
Stanford graduate school of business   February 19/2004
When you buy your daily cappuccino, the farmer who grew the coffee beans receives less than one percent of what you pay for it. About 6 percent of the price you pay for coffee in the supermarket goes to the farmer.

The espresso is coming! The espresso is coming!
Dunkin' Donuts press release   February 5/2004
Dunkin' Donuts' espresso-based beverages will only use Fair Trade Certified coffee beans. Fair Trade coffee beans are certified by an independent nonprofit organization, TransFair USA.

2003 Report on Fair Trade
2003 Report on Fair Trade Trends in US, Canada & the Pacific Rim   June 1/2003
The second annual Report on Fair Trade Trends provides an overview of the Fair Trade movement in North America and the Pacific Rim.

Fair Trade trends
Fair Trade Toronto   June 1/2003
The report details the industry structure, sales, product sourcing, employment, Fair Trade monitoring, certification and labelling, services to producers, and advocacy.

Profile of Denise Sutherland Fairtrade farmer
June 1/2003
Member of Langley Park Fairtrade Group on St Vincent and representative of Windward Islands Farmers Association.

Fair Trade: The time is now
April 28/2003
TransFair Canada announces the launch of the second National Fair Trade Week.

Fair Trade: How it started and why it's needed
April 1/2003
International trade in food commodities has increased significantly but the benefits have rarely reached the producers. Millions of landless labourers and small farmers in southern countries do not earn enough income to meet their basic needs.

Fair Trade: How it works and who it benefits
April 1/2003
The growing world-wide network of Fair Trade labelling organizations, of which TransFair Canada is a member, now numbers seventeen. Altogether the movement supports more than 800,000 producers in 45 countries.

An overview of fair trade and organic coffees
Agro Eco Consultancy   February 11/2003
As the overall coffee consumption is declining in most of the countries studied, both fair trade and organic coffees continue to grow at high rates.

Fair Trade in the windward islands
Association of Caribbean Farmers   February 1/2003
The first Fair Trade banana from the Windward Islands was shipped in July 2000. Farmers were able to see that Fair Trade can work and that it brings a lot of benefits.

TransFair Canada 2002 financial statement
TransFair Canada   January 27/2003

Reference guide - trade in agricultural products (doc file)
SNV Netherlands   September 1/2002
An overview of some of the main issues involved in (foreign) trade, with a special focus on small-scale producers of agricultural products in developing countries.

Scarcity and surfeit, conflict and coffee in Burundi
African centre for technology studies   August 1/2002
This study re-examines the conflict in Burundi and the conflict management initiatives and processes aimed at mitigating it in the light of the contribution of environmental and ecological factors in causing violence.

Technology and globalization
University of Sussex   June 1/2002
Who gains when commodities are de-commodified?

Vietnam and the world coffee crisis: Local coffee riots in a global context
Focus on the Global South   March 1/2002
Even as coffee prices collapse coffee growers are forced to intensify the use of fertilisers and raise production to try to meet debt repayments. The result is usually bankruptcy.

Mugged: Poverty in your coffee cup
Oxfam America - Make Trade Fair   January 1/2002
There is a crisis destroying the livelihoods of 25 million coffee producers around the world. The price of coffee has fallen by almost 50 percent in the past three years to a 30-year low.

Challenges facing Fair Trade: which way now? (doc file)
Paper for the DSA conference 2001    September 12/2001
Fair Trade faces challenges at both ends of the supply chain, reflecting the dual roles of Fair Trade as a business and development instrument.

Coffee markets in east Africa
Centre for Development Research, Copenhagen University   September 1/2001
Local responses to global challenges or global responses to local challenges?

Agricultural exports of developing countries: unlocking the potential
United Nations conference on trade and development   July 16/2001
Coping with competitive markets and market barriers while maximizing the opportunities of niche markets and organic agriculture.

Rapid commodity assessment series
Development Alternatives Inc.   July 1/2001
Prepared for the USAID-funded Haiti hillside agricultural program.

The 'latte revolution'?
Centre for Development Research, Copenhagen University   June 1/2001
Winners and losers in the re-structuring of the global coffee marketing chain.

Discussion on organic coffee in the year 2000
International Coffee Organization   September 28/2000
Summary of a round table discussion on coffee produced by “organic” farming methods and the position in the year 2000.

Sustainable, organic and speciality coffee production, processing and marketing
Organic Agriculture at FAO   February 1/2000
Discussion on how to produce better quality coffee, sustainable coffee and organic coffee, using the experience of current practitioners and the combined knowledge of the group and the coffee world.

The U.S. organic market
Harvard Institute for International Development   February 1/2000
This paper reviews and analyzes what is known about the U.S. organic market and expectations for its growth and development.

Who benefits?
International Institute for Environment and Development   January 30/2000
This report is a first attempt to increase understanding of the social impacts of environmentally-driven trade.

Sustainable coffee at the crossroads
The Consumer’s Choice Council   October 15/1999
Coffee is one of the most powerful and universal commodities in the world today. It is the second most traded commodity after petroleum and a vital source of export earnings for many of the developing countries that grow it.

Trouble brewing: the changing face of coffee production
World Resource Institute - Global Environmental Trends   January 1/1999
For well over a century, coffee has been a major export from Latin America, shaping both the economy and the natural landscape of the region.

Merging ecological and social criteria for agriculture: the case of coffee
University of Maryland   December 1/1997
What conclusions can be drawn concerning the efficacy of coffee certification as a tool for conservation and social reform?

Imperfections in the coffee market
University of Groningen   April 1/1997
This study has investigated the market of one agricultural sector. This sector concerned the coffee production and marketing in Indonesia.