Lowest Prices, Slavery Guaranteed

“As soon as we have discount stores, we have slavery. As soon as we have major consortium retailers with every conceivable item at prices so low, then we have the economy of slavery. I say that because the only way they can do that is to buy the products at a cheaper price from people who earn a pittance. ”

Wells Trenfield, Managing Director of Jasper Coffee, is passionate about Fairtrade. Within moments of meeting him it is clear that he could not only talk all four legs off a donkey, he could also persuade it to walk to the nearest café for a Fairtrade latte afterwards.

Poverty, Wells argues, is about politics, and the solutions are largely outside the control of the people most affected. “That’s why I like Fairtrade – because it returns that empowerment of their own destiny into their own hands. To bring themselves out of poverty. Not asking somebody else to do it for them.”

Cameron Neil, of Fairtrade Labelling Australia & New Zealand, says that “Australians don’t fully appreciate the power of their purchases to empower farmers and workers and fuel development. Aussies understand sweatshops and factory exploitation, and many choose to avoid or boycott ‘bad’ products. Fairtrade is about the next step – people investing in creating a better world through choosing products and buying from businesses that ‘do good’ rather than just doing no harm.”

Cameron points out that Fairtrade is a very different paradigm to the old idea of alleviating poverty through charity. It’s the difference between a village in the hands of a charitable organization, saying “Look at what they did for us. We’re excited about what they will do for us next,”  and a  Fairtrade village that says, “Look at what we’ve done. We’re excited about what we can do next.” They have control of their own destiny, and the power to make the changes that are important to them. That’s a power we take very much for granted in developed countries.

Imagine you are a Peruvian coffee farmer. Or Ethiopian, Colombian, or Papua New Guinean. This is subsistence farming. It’s a small holding – you produce maybe 4 bags of coffee a year. You have no electricity, no mobile phone or internet, and no way of knowing the current price of coffee on the NYC (the New York Coffee exchange, where coffee prices are set by traders. It has all the hallmarks of a financial market – traders, futures, and speculation.). You don’t know that coffee is currently trading at a 13 year high.

You sell your coffee to an agent who comes to your farm gate (if you are lucky. If you are unlucky you trek 40km down a mountain with your coffee on the back of a mule, quite likely getting mugged along the way, but more about that later.). The agent sorrowfully shakes his head and tells you the NYC is tragically low. He would love to give you a better price for your coffee, but even he has to make a living.

He gives you a pittance – perhaps $4.10 per kg –  for the 4 sacks of coffee that are your total output for the year. You take that money and eke out a year’s existence with it, and there is nothing you can do but hope that the price will be better next year. Those 4 sacks of coffee are all you have to sell.

There, but for an accident of birth, goes you – stuck in a cycle of endless, extreme, irrevocable poverty.

Enter Fairtrade.  Kimaro of the Kilimanjaro Native Co-operative Union famously told the G8 countries in Edinburgh in 2005: “Pay us a fair price for our coffee, and we will make poverty history for ourselves.” Fairtrade, of course, guarantees that fair price. Farmers know that they will receive at least the Fairtrade minimum for their coffee every year. But that, as it turns out, is not the revolutionary aspect of Fairtrade.  The world-changing, earth shaking feature is the Fairtrade Premium.

To be certified as Fairtrade, farmers must first organize into a democratically run co-operative. This is their business, which they own collectively. The co-op buys the coffee from the farmers and pays them the negotiated price – always at least the Fairtrade Minimum, but usually quite a bit higher. Then the co-op sells the coffee beans to a Fairtrade buyer . (The buyer is also certified. To guarantee transparency and authenticity, every step of the Fairtrade chain from bean to cup is certified and regularly audited.) The co-op receives both the fair price and a Fairtrade Premium of 10c(US) per kilo.

Here’s where the revolution begins. The co-operative then decides, democratically, what their most pressing problem is, and uses the premium to solve it. Because the premium is paid per kilo of coffee, and it’s paid to the collective rather than to the individual farmers, it amounts to a significant sum that can achieve amazing things for the whole community. Things we take for granted, like education and healthcare.

That’s the premium for one year. The next year, they are free to tackle the next problem, with the next premium. Meanwhile the farmers are able to increase their personal standard of living with the fair price that they receive, and the stability of income provided by the Fairtrade minimum price and their stable trading relationships within the Fairtrade system.

Fairtrade farmers run their own business – they are not just farmers anymore. They own the business that buys the coffee. They have new opportunities to progress – for example being able to produce higher quality coffee, process their own beans, or apply for organic certification. Cameron Neil describes one farming family whose daughter has studied and taken on a marketing role in their cooperative. The children of coffee farmers no longer need to go into coffee farming or move to the city. Now they have choices. “Fairtrade’s ambition is for people to have what they need to progress” says Cameron.

Wells is emphatic that this is not charity. “They are proud people. They want to know that what they grow is what they earn a living from. They don’t want a freebie. They abhor that whole system of freebies. They have a sense of pride about what they do.”

“For them [Fairtrade] is the telling point of difference [that means] having their own power to make their own economic decisions. It’s about how to improve their own life. Not their own personal life. They recognize that the improvement comes as community. It’s how to improve infrastructure and facility. There are many examples of how that happens.”

Jasper Coffee sells an instant coffee grown in Colombia. There, the coffee farmers on mountaintops had to take their beans (a years’ worth of effort and their only means of supporting themselves) 40km down the mountain on the back of mules to sell it to buyers at the bottom of the mountain. “In Colombia, you get mugged,” says Wells. “If you have to take your mules and coffee to the bottom of the mountain and get paid, guaranteed, you won’t have your money by the time you get back to the top. You’ll be lucky to be alive.”

So the first act of the new local Fairtrade cooperative was to build a warehouse and a bank at the top of the mountain. Now farmers take their coffee to the local warehouse. They take in cash only what they need for the week – the rest stays safe in the bank. The coop bought vehicles to transport the coffee down the mountain, and built bridges, again to make transport easier. They bought more land next to the warehouse and built a drying plant (which increases the quality of the coffee because it dries evenly – leading to a higher price and better income).

Ultimately, Fairtrade is about an end to slavery. As Wells puts it: “Our Western culture, our economy is still under this umbrella of slavery. We still want those people to be poverty stricken so that we can have this cheap product.”

As I leave the premises of Jasper coffee I am buzzing – not only from the coffee fumes I have been delighting in for the last hour, or from the magnificent (and potent) latte I received on arrival, but from the ideas that Wells has planted in my head. The slave trade exists, indeed it thrives as a fundamental part of our economy. By switching to Fairtrade, we can end slavery, and be the agents of phenomenal positive, worldwide change. That tastes pretty good to me.

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