Feeling Pretty Good About Your Choice to Purchase ‘Fair Trade’ Coffee? Don’t.

By Erika Johnsen

July 6, 2011


As is so often the case, regulations engender unintended consequences, hypocrisies, and hurdles that more often than not end up harming the little guy.

Don’t get me wrong – I enjoy a morning Starbucks trip as much as the next gal – but it would be a mistake to assume that, because I am buying certified organic, fair trade coffee, I’ve automatically made the more ethical choice in dishing out my dollars. Starbucks is merely picking up on the popular trend of selling some warm fuzzies along with their product, but be wary: as Lawrence Solomon for PERC explains, ‘fair trade’ coffee ain’t necessarily all that fair:

That fair-trade cup of coffee we savour may not only fail to ease the lot of poor farmers, it may actually help to impoverish them, according to a study out recently from Germany’s University of Hohenheim. The study, which followed hundreds of Nicaraguan coffee farmers over a decade, concluded that farmers producing for the fair-trade market “are more often found below the absolute poverty line than conventional producers.

“Over a period of 10 years, our analysis shows that organic and organic-fair trade farmers have become poorer relative to conventional producers.”…

The fair-trade business is filled with contradictions.

For starters, it discriminates against the very poorest of the world’s coffee farmers, most of whom are African, by requiring them to pay high certification fees. These fees — one of the factors that the German study cites as contributing to the farmers’ impoverishment — are especially perverse, given that the majority of Third World farmers are not only too poor to pay the certification fees, they’re also too poor to pay for the fertilizers and the pesticides that would disqualify coffee as certified organic. …

And in this well-intentioned price-fixing game, the fair-trade farmer is the pawn and the joke is on the customer.