The fun
facts that you find out on a Tuesday night…
According
to research conducted by Cleveland Research on coffee pricing, in the 2010-2011
financial year there was 40% inflation on coffee. In 2011-2012 the inflation
dropped back, but still leaving coffee prices high. Furthermore, in
coffeehouses across Europe, US and Australia, sales have risen steeply in the
last year or two as people seek the smaller pleasures in life, and our love for
coffee grows. Evidently the increasing price hasn’t deterred consumers, but
customers who pay more, expect more. Lucky for these customers, the knowledge
within the specialty coffee scene is growing as well, making the coffee you buy
better, or even just through new and improved brewing methods.
With this
increase in prices for the consumers, I can’t help but wonder, what are the
farmers getting for this? We often hear about exploitation of agricultural
farmers in developing nations, especially the coffee rich nations of South
America and Africa. What has highlighted the debate even more is the recent
labelling initiative launched by the World Fair Trade Organization (WFTO) in
2004.
Fair trade
is when the organisation ensures that the farmers get an appropriate and fair
price for their products. The endorsement of fair trade labelling by Cadbury on
their chocolate bars has promoted this initiative even more. For example, the
market price for a pound of coffee on Wall St has come down to a nearly 30 year
low with farmers in Ethiopia receiving on average 10 cents a pound. By using
fair trade coffee you cut out the middle-man/distributers and allow farmers to
get an average of $1.26 per pound – a far fairer price!
Over the
past few years, it’s been estimated that fair trade coffee sales have increased
at 50% per annum. However, there has been some criticism over the money
reaching the third world. Fair trade coffee on average does cost more to
obtain, therefore, retailers often pass on the prices to consumers. Of course,
we as consumers want to believe in our social consciences that we do something
to help the world, and as such we don’t mind paying more for coffee (inflation
statistics indicate that). Unfortunately, some critique is that some retailers
charge more for their coffees to make a greater profit off of fair trade
coffee, and don’t pass the marginal profits onto the farmers. Also, some coffee
shops only use some fair trade coffee in their blends, and sell it at full fair
trade prices, increasing their profit margins and not passing on the benefits
to farmers. Fair trade also doesn’t ensure the quality of the beans; some
farmers can go about growing substandard beans and still receiving the higher
prices than those farmers who grow the quality beans.
Let’s not
be too pessimistic, some farmers are much better off with fair trade. More and
more fair trade coffee is coming onto the market, and consumers are happy to
pay more with inflation for a quality coffee.
