Growing Speciality Coffee

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.