Fresh Cup May 2003

The Green Café: The Debate Over Fair-Trade Expansion
By Mark Inman

Not only was the 2003 Specialty Coffee Association of America (SCAA) conference in Boston one of the most well-attended events in the history of the SCAA, it offered more surprises and controversy than ever before. Among the most contentious seminars was a presentation on expanding the fair-trade model beyond small cooperatives. In a large room packed to capacity, Paul Rice, CEO of TransFair USA in Oakland, Calif.; Bob Fulmer, president of Royal Coffee in Emeryville, Calif.; Shauna Alexander, a Portland, Ore.-based business consultant; and David Griswold, president of Sustainable Harvest in Portland, Ore., discussed the idea of opening the fair-trade program to include medium- to large-sized coffee farms and estates. The debate that ensued was far more divisive and heated than I could have imagined.

The presentation felt like a heavyweight title bout. Ground rules were clearly set at the start, from Griswold asking the audience to allow each speaker to convey his or her opinion without disruption, to the announcement that there would be plenty of time for questions and comments. Throughout the presentation, the panelists stressed that the issue was merely being explored, not actively pursued. Still, many in the audience seemed to have arrived with their minds already made up, paying little attention to the panel discussion and simply waiting for the question-and-answer period to make their positions known.

For all the pressure Rice must have felt leading up to this moment, he managed to present a very balanced and convincing argument for the need and importance of cleaning up the way many estates currently operate. For example, even though smallholders grow more than 70 percent of the world’s coffee, the remaining 30 percent of larger farms holds the record for exploitative conditions, human rights violations and lack of environmental accountability. As Fulmer put it, “Slavery would be a vast improvement in these systems.” But Rice added that something needs to be done to recognize larger cooperative growers and estates that have followed through on their commitments to improve the ways they do business. The fair-trade movement is not about numbers or ego, small growers or large, he said. It’s about improving the lives of disadvantaged coffee workers across the board. And his argument for helping estate workers is compelling. “Unlike small growers who have land and animals and can grow staple food crops in addition to their coffee, the rural, landless workers who live and work on large plantations have nothing,” he said. “They are paid for their labor only, they have little to no chance for job security or advancement and they have nothing to fall back on.”

Rice strongly believes that expanding the model fits the mission and goals of the fair-trade movement, and he thinks it will strengthen existing relationships between roasters and growers. But he cautions that it needs to be a multi-stakeholder process. “If all parties do not see that it will work,” he says, “it will not make sense to develop this idea further.”

Alexander served on the panel as an independent consultant who had been researching the expansion proposal for TransFair USA. She said that an overwhelming majority of companies she surveyed were “excited, intrigued and challenged” by the idea of opening the fair-trade model. The only negative comments she noted were that the idea seemed “risky” to some of the people she interviewed. This came as a surprise to the fair-trade roasters in the audience who vehemently oppose the idea but were never surveyed, such as Equal Exchange, Thanksgiving Coffee, Taylor Maid Farms, Cooperative Coffees, Deans Beans, Peace Coffee, Santa Cruz Coffee Company, Adam’s Organics, and Counter Culture Coffee—companies that have made fair-trade, organic and shade-grown coffee their business and/or personal mission. Still, like the rest of the panel, Alexander was quick to reiterate that expansion was simply a possibility, not a definitive answer.

Fulmer carefully navigated around the issue, explaining how fair-trade expansion could damage the small-farm movement, which recently seems to gaining ground in many coffee-producing countries, but also recognizing that some roasters see a benefit in covering cooperatives that contain larger farms or estates. He also said that if the specialty industry really wants to see itself as a community of social do-gooders, it must help clean up the current estate system. While he did not come out for or against fair-trade expansion, he did point out the usefulness of opening a dialogue.

Even though the panel lacked an anti-fair-trade expansion representative, the question-and-answer period allowed a number of well-versed industry members to fill the void. Todd Caspersen and Rodney North from Equal Exchange drew long applause after saying that TransFair USA needs to work on promoting and increasing demand for fair-trade coffee, not building supply. They also feared that the proposed expansion would change the entire fair-trade model from a ground-up movement—where small growers work with small roasters in a partnership—to a top-down one, where larger corporations use their size and buying power to manipulate the program.

Paul Katzeff of Thanksgiving Coffee also sounded off. “When the market was over three dollars a pound, the estates did nothing to improve the way they did business. Working conditions were deplorable, and the environment was being degraded at an alarming rate,” he said. “By allowing estates to use the fair-trade mark, thus increasing their revenue, what assurances would be in place that real change will happen?” Katzeff also said that the true threat to the small farm movement are groups like Utz Kapeh and Rainforest Alliance, which allow large companies to use a “watered down, meaningless” mark at little to no cost and without making any real commitments to farmers or the environment. “All groups who have done years of work building their movements should not allow these newcomers to walk in and take from the pie,” he concluded to a cheering crowd.

Nicholas Hoskyns, an exporter devoted to smallholder co-ops in Nicaragua, made the following statement: “In Central America, small farmers are in complete agreement that this is the wrong thing to do. Small farmers and cooperatives built this model and are just now seeing the fruits of their labor. Many still have loads of coffee to sell and fear that expanding this model will make it much more difficult to sell their goods. The estate owners are more polished, they have better access to buyers and to the market, and they usually speak multiple languages, making it easier to conduct international business. They already possess a multitude of tools to fetch good prices and do not need the [fair-trade] mark to survive.” He also questioned why the Fair Trade Labeling Organization was not represented on the panel.

Finally, Oswaldo Acevedo, owner of the Café Mesa de los Santos estate in Colombia, expressed his desire for access to the fair-trade seal. “We would like to be recognized for all that we have done to improve our segment of the industry,” he said. “We want customers to realize that we, too, want to do the right thing and build a better world—but not at the expense of the small grower or cooperative movement.”

Even today, the debate rages on. In fact, I have far too many “official statements” to fit into this column, and I’m amazed by the attention this issue has drawn. Recently, Rice reflected on the outcome of the Boston presentation. “We started a powerful dialogue,” he said. “I am still committed to helping farmers both small and large. For me, it’s my mission and it’s personal. But for now, we’ll need to put the idea to rest until another day.”

Mark Inman is co-founder of Taylor Maid Farms, a certified-organic herb farm and coffee roastery in Sebastopol, California. He is also the founder of ORCA, the Organic Coffee Association of America, and a board member of the SCAA.