Of the many labels that might show up on a bag of coffee, Fair Trade is one of the most common, but one of the most often misunderstood. Unlike Direct Trade, a phrase coffee companies use to denote coffees bought through direct relationships with producers, Fair Trade is an actual third party certification. So, let's start with a Fair Trade coffee definition to figure out what it means for coffee.
What is Fair Trade coffee?
Fair Trade certification organizations work with committees of workers and producers at the very beginning of the supply chains. They certify many facets of the equitable treatment of people on the farms, while also looking at sustainability issues like water rights, waste disposal, and use of pesticides that are safe for workers (though this is not to be confused with organic certification, in which use of synthetic pesticides is strictly controlled or outright prohibited). For a much more thorough example, check out this summary of agricultural certification standards from Fair Trade USA.
Producers and cooperatives that achieve this certification earn a premium, which is then reinvested by those committees into their communities and farms. This premium fluctuates over time (and certainly from commodity to commodity), but it’s always more than the commodity market price for that food (think of commodity market price like the price of a stock, except instead of Apple you’re buying stock in apples — or coffee).
If you’ve noticed me using the world “they” a lot, it’s because Fair Trade isn’t a certification governed by just one company, but rather many organizations with slightly different standards, specializations, and geographic reaches. Fair Trade International, Fair Trade USA, and the World Fair Trade Organization are three examples of organizations with similar missions and similar-looking certifications that operate separately from each other.
So, why isn’t every coffee Fair Trade coffee? For one, as with any certification, Fair Trade costs money, and not every small producer or producer group has the capital to participate in the certification process. And many producers, especially of specialty-quality goods, such as coffee, do find increased premiums based on quality whether in direct trade relationships with roasters or more commonly long-term relationships with exporters and importers.
Still, Fair Trade certification has undoubtedly had a positive impact on coffee and many other industries, promoting awareness of the importance of fair pricing and working conditions on the farm. And while it’s not the only way for farmers to improve their livelihoods, a Fair Trade sticker on a bag is always a good thing to see.