What is fair trade coffee? Fair trade is a movement that promotes the alleviation of the global poverty level and sustainability. How? Well, it sets regulations on the price, social, and environmental standards of coffee from developing nations to developed nations.
An example of a fair trade coffee organization in Costa Rica is Coocafé. They are a small organization and therefore need to promote the strength of small farmers, to ensure their sustainability, due to the fact that the market is so large. Only a little over half of their production is going to fair trade, which, over ten years has brought $7 million in income out of $40 million.
An example of a fair trade coffee organization in Costa Rica is Coocafé. They are a small organization and therefore need to promote the strength of small farmers, to ensure their sustainability, due to the fact that the market is so large. Only a little over half of their production is going to fair trade, which, over ten years has brought $7 million in income out of $40 million.
Why is fair trade coffee a good thing? According to the text, Corporate Survival: The Critical Importance of Sustainability Risk Management, there are three objectives that must be met in order to maximize shareholder value; financial performance, environmental performance, and social justice performance. I’m going to explain how fair trade is meeting these requirements.
1. Financial Performance: A key advantage is that companies can use the difference in the fair trade market price and conventional market price to help the business. For example, they can use that to help their producers. Since most of their producers are small farmers, they need to help them financially to ensure sustainability. Without those small farmers, Costa Rica wouldn’t produce enough coffee. Also, this will allow for the companies to withstand times of hardship, such as high production and low sales.
2. Environmental Performance: Another key advantage is that companies can use that same difference in price to help the environment. For example, Coocafé had donated $3.5 million over the past ten years to help with the sustainability of our environment. That money has been used for organic coffee production, reforestation, development of hydro-electric programs and coffee dryers, etc.
3. Social Justice Performance: The first two were straight forward, but what is social justice? Well, according to the text, it refers to concepts of fairness and equity in dealing with workers, local communities, and people in other countries. 5% of Costa Rica’s labor force is employed by a coffee organization, which is a good amount of people. So, how are companies, like Coocafé, helping build this aspect of the triangle? Well, they are not only promoting a good work environment for the employees, but also education. This, not only has a direct effect on their employees, but also the larger effect on the community.
I predict that fair trade coffee will continue to grow only if they keep meeting these expectations and continuing to push their limits.
Information from: http://www.globalexchange.org/campaigns/fairtrade/coffee/cooperatives.html
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