Global Policy Forum

By Tim Rogers

Fueled by a popular taste for lattes and cappuccinos and a growing consumer-awareness campaign, the fair-trade coffee movement has tens of thousands of Americans asking for a scoop of social justice with their morning coffee.

Fair-trade coffee - beans purchased from small farmers outside the US at well above the slumping market price - is hot in the java world: The amount of fair-trade coffee sold in the US nearly doubled last year. But as the movement has expanded in recent years to include such brands as Starbucks, Green Mountain, Procter & Gamble, and Dunkin' Donuts, dissension is percolating among some smaller roasters. They claim that the large firms, which buy only a small percentage of fair-trade beans, are turning it into a marketing ploy rather than an effort to help farmers.

Now a move is underfoot to create a new model where smaller brewers purchasing 100 percent fair-trade coffee hope to distinguish themselves as the real deal among fair traders. The rift demonstrates how some small companies feel cheated by larger corporations for infringing on their market niche, even when all parties involved insist they are working toward the same goal.

Others say the mainstreaming of the movement has helped the cause.

"If a corporate giant roasts a million pounds of fair-trade coffee in one year, they are still doing far more than some of the smaller 100-percent roasters will in their entire history," stresses Paul Rice, CEO of TransFair USA, the group that audits the US fair-trade industry.

The fair-trade model seeks to ensure livable wages as well as environmental and cultural sustainability for small farmers in Latin America, Africa, and Asia by establishing a base purchase price of $1.26 per pound - about $.75 more than the current market price. Since TransFair formed in 1998, fair-trade coffee sales in the US have grown exponentially, totaling 19 million pounds last year, according to Mr. Rice.

Several smaller 100-percent fair-trade coffee roasters in the US have broken from the establishment in recent months, claiming they can do more to raise consumer awareness by going it alone.

On Friday, Larry's Beans of North Carolina split from TransFair, the company that holds the US trademark for the term, "Fair Trade Certified." At least three other smaller roasters - Just Coffee, Dean's Beans, and Cafe Campesino - have followed suit. All the details of their new association have yet to be worked out. "Without people outside the increasingly corporate-friendly TransFair system pushing for the original vision of a better model, [the movement] will be watered down into nothingness," says Matt Earley, cofounder of Just Coffee in Madison, Wis.

Under the current system, chains like Starbucks can call themselves fair-trade friendly by purchasing just 1 to 2 percent of their coffee from certified growers. Starbucks, which brews fair-trade coffee once a month as its "coffee of the day" in the company's 7,834 worldwide shops, and has bags of it for sale on its shelves, acknowledges that fair-trade beans are only a small percentage of its total purchase, but explains that there are other ways to ensure farmers are treated justly.

Sue Mecklenburg, vice president of business practices for Starbucks, says the company purchases all its beans - fair-trade certified or not - at an average price of $1.20 per pound. She says that last year the company bought 2.1 million pounds of fair-trade certified coffee, double the amount from the previous year, and sold 28 million cups of fair-trade coffee as its cup of the day in 2003.

"Starbucks doesn't purchase 100 percent of its coffee as fair-trade certified, but 100 percent of the coffee we buy is under conditions that are fair to farmers," she says, noting that fair-trade certified coffee is still a relatively small market, representing 670,000 smallholder family farmers, out of an estimated 25 million coffee farmers around the world.

Another sticking point inside the movement are the requirements for being certified. Germany's Fair Labeling Organization (FLO), which certifies all fair-trade coffee in the world, charges farmers $2,431 to certify plus an annual base of $607 for recertification and $.02 per 2.2 pounds of coffee sold under the fair-trade label.

Stuck in the middle of the controversy is the rural Nicaraguan coffee cooperative of El Porvenir, located on a 2,000-acre swath of land in the volcanic highlands. This village of 255 people produces a modest 45,000 pounds of organic coffee beans in a good year and has been trying for three years to get certified as fair trade by FLO.

Mike Woodard of the Nicaraguan ecumenical organization Jubilee House Community, says he helped the village fill out a certification questionnaire in 2001, but never received a response. FLO did not answer questions about why they have not visited the community, but spokesman Simen Sandberg says that seldom do they certify producers who harvest less than 44,000 pounds per year - almost the exact amount El Porvenir harvested last year.

Rice downplays criticisms that the movement sold out by inviting the multinational's on board. He says his mission is to get as many roasters and retailers involved as possible. But some are still wary of the bigger brewers. Robert Everts, co-executive director of Massachusetts' Equal Exchange, the largest 100-percent retailer of fair-trade coffee in the US, applauds efforts to bring in larger firms, but says he stands with the defectors. He says that "the verdict is still out" whether the fair-trade establishment can support both the big and small roasters under the same tent.