Tuesday, May 06, 2008

Fair Trade Coffee Not Fair?

I like business. I like coffee. So it only makes sense to also like the business of coffee. That's why I was interested in a study that looked at how Fair Trade dovetails with mainstream coffee production.

Technology Liberation Front: Fair Trade: Does it Work

from the US-based Transfair, fair trade advocates conceded that fair trade producers provided lower grade coffee for sale through the fair trade system. Fair trade producers sell their best coffee on the free market when it commands a higher speciality price than fair trade. Producers then keep their lower-grade quality through the fair trade system where they receive a guaranteed price. They do this because there is an oversupply of fair trade coffee and an undersupply of buyers for fair trade coffee.

On the bright side, coffee producers get more money for low-grade beans than they would without Fair Trade agreements. Better yet, the premium at retail, where the low-grade Fair Trade beans sell at high-grade prices lets concerned consumers believe that because they're paying more, they're doing something good for the little guy.

Sphere: Related Content

No comments: