Fair and Direct Trade

Counter Culture Coffee transparency report

Counter Culture Coffee has just released its first annual Transparency Report, covering 2009. Simple, straightforward, five pages describing each of CCC’s Direct Trade coffees, including the date of the last farm visit by a CCC employee and how much they paid for each coffee in 2009. This, IMHO, is the future of coffee: roasters providing all the information a consumer could want or need to choose their coffee wisely and with a clear conscience.

Fair Trade environmental standards

It’s hard to blame consumers for being confused by the number of eco-labels on products these days. “Fair Trade” certified coffee is probably the most familiar to many consumers. Fair Trade (generically and as trademarked by various organizations) is primarily concerned with alleviating poverty through greater equity in international trade. Fair Trade is governed in most of the world by the Fairtrade International (FLO).  In the U.S., Fairtrade America is their member organization. The former member, Fair Trade USA, which resigned from the international system in early 2012 and is now a separate entity.

Many people assume, however, that Fairtrade/Fair Trade certification standards also include robust environmental standards. This assumption is promoted by some organizations themselves.

For example, At one time, the Fair Trade USA environmental benefits web page has stated that “over 80% of the Fair Trade certified coffee in the U.S. is also shade-grown.” Currently, the site says “most” is shade-grown. According to the most recent (2006) statistics I could find, only about 40% of the Fair Trade coffee imported into the U.S.  is also certified by Rainforest Alliance and/or Smithsonian Bird-Friendly [1].  More recently, Fairtrade International’s benefits report (found on their Facts and Figures page), notes 51% of Fairtrade certified producers (of ANY product, not just coffee) also hold organic certification, and 10% have Rainforest Alliance certification. Since neither of those certifications guarantees shade themselves, I am not sure if either organization can claim that the majority of their certified coffee is also shade-grown.

In fact, Fair Trade certification has no criteria related to growing coffee under shade, it does not require organic certification, it contains no guidelines for management of native or non-native species, it does not require any inventory of wildlife or prohibit hunting or trafficking in animals. These are all included in the criteria for shade certification by Smithsonian Migratory Bird Center (Bird-Friendly) and/or Rainforest Alliance.

Let’s take a look at the Fairtrade/Fair Trade environmental standards.

Fairtrade International is the association of producer networks and national labeling initiatives, including Fairtrade America, that develops and reviews the Fairtrade standards. There are two sets of standards: overarching generic standards, and standards specific to each type of product. Let’s look at the standards which specifically address preserving and protecting the environment.

Here is a summary of the generic producer standards for small producers (which apply to coffee farmers) that address preserving and protecting the environment:

  • No plant material can be collected from protected areas or propagated illegally.
  • Harvesting of wild products from natural areas must be done sustainably and human impact minimized.
  • Co-ops should have environmental and land use plans and maintain records pertaining to land, water, and chemical use.
  • Co-ops must recognize conservation and buffer areas and not cultivate within them or apply agrochemicals.
  • Virgin forest can’t be cultivated, unless an exception is granted.
  • In areas of low biodiversity or similar degraded areas, co-op members should plant trees or “encourage” regeneration of native flora.
  • Co-ops should promote farm diversity, including reforestation or shade implementation, “as is practical” and “progress should be made over time.”
  • No use of chemicals on a prohibited list.
  • Agrochemicals must be labeled, stored, and used as directed.
  • Use of permitted herbicides must be justified.
  • Producers are expected to seek less toxic alternatives to and try to reduce volumes of agrochemicals to the extent possible.
  • Waste should be reduced, reused, recycled and composted in an appropriate manner.
  • Soil erosion should be managed, soil fertility should be maintained.
  • Water should be managed efficiently and to avoid contamination and depletion of resources.
  • Genetically modified organisms are prohibited.

These are indeed pretty generic. There are few specific criteria and virtually no quantifiable or measurable rules. I expected the product standard for coffee to have more precise restrictions or environmental standards relating to birds and wildlife. Here’s what the 2009 document said:

“There are no additional environmental standards specific to coffee producers.”

Fairtrade International standards can be downloaded from this page.

Fair Trade USA environmental standards are substantially similar and there are no separate documents or guidelines for coffee. Their standards can be downloaded from this page.

There are plenty of worthwhile things about these certifications. The environmental guidelines, however general, are better than none at all and in many cases undoubtedly result in better environmental conditions. I strongly believe that reducing poverty also helps prevent environmental exploitation, and Fair Trade has improved the lives of thousands of farmers. Because Fair Trade coffee is grown by small producers, it is often grown in a sustainable manner.

But just to clarify: Fairtrade/Fair Trade certification alone does not automatically mean or guarantee that rigorous environmental standards were followed, or that the coffee was grown under shade. For that you’ll have to look for an additional seal or seals, or have detailed information about the specific origin to assess growing conditions.

[1] Giovannucci, D., Liu, P. and A. Byers. 2008. Adding value: certified coffee trade in North America. In Pascal Liu (ed.). Value-adding Standards in the North American Food Market – Trade Opportunities in Certified Products for Developing Countries. FAO, Rome. Available online (PDF).

Sweet Maria’s Farm Gate Coffee

Green coffee and home roasting supplier Sweet Maria’s has formalized their direct trade buying program, calling it Farm Gate Coffee. Farm Gate prices are at least 50% (but often 100% or more) over Fair Trade prices. Their latest newsletter gives a more thorough explanation.

Even if you don’t roast your own coffee, head over to the Sweet Maria’s web site. I have learned so much there — not only in the coffee library, but also reading the bean reviews and descriptions and the many travelogues that are sprinked throughout the site. It’s a real education!

Counter Culture Coffee’s Direct Trade program

Counter Culture Coffee recently launched its Direct Trade program. It is a natural progression from their Source project, and is a robust example of similar models employed by other roasters, most notably Intelligentsia. Counter Culture is a pioneer, however, in that their Direct Trade coffees are certified by a third party (Quality Certification Services, paid for by Counter Culture).

Here are the standards:

  • Fair and sustainable prices. Counter Culture works with each farmer to determine their production costs and begins price negotiations accordingly. This is the beauty of a direct relationship: many farmers really don’t know how to determine or track their productions costs, and therefore accept pricing that may not realize a profit for themselves. A direct relationship like this Counter Culture model is a true partnership, with the roaster assisting the farmers in calculating, forecasting, and streamlining their production costs. The result: farmers make a good living, roasters have reliable sources of great coffee.Currently, CCC pays a minimum of $1.60/lb. for green coffee; this is expected to rise in 2009. There are also quality-based financial incentives paid to growers on top of this (see below), designed to encourage ecologically-responsible cultivation methods and sustained quality improvement over time.
  • Personal and direct communication. Counter Culture visits grower partners on a biennial basis, at minimum. CCC has an entire section on their web site devoted to posts on trips to origin.
  • Exceptional quality. Direct Trade coffees have scored at least 85 on a 100-pt. cup quality scale. The highest quality coffees are rewarded with higher prices paid to the grower.
  • 100% Transparency. All relevant financial information is is available to all parties — growers, buyers, seller, intermediaries, customers — always.

I think this is a superior model to that of Fair Trade certification in a number of ways. First, of course, is that FT certification only applies to small farmers organized into cooperatives, it is not available to family-owned farms or plantations or single producers. Farmers themselves also do not necessarily receive all or a large portion of any price premiums; this is decided by the cooperative. Second, FT pricing does not take into account any differences in cost of production or cost of living in different regions. Third, FT certification does not certify or verify relationships or communications between producers and roasters or retailer, they only certify the financial transactions between them. Finally, FT does not certify, reward, or incorporate quality into their standards.

Some of Counter Culture’s coffees are also Fair Trade certified, but not labeled as such. And not all Counter Culture coffees will be Direct Trade certified, as it takes some time to work with farmers to get to that level. But the sourcing and purchasing philosophy behind Direct Trade at Counter Culture applies to all their coffees. Congratulations to Counter Culture for this progressive move, which I hope is the future of all coffee sourcing!