| What is fair trade coffee and why should it matter | | | | under these unfair loans. |
| to you? | | | | There are, however, some arguments against fair |
| When speaking of fair trade coffee, it is first | | | | trade coffee. In a theoretical sense, some believe |
| important to define the term ‘fair trade.’ Fair | | | | that the institution of a set price and contracts may |
| trade means that there exists a fair and mutually | | | | hurt the overall quality of the product, as farmers will |
| beneficial partnership between a producer of a good | | | | see little incentive to innovate and improve standards |
| and the buyer of a good – in this case, the | | | | of quality. Fair Trade proponents counter with the |
| coffee growers and the companies that sell the | | | | notion that the stability of fair trade brings more |
| coffee (buyers). The fair trade regulation was | | | | money for the farmers to increase the quality of |
| brought about due to the recurrence of instances | | | | their product and inspires a more holistic and even |
| where especially poor farmers had full stocks of | | | | keeled ground for competition. Another argument |
| coffee that they needed to sell in order to sustain | | | | against fair trade coffee is the fact that it ignores |
| their livelihood and make room for new coffee, and | | | | the rules of supply and demand. Whereas demand |
| had no choice but to make the sale at a loss due to | | | | inspired pricing may see less stability in price, it could |
| the low price offered by the buyers. | | | | also result in greater profit spikes for the farmers. |
| Fair Trade not only guarantees the farmers a | | | | The argument against this stance is that demand |
| minimum price of $1.26 per pound regardless of | | | | based pricing is a risk not worth taking. Despite these |
| supply or demand, it also provides them with long | | | | arguments, even those who argue against some of |
| term relationships with buyers, as contracts of 1-10 | | | | the finer points of fair trade can still agree that in |
| years must be signed between farmer and buyer in | | | | most cases the farmers are much better off than |
| all fair trade agreements. These contracts benefit the | | | | they were prior to the fair trade standard. |
| farmers not only by providing them with stability, but | | | | Regardless of the conflicting viewpoints, consumers |
| because the international nature of the business | | | | should feel confident that coffee marked as fair |
| allows them to be eligible for credit through the home | | | | trade was purchased in a way that was beneficial to |
| country of the buyer. The farmers need this access | | | | the farmer and the coffee industry on the whole, |
| to credit because they are often at the mercy of | | | | and that in purchasing it they are doing their part to |
| unscrupulous money lenders during their lean season, | | | | sustain a small coffee farm that may otherwise not |
| and typically have great difficulty getting out from | | | | be able to continue operation. |