Fair trade may not be the panacea for coffee farmers that its proponents want it to be, according to , PhD, professor at 91短视频, and his former student, Emily J. King.
Based on research they conducted from September 2010 to April 2011, Gingrich and King found that that the fair trade system for marketing coffee 鈥� under which farmers receive a minimum price for their product regardless of the market price 鈥� provides limited benefits to a tiny minority of farmers worldwide, despite the premium that consumers pay for that coffee.
鈥淐onsumers spend between $2 and $10 extra on fair trade for every dollar that reaches participating farmers,鈥� wrote the authors in their abstract of 鈥�,鈥� published in the 2012 issue of The Journal of Cooperatives.
鈥淏y comparison, projects that aim to improve coffee farmers’ production, processing, and marketing skills show the potential to provide benefits at a lower cost and also reach a broader clientele.鈥�
Fair trade best when coffee prices low
Gingrich and King say when coffee prices are low, fair trade does benefit participating farmers, offering each producer as much as $100 per year on the average. But when market prices for coffee are relatively high, the annual benefits from fair trade fall to an average of $35 per participating farmer.
鈥淭hose in the fair trade system are doing fairly well,鈥� Gingrich said in an interview with an 91短视频 reporter.听 鈥淏ut, in order to join a fair trade cooperative, farmers usually have to be land owners, which means that fair trade cooperatives are out of reach for the most economically disadvantaged and marginalized farmers in developing countries.鈥�
Fewer than 2 percent of the world鈥檚 coffee farmers sell any of their coffee under fair trade terms. Despite the small number of fair trade producers, the quantity of fair trade coffee on the market exceeds demand, noted Gingrich and King in their article.
For the foregoing reasons, the authors question whether 鈥�fair trade provides an attractive new paradigm for the global coffee market.鈥�
Proponents of fair trade argue that the true benefits of fair trade 鈥渆xtend beyond higher prices for coffee farmers,鈥� benefits that Gingrich and King acknowledge. 鈥淔air trade farmers receive access to credit and technical information,鈥� they say, as well as social benefits, such as increased women鈥檚 leadership and community development programs provided through the cooperatives.
Development projects may reach more producers
Nevertheless, in their article they tentatively concluded that 鈥渇air trade may not be the most cost-effective method of benefiting coffee producers.鈥� They suggested that general development projects, such as quality improvements focused on productivity, may be able to reach more of the most disadvantaged producers, including those who do not own the land they farm or who are not cooperative members for other reasons.
鈥淧art of writing the article was a call for more research,鈥� said King in an interview. 鈥淎s fair trade continues to grow, you gain more insight into how the movement can reach its full potential.鈥�
King, a 2012 graduate of 91短视频, now works in Illinois at a store affiliated with , a nationwide retailer of fair trade products. In the absence of clarity on better ways to increase financial benefits for coffee producers, King says she remains a staunch supporter of the fair trade system.
As an undergraduate, King was mentored by Gingrich in the independent study project that led to the article published in The Journal of Cooperatives. In addition to doing first-hand research, she got college credit for her work. 鈥淚 had always been interested in fair trade,鈥� she said. 鈥淚n researching it, I brought together my major in peacebuilding and development with my minor in economics.鈥�听
鈥淒oes Fair Trade Fulfill the Claims of its Proponents? Measuring the Global Impact of Fair Trade on Participating Coffee Farmers鈥� is accessible at