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More Fairtrade

How does Fairtrade work? Download summary PDF version.

1. Cooperative = more bargaining power

Farmers organize themselves into a Cooperative, elect a leadership team and adhere to rules set by Fairtrade Labelling Organisation (FLO) to gain and maintain their Fairtrade certification. A Cooperative is a group of individuals who pull their resources and sell the goods they produce together. As a group they have more bargaining power.

2. Shorter supply chains = greater share of the pie

The Cooperative sell directly to an exporter rather than farmers selling on their own to a middleman. These middleman are often called ‘coyotes’ in Latin America countries, because they take advantage of farmers by offering very low prices when they have to sell their coffee. The Cooperative will also pool their resources together to buy harvesting equipment or like the Yirgacheffe Cooperative, a truck to transport their own coffee. This way they avoid exorbitant prices, leaving more income to spend on food, health and education.

3. A guaranteed higher price = stability to invest & income to break the poverty cycle

Cooperatives sell to exporters at the Fairtrade price plus a premium for organic certified coffee. In addition the Cooperative may negotiate a further premium for the quality of its product. The Fairtrade price will follow the market price higher, but provides a safety net if the market price plummets below the fair-trade price.

Most importantly the guaranteed price provides stability for farmers to invest in their crop and further improve their quality product and therefore income. Imagine if you didn’t know what your salary would be next week – it would make taking a mortgage out to buy a house very difficult!

4. Environment standards = sustainable approach to the environment

Fairtrade standards ban the use of certain chemicals and pesticides and a price premium is paid for organic coffee. Using shade grown techniques and organic agriculture reduces carbon in form of humus composts and promotes bio-diversity of critically important equatorial rainforests. It also generally leads to improved quality and therefore higher prices. With more income farmers will further invest in their crops and protect the natural environment that grows the quality coffee bean. Now that’s worth drinking too!

5. Auditing

As a wholesaler, Jasper Coffee must provide quarterly sales reports to FLO and pay a 2% levy. This levy is used to support the Fairtrade certification system throughout the world and carry out audits and checks. In fact the cooperative, exporter, importer and manufacturer must all be licensed by FLO and submit reports.

Frequently Asked Questions

How much money goes back to the grower?

None !

They have already been paid at the ‘farm gate’ when they sell to the farmers Cooperative. And the Co-op will receive 60% of the contract price upfront to help them bring to harvest this coffee. Faitrade is not a charity model, it is a trade model based on a supply and demand. Research commissioned by the Fairtrade Foundation UK, found growers received an average price 3 to 5 times more.

How do I know it is certified Fairtrade

Don’t believe the brand, ask the Fairtrade Association (www.fta.org.au)

Always look for the blue and green certification logo. Further more ask for the roasters Fairtrade Labelling Organisation (FLO) identity number. They should have one.

Be wary of companies claiming their coffee is ‘fair trade’, using a space between the words. The one word ‘fairtrade’ is owned by FLO, whilst anyone can really use the term ‘fair trade’.

Does Fairtrade lead to greater Quality.

Yes.

With a guaranteed income, farmers have the incentive to invest and work in improving their crops. This enables them to break the poverty cycle.

What community projects have Cooperatives initiated using the Fairtrade premium?
You can read about these in our Fairtrade Producer Profiles attached to each product in our webstore or under the web page Fairtrade Resources.

Can a Cooperative lose their Fairtrade Certification?

Yes.

We know of an African Cooperative who recently lost their certification because they were not meeting auditing and procedural guidelines. Regular field visits are conducted to ensure adherence to the Fairtrade code.

What’s the difference between Fairtrade & Rainforest Alliance?

Fairtrade is about people and trees. R.A is about trees.

R.A does not involve Cooperatives, it does not pay a guaranteed higher price, it does not include a price premium for community development projects, it does not pay a premium for Organic certified coffee. Only 30% of the coffee needs to be certified R.A to carry the R.A mark, whilst Fairtrade demands 100%.

It is important that growers have a price incentive to pursue sustainable agriculture. Thus the reason we have chosen the Fairtrade certification system.

Are there any locally grown Fairtrade products?

No.

The Fairtrade system is designed to create a better deal and protect disadvantaged workers and growers in the developing world. These workers outside Fairtrade have limited access to an active legal framework that protects their rights.

Is a Coffee Blend 100% Fairtrade?

A blend is made of different single origin coffees. Under Fairtrade every origin coffee must be Fairtrade certified to meet the rules of 100% certified coffee. With 12 certified single origin coffees, we have the range to create blends of depth.

How do I know its Certified Organic?

Look for a certification logo. If the product is roasted or packed here in Australia look for an Australian certification as this will cover this in addition to organic agriculture. Our coffees are certified by Australian Certified Organic (bud logo) and this system is administered by the Biological Farmers Association www.bfa.org.au. Our Processor ID number is 10030P.