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Last Updated: Wednesday, 3 May 2006, 23:04 GMT 00:04 UK
Coffee farmers have grounds for hope
By Mark Ashurst
In La Trinidad, Mexico

The pulping machine looks like a cross between a clothes mangle and a miniature cider press.

Coffee plants in La Trinidad co-operative
The harsh Sierra Madre terrain makes coffee farming hard

At the top, a broad funnel channels raw coffee cherries between two rolling pins.

A hose connected to a water butt higher up the mountain casts a stream across the corrugated surfaces which separate husk from bean.

With a loud cranking sound, Salomon Garcia Moreno turns the handle.

Wet coffee beans spew out onto a large wooden tray.

Mr Garcia Moreno is president of La Trinidad, a co-operative of coffee farmers in the Sierra Madre mountains of southern Mexico.

The terrain is harsh, a landscape of dense forest and steep valleys which defies any attempt at industrial farming.

But for La Trinidad's 352 members, the combination of high altitude and fertile soil are a livelihood.

Better life

The coffee grown here is the primary income for six local communes.

In the nearest hillside town of Los Naranjos, local families saved for 20 years to build their church.

Staff from Green Mountain Coffee Roasters, a US company based in Vermont, visiting La Trinidad co-operative of coffee farmers
La Trinidad has attracted international attention

But since 2000, when the co-operative secured Fairtrade certification for its crop of Typica coffee beans, the standard of living has substantially improved.

Higher revenues from coffee have helped La Trinidad improve its farming techniques, and diversify into new businesses.

"We now have a small honey production project and we grow fruit and vegetables for sale," says Mr Garcia Moreno.

"Other farmers are growing sugar cane."

Improved farming techniques mean local children spend less time in the fields.

An estimated 80% of school-age children are currently enrolled in community schools.

Fashion in fashion

In the history of modern consumer brands, Fairtrade commands a unique position.

Devised in 1989 by a small Dutch trading organisation to help Mexican coffee farmers weather a downturn in prices, its promise of a better deal for farmers in the developing world has spawned a global brand with annual sales worth $1bn (550m) a year.

Children of coffee farmers at La Trinidad co-operative
Fairtrade is good for La Trinidad's children

Multinational companies from Nestle to McDonalds have launched their own ranges of Fairtrade products.

The distinctive Fairtrade logo - a waving figure silhouetted against a disc of blue sky and green earth - features prominently on a diverse array of agricultural commodities, from gourmet ice cream to leather footballs.

In the UK alone, sales of Fairtrade food are on course to grow by 50% in 2006, helped by their prominence on supermarket shelves from Asda to Waitrose.

Top Shop, the high street retailer, this year launched Britain's first mass market range of shirts and skirts made from Fairtrade-certified cotton. A new fashion in fashion.

Audited claims

So what exactly does Fairtrade achieve?

Ian Brettman, deputy director of Fairtrade UK, calls it "a corrective measure" after two centuries of "unfair trade" between industrial nations and developing countries.

In practice, Fairtrade is only really applicable to agricultural commodities.

Its key mechanism - among many in the Fairtrade system - is a guaranteed minimum price for co-operatives of small farmers in the developing world.

A Fairtrade chocolate cake, for instance, is likely to include a filling made from chocolate made from cocoa beans purchased at a higher price than the prevailing market rate.

Fairtrade logo
The distinctive Fairtrade logo is prominent in UK shops

"We audit that claim, we certify that claim, we have data to prove it. That's your guarantee when you see the Fairtrade label," says Paul Rice, founder and chief executive of Transfair USA, the not-for-profit company that brought the Fairtrade concept to America, its fastest-growing market.

In practice, the premium varies from one deal to another, but is never less than a guaranteed minimum.

It applies even if market prices are high, prompting sceptics to claim that Fairtrade is really a form of subsidy.

Mr Rice rejects the suggestion. "It's like a farmers' market gone global," he says.

The guaranteed price for farmers is an attribute valued by consumers.

"Fairtrade is not trying to turn back the clock on globalisation, we're trying to find a way to make free trade for the poor," he says.

Corporate social responsibility

Despite its high profile, Fairtrade products make up a tiny proportion of world trade.

Even Fairtrade coffee, its best-selling product, accounts for less than a half per cent of global coffee sales.

But despite its small size, Fairtrade commands a virtual monopoly of ethical shopping in the minds of Western consumers.

This reflects a certain modesty of its ambition.

Starbucks Frappuccino
Starbucks is now the biggest buyer of Fairtrade coffee

Fairtrade does not pretend to offer an alternative to global capitalism. On the contrary, multinational companies are crucial to its success.

Starbucks, the multinational chain of coffee houses, has become the biggest purchaser of Fairtrade coffee.

"We want to pay premium prices because we buy high quality speciality coffee," says Sandra Taylor, Starbucks' vice-president for corporate social responsibility.

"We want to make sure those suppliers stay in business. So it's in our interest to maintain a good partnership with Fairtrade farmers."

Willing consumers

The strategy of promoting Fairtrade in mainstream commercial channels has angered more radical elements in the broad church of organisations promoting Fairtrade.

"Small producers are constantly looking for ways to distinguish themselves - their situation in world trade is different," says Jeronimo Prujin, director of Commercio Justo Mexico.

He does not rule out the possibility of an eventual split in the Fairtrade movement, as small producers campaign for a larger share of the profits currently enjoyed by wholesalers, distributors and retailers.

While the benefits of Fairtrade for small farmers are beyond dispute, western shoppers often pay far more for their products than the modest additional premium passed on to producers in the developing world.

The relatively high retail price of Fairtrade products is likely to change as the market matures and competition drives down prices.

But finding cheaper prices is not a priority in this fast-expanding market.

In today's consumer society, the sensation of virtue is one we're willing to buy.

How fair is Fairtrade?
09 Mar 06 |  Business

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