Case Study 1 - Coffee
Click here to sign a quick petition to encourage companies like Starbucks to sell more fair trade products.
Coffee drinking is very popular these days in countries like the United States and Canada. In fact, coffee is the second largest US import after oil. The coffee bar business is also thriving. Coffee bars have sprung up just about everywhere; they are a common place for business meetings, study sessions and blind dates. Former Starbucks CEO Howard Shultz explains that people come for more than just a cup of coffee: "It's the romance of the coffee experience, the feeling of warmth and community that people get in Starbucks stores."
International Coffee Prices
The picture may be rosy inside the coffee bars, but for most of the world's ten million coffee growers, these are bleak times. In 1999, coffee traded at $1 US per pound, but in 2001 it traded at less than 50 cents a pound. The reason for this is simple: more coffee beans are produced than are consumed, so prices go down. You may wonder why the grower countries don't slow down production-that way they would get a better price for their beans. Unfortunately, most of the grower countries have large foreign debts, and shipping out cash crops like coffee is one of the only ways that they can generate the hard currency needed to make their debt payments.
Coffee Farmers
Meet Tatu, a coffee farmer from Tanzania who lives in a mud hut with her four children on a one-acre plot of land. Last year, Tatu made less than $15 from coffee sales. With such a small income, Tatu can no longer afford to send all of her children to school. Tatu's youngest two children will stay home this year and work on the farm. To feed her family, Tatu will work as a labourer on a nearby coffee plantation for $1 a day. She will raise the $20 dollars needed to cover the yearly school expenses of her two oldest children using the money from last year's coffee sales, and by selling the family's pig and all the fruit from her banana tree. She would have liked to feed these things to her family. There is no money to pay health bills if anyone in the family gets sick.
Coffee Companies
Coffee drinkers and growers aren't the only players involved in the coffee trade-there are also the coffee companies. Here's what Nestle told its shareholders in 2001:
"Trading profits increased, and margins improved thanks to
favourable commodity prices."
So while the low coffee trading rate caused increased poverty among growers, the actual selling price of coffee did not go down, which led to increased profits for companies like Nestle and Starbucks.
Click here to read more about company profits
Fair Trade
With regulations in place to assure that growers get a fair price, Fair Trade coffee is becoming a popular alternative to regular coffee. Instead of selling to a middleman, growers form co-operatives and sell their products directly to buyers. In order to qualify for the fair trade label, farms must meet certain criteria, such as no child labour, decent working conditions, and environmental sustainability.
What can you do to support coffee growers? Buy fair trade coffee.
Action and Info
Click here to find out more about the coffee trade and things you can do to improve it.
Global Hero
Click here to read about a Canadian high school student who went to Guatemala to work with a fair trade coffee cooperative.
|
