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...do you ever think about the farmers who grew that coffee, thousands of miles away?
When you pay the bill...
...do you ever wonder: How much of this money will the coffee farmers and their families actually get?
An international network of activists wants you to start thinking about it, because they say they've figured out a simple way that you can affect the global economy and transform the lives of farmers: Look for coffee with the special label marked "Fair Trade."
Coffee Country
But many farmers can't afford a horse. One man's staggering down the dirt path, bending forward at the waist: He's lugging more than 50 pounds of coffee on his own back. But he says that's nothing. "Sometimes [we carry] 100 pounds or more," he says, through my interpreter. "You see that mountain in front of us? When you're picking beans on those slopes, there's no way you could get a horse in there, even if you had one. So you have to carry the coffee for more than an hour. You come here sweating, really sweating."
You don't have to be an economist to see that growing coffee here doesn't buy much of a life. Picture the farmers' homes on the hillsides: They're shacks. The floors are bare dirt. There's no running water or electricity. The outside walls are thin wooden planks—and it gets cold here up in the mountains.
The world's coffee prices go up and down, depending partly on supply and demand and speculation by international investors. But these farmers are stuck in poverty. They sell their beans to local businessmen whom they derisively call "coyotes," and the coyotes pay them less than 50 cents per pound. At that price, the farmers can barely make a few hundred dollars a year. "To produce coffee, it's expensive," one farmer says. "It's a lot of work, and sometimes we can't even cover our costs."
In fact, one local coyote confirms that "most farmers are losing money" at the prices he pays them. But he says he doesn't have any choice. He says there's too much coffee on the world markets these days, and if he pays the farmers more, he won't make enough profit to feed his own family.
Worlds Apart
When I ask the farmers if they have any idea how much stores in the United States charge for high-quality Guatemalan coffee, they shake their heads, they have no idea. When I tell them that a typical coffee shop in Washington, D.C., sells Guatemalan beans for more than $9 per pound—compared to the 50 cents they get for growing it—the farmers just stand there, looking puzzled. Then one of them pulls a calculator out of his hip pocket—it's so dirty and scratched, you can hardly see through the screen. My interpreter, Xenia Barahona, helps him convert dollars into local quetzales.
The farmers gasp and start murmuring when they hear the price.
"They're just amazed at how much a consumer pays for it," the interpreter says," and they keep just saying, '6,600-something-something quetzales!'—they're repeating it over and over again. It's an enormous difference from what they actually get. It's a huge amount of money."
A New Version of Global Trade
On a recent morning, I joined one of the system's organizers, a man named Guillermo Denaux. He's heading to a meeting with some Fair Trade farmers to see how things have been going. And that means that his four-wheel-drive car is straining to climb an insane, rocky path next to a cliff, way up in Guatemala's mountains.
"See that peak?" Denaxu says, as he points to a range that's lush with jungle and partly hidden by clouds. It's an unnerving moment when he takes one hand off the wheel, because if the car swerves only two feet, it will plunge down the side of the mountain. "The farmers' village is in those clouds. It's the end of the world," he laughs.
A group of European activists founded Fair Trade in the late 1980s. The program spread to the United States a few years ago. Here's how it works:
Cutting Out the Coyotes
Still, the Fair Trade network can't raise all the money that farmers need just by cutting out middlemen. Consumers have to help, too. You pay at least 10 percent extra for Fair Trade brands at your neighborhood store.
By the time Denaux pulls into the village of Pueblo Nuevo, behind the clouds, he's three hours late. But dozens of farmers and their wives are still waiting in the meeting hall, at the edge of a dirt clearing next to a tiny pink church—they've been sitting there all morning. As Denaux walks into the spare hall, they form an impromptu receiving line, so everybody can shake his hand.
The villagers are Mayan, and the women are wearing their traditional riot of colors: woolen skirts and blouses and jackets, embroidered with orange flowers and pink trees and purple birds. As the farmers and their wives take their seats on makeshift wooden benches, Denaux walks to the front of the room next to a big wooden crucifix, which is leaning against the wall—and he begins the meeting.
"Buenos tardes," he calls out. Silence. Denaux raises his eyebrows and crinkles his face. "Buenos tardes!" he calls out, louder this time, and the crowd laughs, and murmurs their own greeting.
Earning Double
The farmers tell Denaux they like the Fair Trade system: They're getting twice as much money for their coffee as regular farmers are getting down the road.
But Denaux will tell you privately that the farmers can't control their lives until they understand how their business works. So he asks the crowd a simple question: "Who here can tell me why you're getting more money for your coffee," he says. And nobody answers.
Denaux begins pacing the room, like a talk show host on television. "Who knows the answer? You say you're getting twice as much money for your coffee as the coyotes are paying other farmers. So how is it possible, you getting double?" Guillermo asks. "Who's paying for you? Who's the fool who's paying more?"
Finally, one farmer speaks up. "The truth is," he says in a soft voice, "we don't know who's paying more."
So Denaux goes to a white plastic board on the wall and picks up a black marker, and he draws the Fair Trade system with circles: Farmers here, consumers there, the Fair Trade network in between. "Consumers who buy Fair Trade coffee in countries like the United States are willing to pay you more," Denaux tells the crowd, "because they want you to have better lives." And that means, Denaux tells the farmers, that they have a special responsibility to grow the best quality coffee they can.
Denaux pauses, and gazes slowly around the room. "And that means you have to run your business right. So one little question," Denaux says. "Are you keeping your books? Or do you work without books?" The farmers sit silently, shifting on their benches. "No, I'm serious," Denaux says. "Do you have your accounting books?"
As it turns out, no, they don't keep accounting books. Traditionally, corruption has plagued every level of business in Central America, and the Fair Trade system wants to teach farmers to fight that. The members of this co-op have elected some managers, and they're the ones who actually take in the coffee money and hand it out to the farmers. "Look," Denaux says, "I'm sure your managers are honest, but you have to be able to prove it. Isn't it important to you, to know your expenses, [to know] where has the money gone? Don't you want to know that?" Some of the farmers nod and murmur, "Yes. Yes, we want to know."
"But nobody knows?" Denaux responds. "You have to know." Just last year, the Fair Trade system kicked out a group of farmers because they didn't keep good financial records.
Finally, the farmers tell Denaux that they understand: They'll ask somebody who's been to school to help them start an accounting system. And, with a big round of applause, the meeting's over.
Fulfilling Dreams
And if you visit a farmer named Raymundo Nicolas, you'll find that some farmers are using their Fair Trade money to join the world of consumers.
When we drop by his farm just after sunrise, Nicolas' wife is standing by the kitchen fire. She's been up since 4 a.m., rolling corn meal into dough and slapping out tortillas. As soon as Nicholas and his two sons have eaten a stack, along with some black beans, they head down the hill into their trees.
Each coffee tree is about 12 feet high, and dense with shiny leaves. The branches are covered with clusters of bright red berries. The little coffee beans that you'd recognize are hidden inside that red pulp. Now that he's making more money selling Fair Trade coffee, Nicolas says, as he snaps off berries and tosses them into a bucket, he's buying things that his family never dreamed possible. They just got their first television—a 20-inch color TV. Fortunately, they live close enough to town to get power.
And that's not all: Nicolas bought a special machine that grinds the red pulp off the coffee beans—a tool that's saving him hours of labor. "I also bought my bed, the bed where I am sleeping now," Nicolas laughs, sheepishly. "I was able to buy all these things."
New Era
Eventually, if the system spreads, Fair Trade organizers expect that they could see a backlash from middlemen in the coffee industry, who could potentially lose large numbers of farmer clients to the Fair Trade network. So far, though, the system is too small to dent their profits.
But those concerns are far off in the future. There's at least one immediate obstacle that's preventing more farmers from getting involved. Coffee companies in the United States aren't selling much Fair Trade coffee.
Consumer Protests
"Now I want to hear everybody singing," one protester shouts into the microphone. "We shall not be moved ..." Others wave their placards, with slogans like "No to coffee sweatshops."
Early last year, not long after riots almost shut down the World Trade Organization meeting in Seattle, a group of activists from an organization called Global Exchange went to Starbucks and said, in effect, "Either start selling Fair Trade coffee or we'll boycott all of your stores." A few days before the boycott was supposed to begin, Starbucks executives basically said, "OK, we'll do it." And in fact, Starbucks began carrying Fair Trade coffee in cafes across the country; company officials say they're planning to launch a national campaign soon to promote it.
But leaders of the Organic Consumers Association charge that Starbucks is making only a "token" commitment to Fair Trade. They say Starbucks executives are trying to snow consumers with a public relations gimmick.
"I was at Starbucks this weekend," one protest leader shouts into the microphone, "and the Fair Trade coffee was tucked away in the back, almost out of sight. Did Starbucks ever intend to comply?" The demonstrators beat drums and boo. Now some consumer activists around the country are threatening to resume their calls for a boycott—unless Starbucks sells a lot more Fair Trade coffee.
The chief executive officer of Starbucks, Orin Smith, says the activists' charges are nonsense. We talk in his office, which looks out at Seattle's entire skyline and down on the city's bustling harbor. Smith says he supports the Fair Trade philosophy, partly because it feels like the humane thing to do. He's visited coffee country. He says he's seen that hardly any of the money that Starbucks pays for its beans ever trickles down the industry chain to the farmers.
"The hardest thing to see are the little kids," Smith says. "There's not a lot for them to look forward to. The people in these countries are challenged to feed themselves, to clothe their families, to give them any kind of an education. This is an incredibly marginal existence that these people live. And I think that anyone who sees that kind of a situation has to be really torn."
Smith also says he supports the Fair Trade idea partly for business reasons. He says small family farmers—not big plantations—produce roughly 80 percent of the coffee that Starbucks buys. If the farmers can't make a living and stop growing beans, what'll happen to Starbucks?
So it might sound contradictory when Smith concedes that the protesters do have a point. He says it's true: Starbucks buys a miniscule amount of its coffee from the Fair Trade system—less than 0.1 of 1 percent of all the beans that Starbucks buys. But, he says, don't blame the company for that. Smith says the problem is that Fair Trade activists are trying to sell coffee that's not always very good. He says Starbucks planned to buy—but then rejected—some shipments of Fair Trade coffee last year, because the beans didn't meet Starbucks' quality guidelines.
"And I would challenge [the Fair Trade activists]," he says. "They provide us with the quality of coffee that we're looking for instead of blowing their horns, we'll take it. There is no logical reason why I would turn down Fair Trade coffee. That makes no sense, because I have no motive."
Some Fair Trade organizers concede that Smith has a point: They do have problems with quality. Producing great coffee is something of an art, and they say some Fair Trade farmers are still learning how to wash the beans after harvest and then ferment them and dry them just right, so they develop that "deep flavor." But sources in the coffee industry also speculate that Starbucks makes smaller profits selling Fair Trade coffee than selling its regular brands, and perhaps that's why the company is dragging its feet.
Smith denies it. He says the company makes virtually the same profit, whether it sells beans stamped "Fair Trade" or not.
In a way, all this sounds like the debate you used to hear in the supermarket industry about organic vegetables. The best organic farmers grew great-looking lettuce; the worm-eaten stuff made executives cautious.
Still, the Fair Trade philosophy is slowly joining the mainstream. Almost a hundred companies have begun selling small amounts of Fair Trade coffee in the United States—including some Safeway supermarkets and Sara Lee, the company that sells old-fashioned brands of coffee like Chock Full O' Nuts. Sara Lee has just started offering Fair Trade coffee to institutional clients, such as government agencies, college campuses and hospitals.
Meanwhile, stores in Europe are selling Fair Trade bananas and tea and sugar. Coffee is just the beginning.
Final Stumbling Block
One woman says she's heard of Fair Trade coffee, and she knows in general that it's designed to help poor farmers in developing countries. But when I ask if that's important to her, she shrugs. "One needs to choose," she says slowly, searching for just the right words. "You have only so much time in your life, and so you need to choose your issues. You need to choose the things that you want to be passionate about, the things you want to care about, give your money to, give your attention to.
"And quite honestly," the woman says, Fair Trade coffee "is not one of those issues."
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