The haves and have nots of Australian dairy

The Milk Maid Marian


I’ve had requests from farmers, investors, the media and even politicians for an explanation of how milk prices work (or don’t). I’m going to start with the factors that affect the price a dairy farmer in Australia’s south-eastern states receives.

  1. Who buys Old Macdonald’s milk?

The opening prices of most of the processors are in:

ACM $5.30
Bega $5.00
Lion (variable option) $5.00
NDP $5.00
Warrnambool Cheese & Butter $4.80
Fonterra $4.73
Longwarry $4.60
Burra Foods $4.40 to $4.60
Murray Goulburn $4.31
ADFC To be advised

It’s a massive spread of prices, with the top almost 25 per cent higher than the bottom. And it doesn’t stop there. The pricing systems are incredibly complex, with the prices no more than weighted averages. I know of a farmer supplying MG, for instance, who will receive just $3.79kg MS for his milk. I’ll explain that later in this post.

But, why, you…

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World Fair Trade Organisation (WFTO) conference Milan 2015: Reflections on Fairtrade 101

IMG_6821It is 8 years since I seriously engaged with the WFTO Global conference. Then, in Blankenburg, Belgium (2007) our pioneer Equal Exchange brand was already struggling to compete in crowded UK market beginning to  commodify with Fairtrade. But it was also the year after I first travelled to Kerala to meet the farmers from FTAK and the year we launched Liberation CIC to trade cashew nuts. How far had we come? How relevant was our movement several decades since we began? Was innovation needed?

The 2015 WFTO conference was organised by AGICES the Italian World shops movement, a network of fair trade shops and partner organisations.

This year of the 13th WFTO Biennial, the main venue, Hotel Klima (with its giant green wall and eco credentials) was located in an old industrial zone undergoing transformation, a mixture of IMG_6811immigrant worker housing, old factories, new roads and next to the site of the Milan Expo… was it a homage to neoliberalism or door to sustainable futures, it’s theme ‘Feeding the Planet, Energy for Life’.

I realised that I was hoping for positive transformation and innovation and a (hopefully) critical personal reflection. Perhaps a return perhaps to Fair Trade 101. With two years behind me in Australia, now living on a few acres exploring tropical food crops, trying my hand at what I had advocated for many years I had an appetite for new insights.


Setting the scene

Keynote Speaker Palagummi Sainath was former rural affairs editor for The Hindu until departing for his journey People’s Archive of Rural India, PARI. We were stung by his eloquence and the need for a reality check, in a world seemingly out of control plunging headlong into crisis.

Neoliberalism… trades in two crops… hunger and thirst, harvest self-regenerating poverty. The multiple crisis of …water, of soil… rurality under threat, livelihoods disappearing.

A Global commodity trade, 4 companies ,Archer Daniels Midland (ADM) etc controlling the supply chain hourglass, of the soils of Africa less polluted, now more valued yet off balance sheet

Water crisis… California, experiencing its worst ever drought, where large scale dairy is exempt from regulation and soft drinks have become virtual water… the privatisation of utility continues… ex Uruguay

MARVEL Silva Ridge Estate 23 villas each with swimming pools and in a forest reserve and built by the farmers (now labourers) whose land these ‘opportunities’ now occupy. On the other side of the world less than 2% of US citizens regard farming as their occupation. 85% of US farmers’ income comes from off farm activity…

We were reminded of the terrible suicide statistic, 300,000 over the last 19 year in India alone and the link to other livelihoods. Statistics hide the interconnectedness of our rural lives. When a farm is lost a carpenter is under threat, paid 1/3 in cash and two thirds in kind, perhaps rice and veg, the potters and weavers who make the utensils and homeware are in the same chain, so bankruptcy follows and of course then migration, the largest in human history. These farmers or farm workers have swelled the ranks of the unemployed or under employed

I tried to capture one story:

‘I visited a farmer who had survived suicide due to the valiant efforts of his neighbours. Owing a debt of Rp100’000, accumulated over 3 years for high farm inputs and unpayable because of failed crops. He had drunk pesticides, the tool of choice in this grim journey but been prevented from finishing his task. His neighbours cut down his bed, removing the legs and carried him 5 kms to the nearest road then flagged a truck to take him to hospital, where I interviewed him.’

‘Instead of being thankful for them saving him from death, he was raging at his neighbours…

How am I going to pay the hospital bill. After only 4 days in hospital I owe another Rp50,000, How am I going to pay this?’

Perhaps I have lost the power of the original storyteller but here lies the connection. A farmer with no choice, a refugee prepared to risk life for a better future perhaps?

Finally he turned to civil society and the role of the State reinforcing inequality and removing safety nets of the most marginalised. We have all heard complaints from the Right of erosion to our freedom of expression… Article 19 of the UN Declaration of Human Rights. He urged not to forget those following it, Articles 23 and 24, the right to organise, collective bargaining, decent work and employment and to earn a living wage. He suggested that Fair Trade should be a Human Right!

Solidarity with Farmers and Artisans from Nepal

IMG_6797Conference listened with great respect and appreciation to Chandra Prasad of Fairtrade Group Nepal, the umbrella for 9 WFTO members there. He spoke of the terrible human, infrastructural and cultural cost but demonstrated the networks capacity developed after 14 years. Members were organised and effective delivering relief to many outlying villages. Without fair trade beginnings within WFTO this group could not have responded so professionally.

Trade for Change

Carol Wills linked our present to WFTO’s organisational journey … the first global Fair Trade network to bring farmer and artisan organisations, the so called producers into a fair trade governance structure on equal footing to other stakeholders, and a critical voice at the table a decade before FI did so.

brandGeoff White Board member and NZ Trade Aid MD described ingredient branding with examples and reference to the commercial world. He asked us to understand the differing conceptual frames between certification approaches and their relationship with a business’s own brand. It helped visualise how the WFTO journey towards a Guarantee System offered a fundamental difference to the FI approach. An ‘augmented’ brand strategy reinforces strategic relationship with FT movement and differentiation based on values and commitment to movement, supports a price premium, compliments host brand marketing strategy, achieves regulatory acceptance and retains member exclusivity. It was music to my ears. How often had we heard Fairtrade doesn’t work for brands or reverts to ‘fairtrade/minimum price’

Safia Minney’s People Tree experience in developing their Guarantee System (GS) had uncovered problems in their value chain, assisted communication of FT principles within the chain and to external opinion leaders within the fashion industry. Through setting the agenda they were becoming a a rural production standard.

All WFTO members are now required to engage with and complete the new GS. Selyna Dulanjali from Selyn Exports in Sri Lanka described her engagement, as a social enterprise completing one of the first 9 pilots as ‘a sustainable system to manage our own adherence to the 9 principles of Fair Trade which we live by’. Not only that she wants to import the CIC (used by Liberation Foods) legal form to Sri Lanka

Perhaps this Guarantee system had not developed as far as I expected. Traceable cotton supplies for artisan producers of Fair Trade products remains a challenge due to the small scale of workshops. I resolved to learn more.

Workshops explored critical themes illustrated by member’s experience.

Craft retailing in specialist shops could be profitable according to the experience of TradeAid in NZ and Asha in India

Rain Morgan lead an exploration on Living Wages… a project that a WFTO working group had contributed to over the last couple of years. Immediate reaction was split by those worried about the cost of implementation but the majority saw the strategic importance of moving from a minimum wage standard. Before us lies an opportunity to position ourselves for the next few decades against the ills of our time and to move fair trade onwards, out of a tick box/balance sheet mentality, an audit paradigm, towards a theory of change, a staged journey of development against the flow, towards living wages.

The workshop put a resolution to the floor of the AGM and now WFTO will continue to integrate this work into its standards.

Deepening gender participation was not just an issue of justice but also critical to livelihood development. We heard from an ongoing WIEGO project in Africa and Latin America. Members demanded greater commitment towards gender empowerment both internally by members and to increase WFTO capacity to engage effectively on gender issues.

Recent years have seen both the destruction of local milk production and a decline in small scale farming across the developed world whilst the most marginalised sectors of society experience destruction of public safeguards and the monetary policy of austerity. Conference heard stories from Domestic Fair Trade across Europe and Latin America where solidarity trade was seen to be a new frontier. A wide range of local products were increasingly being sold in retail alongside those from the Global South. Participants both identified the risks of confusion and direct competition with traditional FT, dilution, and lack of clarity on levels of disadvantage and proposed that further work was needed to define this globally. But also saw the potential for defining a more holistic approach to a just economy and gateway to addressing issues such as climate change and food security which remained under the radar for most of FT. An exception was Ryan Zinn from Dr Bronner Soaps who described their project engagement on adaption to climate change. Across Europe especially, alliances were being forged with the Organic movement, Slow Food and social cooperatives. One commentator from Ecuador noted that our ‘legitimacy comes from inclusion’. This is surely a critical usp.

Unexpectedly a workshop on food certification revealed the depth of the farmers market movement in Brazil and Latin America. It was a joy and hidden gem to hear of chefs connecting with small scale farmers and local authorities supporting organic food markets.


In conclusion I realised that our work is more important than ever. Whilst I have missed a description of the keynote from Father Franz van der Hoff … you can by now find all of it online I hope. It’s message just as critical as 20 years ago. Now our job is both to reveal the invisible, that 70% of productive activity in the informal sector, the collateral damage from our governments neoliberal ideologies and to strengthen and expose successful alternatives through the creative collaboration our new business models engender. We must counter the dismissal of migration, the inhuman irrationality of ‘offshore solutions’ and marginalisation, demonstrating that we have inclusive solutions that can be scaled up to address the deep and necessary policy changes required resolve

Why are foodies turning their backs on Fairtrade: Part 1?

Small-holder walnut in shell

Is there is a growing critique of Fairtrade from the ‘foodie’ end of the market as was highlighted in the Guardian Development recently?

This is not the first time writers have explored this theme. The so-called ‘Direct Trade’ in the coffee industry, as also seen here in Australia, has had airings before, but what of ‘foodies’?

Rather than pose the disillusionment of foodies as a cause of the small fall in UK Fairtrade sales I would explore the opportunity that a growing foodie market represents and how it compliments a Fairtrade business strategy for small-holder farmers.

I suggest foodies have been around since well before Fairtrade grew to its current size. Certainly for the decade since I tried to sell Fairtrade certified products at Speciality Fine Food trade shows. For those that have never been, the sheer diversity and quality at these shows is mind boggling and for a foodie, it’s like being a kid in a toy shop. They are awesome fun but exhausting for the taste buds! Serr Walnuts from ChileWe struggled to find interest in high quality Fairtrade Darjeeling tea or fine Orange Blossom honey. We just couldn’t find UK customers willing to pay a premium for the world’s best walnuts grown by small holders in Chile.

The fact is, most speciality products are not widely distributed, selling through specialist retail or online so few get to supermarkets. Consumer trial and therefore the opportunity of developing scale will, for the most part, be small.

On the other hand, many such brands are the pride and joy of artisan food makers and growers too. The foodie market suits them well. Their food passion is unsurprisingly shared by foodie consumers. Very high quality cannot be mass produced, so it was common to see innovation, combining the feedback from market access, careful product development with the skills of farmers and growers on show at these Fairs each year.

In my experience smallholder farmers (even in developing countries) have always been good at responding to market exposure and they can easily acquire skills to grow amazing quality or taste. All it takes is that market access to begin with. In that sense, this is what the Workshop or Chef Roellinger is doing, providing the information and support for farmers to do better. However, and a critical difference, they neither have the intent nor the resources to develop transformational change at any scale, where the focus is on poverty alleviation, given the number of farmers that grow coffee or any other tropical crop and exist on precarious livelihoods. Product educationThis type of business development work is happening more and more in Fairtrade with the assistance of experts.

I believe if Fairtrade, had targeted it’s business strategy at this small specialist sector of the market 25 years ago it would have failed! We needed scale, both for impact but also to achieve competitive business costs and viable products. But several decades later, in a global billion dollar market, the time is now right for differentiation and we see ‘Direct Trade’ of high quality products and examples of foodie success in Fairtrade too. For instance Fairtrade company Zaytoun sells a wonderful freekah from small farms in Palestine. No doubt there are others, but even here, the cost of certification is prohibitive and for the farmer not the entire solution to better livelihood

Consumer foodies are naturally interested in the story of any product and its provenance so explored Fairtrade and its authenticity. So, many enthusiasts in the food trade also saw an opportunity to emulate the stories of traceability told by Fairtrade and told their own in similar terms. Even sometimes criticising Fairtrade to differentiate their own approach as a positive attribute, perhaps ideologically (not unusual here in Australia) or perhaps just from a business cost or quality perspective.

So what is happening to the foodie market (as the article rightly questions)? It is definitely growing and perhaps now fast outgrowing the ability of Fairtrade to deliver a range of high quality and interesting raw materials or finished products, especially in such a promiscuous category. By this I mean foodies get bored easily. They graze, moving on to the next tasty morsel for excitement! Whilst this is a fascinating aspect of consumer behaviour it is not a fundamental flaw in the Fairtrade paradigm. Of course a product can be ethical without being Fairtrade too! The key issue now is one of Fairtrade capacity to deliver. The same Annual Report highlighted the growing Fairtrade support from upmarket UK supermarket Waitrose; I hope Fairtrade can keep up with demand.

Both opportunities can complement each other providing a more secure livelihood for the small holder farmer. So let’s celebrate the skills and capacity of small scale farmers wherever they grow and whatever they grow. If you are a business, be ethical about product development and your terms of trade. If you want to use the complimentary certification, remember Fairtrade is fundamentally a tool to give market access to those who are marginalised.  If you are a consumer, enjoy your food but I would still urge you never to buy a Fairtrade product if you didn’t like the taste! That is the best feedback a farmer can get.

In the second part of this blog I’ll explore some of the Guardian article content in more detail.


Beyond Fair Trade premiums: Onam brings celebrations for farming families in Kerala

September brings the onset of Onam, the annual harvest festival, in Kerala, South India.IMG_2507

Small-holder farmers are celebrating this year. 4500 growers of cashew, coconut, coffee and spices amongst many crops, all very small scale (a couple of hectares), are collectively Fair Trade Alliance Kerala (FTAK). The alliance was formed in 2005, to address twin threats of farm debt and poverty both on the increase at that time and characterised in the extreme at times by the tragedy of farmer suicides.  Each year since then it gets stronger, a collaboration between farmers, promoters and consumers, defending the Kerala Development Model and using Fair Trade as a market tool to secure a strong sustainable business.

10666084_1489731467945805_4827038276676895373_nThe Onam celebration marks the annual distribution of price additional to the market. This year INR 11 million or $189,655 from cashew sales in to Fair Trade markets in Europe and USA.  Fairtrade premiums (certified by Fairtrade International) make up an additional INR 5 million.

This is the true inspiration. They are proud not just for the their own individual achievements as farming families managing the yearly risks but for that of the system as a whole and for all the cashew farmers of the region who have also indirectly benefitted from higher seasonal prices due to the associations strength and market share of the their supply chain. The security of a Fairtrade consumer market has added value to their crop and empowered many families.

Whilst you can read more about their Fairtrade story on the pages of the UK Fairtrade IMG_0296Foundation or on brands that sell their product such as Liberation CIC,  the wider farmer story is the one that goes on 365 days a year on their small homestead farms.

The glut of cashews collected at peak season gave power to processors who traded down prices well below cost of production as farmers became price takers. They had little choice and for some the stress was too much. Now with guaranteed contracts and pre-season finance flowing before harvest, FTAK and their supply chain partners can negotiate above market prices for the entire crop. Committed consumers are very happy to pay a small premium at retail to secure the deals.

Individual farmers in turn, trust the integrity of their Association and such is market share, local farm gate prices were estimated to be 30% higher at peak season. Now there are 40,000 small holder families farming cashews in the northern districts of Kerala producing between them around 30 million Kilograms of raw cashew nuts. The additional benefit the cashew farmers at large received because of the presence of FTAK intervening strategically in the market is about USD 0.30 per kg. This is an addition of nearly INR 450 million or USD 7.7 million in to the local economy this cashew season … just how much indirect benefit  is Fair Trade bringing!

Surely changing the paradigm like this is the true value and strength of Fair Trade when organisations leverage power beyond the personal bargaining of individuals to compete with businesses and bringing benefits to the many.IMG_2549

Empowerment has developed fast, their Fairtrade+3 policy is beginning to address the wider regional issues of biodiversity, gender equality and food security.  Also, having learnt that most value is accrued by businesses ahead of them in the chain, the farmers and their supporters now have confidence to launch their own brand into the BxT1NCyCMAAE_55Indian market, spearheaded by high quality organic coconut oil. What a fantastic example to farmers everywhere!


Dilmah’s Ethical Tea Society


I have just spent a fascinating morning researching Dilmah teas… after years in Fairtrade, setting up the Equal Exchange and cafedirect brand and tea supply chains, visiting Indian and Sri Lankan tea farms, I wondered what was behind Dilmah’s brand position ‘ethically produced tea packed at origin’.

I bought some tea, read the packaging and websites and researched a little background into the development of the Sri Lankan tea industry over the last few decades.

The Dilmah brand is now widely available in retail and food service, is good tea, but has no third party ethical certification or benchmark.

I am convinced that it is a private family firm with strong ethics and passionate philanthropic generosity. That said it is not Fairtrade or Fair Trade! On the one hand it is an entirely worthy private enterprise. On the other, as a good ethical example, it is not a model that is easily replicated to achieve transformative change for tea farmers generally, whatever the passion or belief of the owners or the impact to workers associated with that business.

A few facts first, then an exploration of the public statements from the Dilmah website.

What is Fairtrade?
•  What is Fairtrade in tea? The website is informative on general principles and standards.
• An interesting comparison of certifiers approach to tea from 2010 helps focus on the commodity.

An important difference , when considering the use of premiums, is the democratic decision making of workers from plantations This road to empowerment, this voice for the tea worker and opportunity for them to learn and become empowered in the business of tea does not exist in the Dilmah chain.

Who is Dilmah?
• A family owned tea company that is the 10th biggest global brand. Strictly it is part of the MJF Group
• Founded by Merrill Fernando in Sri Lanka during the 1970’s to challenge the commoditized tea industry, it took off as a brand in the 1980’s, with breakthrough selling tea to Coles in Australia. (I wonder who the buyer was!)
• Merrill has established the most integrated family tea business in the world ‘with ownership or investment in plantations, printing and packaging, tea broking, import & distribution of equipment & materials for the industry’
• The MJF Group also has interests in coconut, rubber and spices, real estate and the Sri Lankan leisure industry. It also imports tea processing machinery
• Dilmah is a large estate owner in Sri Lanka. As such it is the largest producer (one family) owned brand too, but only in the sense that the Fernando family owns the gardens. Brands such as Divine Chocolate, Cafedirect and Liberation CIC are all owned by small scale farmers who actually farm and own collectively.

The Dilmah website offers a thoughtful interaction with Fairtrade…


Why not join Fairtrade?


  • Value is in the brand and packaging with all the product blend knowledge that goes with it. Correct
  • Dilmah equates vertical integration of its business model to control the chain from grower to market as ‘Fair’. I would advocate this model as common sense as it develops many skills at origin. Opinion
  • Removal of middlemen: Fairtrade does not claim to cut out middlemen in the tea chain, especially if the tea comes from plantations or estates. Standards are focused on the workers or small holders. This strategy achieves market penetration faster as this is where the traded volumes are. Communication
  • Removal of middle men: This is true in a vertically integrated chain by definition. Other brands are also vertically integrated e.g. Tata’s Tetley Tea but do not claim fairness. The majority of teas still follow the conventional brokerage model. Due to the economy of scale and power of the large entities they offer most advantage as it is difficult to enter those markets. Dilmah has been successful developing a brand selling good quality Sri Lankan tea. This does not work as well in the UK, where the consumer preference is for a stronger East African dominated blend. Communication spin
  • Price paid to workers under Fairtrade certification is governed by national labour standards. Tea workers in India are paid according to regular negotiations between trade unions and government too, predicated under the 1948 Plantation Labour Act. Equivalent to Dilmah
  • Tea prices under Fairtrade standards are subject to a minimum price and a premium defined by origin and grade of tea. Fact
  • Sri-Lankan teabag grades of orthodox teas suitable for teabags (fannings or dust) have a minimum price of $2.40/kg FOB. (East African teas $1.60/kg FOB)
  • Fairtrade pays premiums to worker premium committees and Dilmah pays to MJF Charitable Foundation. Teabag grades of orthodox teas suitable for teabags (fannings or dust) attract a Fairtrade premium of 50 cents per kg. The MJF is governed by members and staff of the Merrill Fernando family and several non-execs drawn from accounting and business backgrounds in Sri Lanka.
  • The Fairtrade premium paid to Sri-Lankan premium committees is worth about 20% more than the price of made tea. Dilmah makes donations of > 10% on packed tea products. Whilst we are not party to the actual packed cost per kg it is safe to say it is probably more than 50 cents…. Does anyone know the estimated cost?
  • Through his Mankada based MJF Charitable Foundation, an NGO and recognized Charity, Merrill Fernando distributes much of his wealth to his staff & workers and to underprivileged persons in Sri Lanka. The Foundation’s key objectives include the improvement of medical and educational facilities for over 30,000 workers and their families on MJF Group plantations, and the approximately 1,500 staff and workers in its trading and production activities. A good model for private business. Nothing wrong with philanthropy.


Views on Fairtrade and sourcing
The first Fairtrade certified teas came from Darjeeling and the Nilgiri Hills in India in 1994 (20 years ago)  Fact

• The tea industry supplying UK has moved towards sourcing from both estates and very large farmer associations in Kenya, Tanzania and Uganda over the last 30-40 years. This production is called CTC tea (Cut, Tear and Curl) made in larger factories and also common in India. Sri Lankan tea comes mainly from estates and is sold predominantly to Mid-East and Russia/Central Asian markets with higher quality Orthodox processed still strong in the US and Australian markets. The cost of tea is strongly influenced by wage costs which are relatively higher in SL than India and EA. It was a new business strategy for South Asian firms to enter the tea market as brands as and manufacturers given that margins were so low in the brokering of tea. This strategy is now common in Sri Lanka with over 30% sold this way.

  • It is impossible to find out how much of Dilmah’s tea comes from their own plantations and how much (if any) is sourced from the national market.   Query

Much of the UK supermarket tea is also sourced from tea estates in India owned by the Bombay Burmah company. It has proven very difficult for smaller companies to break in due to the economies of scale. This demonstrates the competitive difficulty Dilmah faced.  Fact

• Many Sri-Lankans are still small-scale farmers. Some grow tea. Most of these are outside the export economy.
The tea sectors in India and Sri Lanka have moved away from estates (where tea is grow and processed) to small farmers (processed in independent factories without the mandatory social requirements).
The area of tea grown by large and small farms is approximately equal after a huge change away from estates over the last 30 years. This development makes tea cheaper to produce but relies on large numbers of small scale family farms outside the wage economy
Merrill will have faced this trend of declining profitability in his estate business when choosing a business strategy after buying estates in 1971.  Facts

• An Oxfam-Novib study on tea wages in India estimates the ‘in-kind’ services and benefits worth an additional 75% value over the national minimum wage. The inclusions of this are broadly similar to those in Sri Lanka.  Facts

Other critiques
New Zealand fair trade company Trade Aid criticised Dilmah publically ( I could find no record of the article in the NZ Herald) in 2008, eliciting the following response from Dilhan Fernando one of the founders sons and now CEO, on their own blog site

All of this rather confirms my view that Dilmah has achieved significant commercial success as a branded product picked and packed in Sri Lanka. It’s ethical position is certainly very strong for a private company buying from plantations. Because part/all of the tea comes from within the group and there is no third party scrutiny, it is difficult to say absolutely that all is well. However if you want good quality ethical Sri Lankan tea, Dilmah is probably a good bet. I did enjoy the tea! If you want to support small holders, if you want independent scrutiny and want to critique the wider world of trade, choose a Fairtrade certified brand but also knowing that it’s value added is very likely to remain outside Sri Lanka or the producing country.

Having said that both organic and Fairtrade certified teas in my store cupboard are packed in Sri Lanka! Natures Cuppa Ceylon comes from ‘our plantations’… that’s interesting and Oxfam Premium Earl Grey from SOFA small farmers.

Finally, I was left thinking about the similarities and differences between the Fernandos and the Mohan family who set up Tea Promoters India to renovate Darjeeling estates which had been model gardens for the first Fairtrade tea standards, yet who had remained small scale plantation owners and tea makers and promoters of small farmer development too. Perhaps that’s another story.

Coffee Rust: La Roya threatens coffee farmers in Latin America


The Coffee Rust fungus is devastating coffee production across Latin America. In many areas such as Peru, production is down by 75%. Climate change is a major contributor has been widely reported (Video).

As most coffee is grown on tiny family acreages this crisis is increasing poverty amongst those with least resilience.

Yet again, it is interesting how opinions become polarised once Fair Trade is mentioned as part of any sustainability solution once dialogue starts on forums. This is a shame as there is much practical experience to learn from all sides. In my experience there are farmers affected by La Roya supplying a bit of their coffee Fairtrade (FT) certified via coops and many many more unable to sell as the market is too small. The dominant tradition is Free Trade, not Fairtrade, nor Direct trade, nor any other cheaper certification. For those lucky enough to have a FT contract it does not offer a solution to La Roya any more than a Free Trade one. Premiums are just too small as it takes seasons to address the issue. 

That debate about effectiveness is therefore about one’s business philosophy. Whether one’s business is small, entrepreneurial, unprepared to have third party scrutiny and unaccountable or large and needing a cost effective CSR programme to field company ‘ethicality’ to shareholders. Either way the issue is systemic. Farmers are rarely powerful intermediaries in the coffee trade, an ocean of sharks few understand and even fewer have the skills and resources to influence, which is only too willing to exploit weaker players. Fairtrade, for all its faults at least gives consumers some insight and some control on the outcomes however imperfect and is at last redressing the balance. Small-scale coffee farmers begin to have a voice.

Most coops are unable to sell anything like enough certified FT to provide enough reinvestment to combat the fungus. Equally, so-called ‘direct’ trade offers such small purchase volumes to specific farms and does not get coverage nor offer down side security. Consumers have no idea who to trust and who is making it up as they go. The real issue for farmers is the trade itself, pushing prices lower for competitive advantage, whether for certified or uncertified coffee. This can happen in any coffee transaction.

FT has no power to adjudicate or influence the transaction when it is above the COP. It would be most interesting for consumers to have transparency on the price /quality/volume equation. A real choice could then be made.

Fairtrade International (who set global standards) remains the only third party certification system that farmers actually have an equal stake in governance, strategy and standards development. As such it can be promoted as part of coffee farmer’s strategy to secure more of the value chain.

Free Trade is in general unable to provide an element of price security that a well-functioning coop can offer when prices fall as supply increases. Unlike Fairtrade, it cannot offer finance for coops to make critical early harvest purchases, which makes farmers price setters. Fairtrade on the other hand can also provide many examples of coop good practice and re-investment. But as a third party certifier, it does not control the transaction between buyer and seller, only certify and there are good and bad coops just as there are good and bad farmers. Most small scale farmers therefore use coops/certification as a price risk strategy, exploiting any upside by selling outside it and utilising it more when there is a perceived downside.

No doubt some excellent coffee is shipped from a few family farms via so called ‘Direct’ trade businesses. Whilst certified Fairtrade was created over 25 years ago by companies doing ‘Direct’ trade, there is now a new wave that does not buy into the values of those pioneers. ‘Direct’ has become a marketing term meaning ‘fairer than fair’ to position the new wave within the customer base created by Fairtrade. However, ‘Direct’ trade by definition has no middle men when really ‘walking the talk’. Few individuals are prepared to finance all the value-chain steps to sustain this at scale though, cherry-picking a few bags of fine coffee and leaving the farmer to market the lower grades. Fewer still are owned (like coops) by the coffee farmers and able to offer a range of services. By definition, they are small businesses which see any additional cost, especially that of independent third party scrutiny as a burden to competing.

The scale challenge remains and investment is needed to create climate resilience for small scale coffee farmers. Once the ‘Direct’ traders can sell thousands of tonnes of Fairtrade coffee, like British companies cafedirect and Twin Trading who also have farmers on their Boards, consumers, perhaps sipping a fabulous ‘Geisha’ coffee can make their ethical choice accordingly, knowing that perhaps, they are creating resilience to coffee rust too!

Science, knowledge and wisdom

When I was still at home in Norwich, a teenager I guess, I read loads of science fiction. Everything I could get my hands on came through the local library run by the Council. I was allowed 2 books’ then 4 as I passed some age, possibly 11, and was allowed into the adult section. The comprehensive school ran a book club, from which I bought one paperback every month. I can’t say my choices ran to classic literature or the moderns of that time, but the occasional sci-fi still featured. I feel sure the library and the club have gone now…

A few of my favourite Isaac Asimov novels (perhaps the Foundation series written in the early 1950s) survived post university clear-outs, sitting yellowed on the bedroom bookshelf until Mum moved to Edinburgh and we sold the house.

He was a professor of biochemistry at Boston but became an educator too and was a great populariser of science during the 1960s… he must have influenced me more than I realise.

I recently came across this quote from him writing in Newsweek (1980, January 21) in the cusp of America’s shift into the Reagan era of conservatism, he declared the U.S. “a cult of ignorance,”

“Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that ‘my ignorance is just as good as your knowledge.’”

The thread has developed in the decades since then. As I listen to the disrespect dished out in public by some of our politicians in the name of free-speech, I am more than ever convinced of the need for evidence, wisdom and transparency .

And then, with particular current observation of the denialists debating climate science, as if it were built on a hypothesis developed in a pub. It all began centuries ago with patient experimentation and theory. As Asimov also reflected, and relating to a questioning mentality that has been with me all my life:

“The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s funny…”

I always felt an answer generated another question… even if the discovery had generated a high degree of certainty proving a hypothesis.

Finally, again written a while back, but still true, what we do with the science is up to our collective wisdom.  How do we make decisions about opportunity and threat?

“The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom.”

Which perhaps leads us to values and ethics to guide our that wisdom.




Tim Tams and Palm oil: Don’t forget child labour

Even in Australia, where rabbits are vermin and fair game for the gun, Easter is celebrated with purchase of chocolate bunnies. This Easter, when Australians double their weekly chocolate purchases, a campaign focused on unsustainable palm oil has hit ethical consumers on social media . It aims to educate consumers with tools to buy wisely, highlighting the impact that forest clearance for palm oil plantations has had on the endangered Orang-utan. This palm oil is an essential component of many chocolate products, the problem is consumers cannot identify it on the label where it is often called ‘vegetable oil’.

Of course it’s not just buying Easter bunnies and eggs. Daily Facebook posts highlight good and bad examples of many other products which do and do not follow sustainable or certified practice, covering every conceivable processed or manufactured food product and cosmetic or household product. Indeed coming soon is an App which will allow shoppers to scan barcodes during the trolley dash.

timtamsEven family favourite, the iconic Tim Tam chocolate covered biscuit, is a key target, one which contains unsustainable palm oil.


Facebook comments reveal real consumer willingness to get behind proactive choice and education too, showing that just as Fairtrade or Organic choices in Europe have added value and social meaning to basic farming commodities; an environmental choice can do so in Australia too.

But Tim Tams are covered in chocolate and as much as orang-utans are a beautiful orange colour, have ageless wise faces and rain forests are needed to convert carbon dioxide back into the oxygen we breathe, chocolate is also synonymous with Child Labour. This campaign is therefore an opportunity to uncover a human dimension of your chocolate bar and the farmers that grew the cocoa beans.


Sustainable or certified palm oil?

Whilst I had a pretty good background on the people side , I checked up on the palm oil. You can read the campaign sites above, but I also found a reliable study and it will tell you everything you ever wanted to know about labour conditions on palm oil farms.!palm-oil-controversies-forced-labor-child-labo. r/c1xrj

It also tells you more clearly than I can what the difference is between Responsibly Sourced Palm Oil (RSPO) i.e. ‘we don’t want to be boycotted or legislated against’ and the preferable Certified Sustainable Palm Oil (CSPO) i.e. ‘we had to change the way we did business and be inspected against ILO standards by an independent agency’

Find out how parts of the industry responded positively to consumer pressure and shareholder questioning of reputation.!palm-oil-industry-response/cgm5


Whilst it is great to see US pension funds threatening to divest can you imagine Australian Funds doing the same under this political climate? There are choices. Try asking Australian Ethical about their policy if you want to ensure your pension is disinvested from this dirty industry without compromising it’s value.

Clearly consumer leverage is strongest if demand is for certified product so I am looking for those.


From Cocoa to Chocolate

So what is the chocolate story? Our favourite luxury is made from cocoa beans grown on small family farms. I worked with a large Fairtrade certified cooperative in Ghana, home to some of the world’s best cocoa, to working with farmers to improve their business.

IMG_168670% of the world’s cocoa is grown on farms of a few hectares in Cote de Ivoire and Ghana in West Africa. As with many crops most of the labour is provided by women. Unless organised around associations, household value remains low which is another factor leading to widespread use of migrant and child labour.

IMG_1727The open pods reveal creamy mucilaginous beans which are fermented and dried on the farms. Intermediaries collect from the farms bulking up until it ends in the hands of the global giants like ADM and Cargill (yes they of wheat and soya). Like all commodities, global traders manage prices by a complex series of forward pricing and hedges with the chocolate brand often locked into prices and manufacturing contracts far ahead.

The best quality cocoa comes from Ghana and it is often used to provide a good quality consistent flavour. Other more individual beans from diverse sources from Madagascar to Peru and Venezuela find their way into speciality or single origin bars. Milk chocolate is rarely more than 20% cocoa and is often (especially in hot countries like Australia) mixed with Vegetable fat to keep it hard under higher temperatures. The darker the chocolate the higher and purer the cocoa content is likely to be.

Whilst much Australian chocolate is made by global brands like Cadbury (now owned by Kraft) they still source from West Africa and blend with cheaper cocoa from Indonesia where plantations have taken hold in recent years with emergence of strong Asian markets. Smaller Australian companies like Whittakers , also source their quality from Ghana.

Why should I care about chocolate products? A BBC Documentary in 1998 revealed that despite global International Labour Organisation (ILO) laws, child slavery was still found on cocoa farms in West Africa. It accused the chocolate brands Hershey, Cadbury, Nestle and Mars of complicity. Successive attempts to legislate in the US have largely failed.

Since then others the spot light has remained on yet still a 2011 study by Tulane University in the USA showed that children are still trafficked. It found that 1.8 million children in the Ivory Coast and Ghana work in the cocoa industry and that the vast majority of them are unpaid. The study also found evidence of child-trafficking, forced labour and other violations of internationally accepted labour practices.



Fairtrade has responded to these challenges and some farmer cooperatives are actively working to eliminate the problem. Whilst this is a slow process requiring continual education and empowerment at farm level, Fairtrade offers a market based framework of sustainable livelihood development within which this can happen.

IMG_1733Annual audits by third party inspection can lead to loss of certification income benefits such as higher prices and premiums.

Fairtrade Australia is promoting certified chocolate eggs this Easter. The global Fairtrade standards are defined by Fairtrade International, partially owned by small farmer organisations and workers.

Products (not companies) are certified against these standards which prohibit the worst forms of child labour. Farmer organisations receive a market price backed by a cost of production minimum to ensure sustainable production. This floor price acts to protect the farmers if the market goes into oversupply. A social premium supports projects or organisational development of their business.

images[9]Even better, if you want to go a step further, find out more about the pioneer 100% Fair trade companies that developed the first products, read about farmer owned brands such as Divine Chocolate. Co-owner, Ghanaian cocoa grower cooperative Kuapa Kokoo has a website too. Divine brand products are available in Australia via Heart of Chocolate


‘Every Little Helps’.

If the saying was true for British Supermarket giant Tesco, it is even truer for small-scale cocoa farmers and their communities, the orang-utans and the forests they live in and of course we need to clean the atmosphere of carbon dioxide too.

Ask for #Fairtrade certified chocolate products off the campaign list for sustainably sourced and certified palm oil.

Fairtrade is an imperfect yet aspirational success for coffee farmers and consumers


Handsorting defects at Abakundakawa Rwanda v1Union Coffee Roasters emerged a few years ago in the UK at the top end of the coffee trade selling good quality blends and single origins. It speaks the aspirational language of quality. Founder Steve Macatonia has always had a bit of a thing with Fairtrade though and it is good to see him putting pen to paper again in the Guardian Sustainable Business pages published during Fairtrade Fortnight.

I love the debate he stirs up and was stimulated to contribute. I have used his article as a framework for discussion rather than for riposte. I would encourage further contributions from him and others.

Let me be honest that I am a Fairtrade believer, a committed insider and possibly responsible for some of the success. I speak from experience having pioneered and managed 100% Fair Trade food businesses for over 20 years. That said, I also have a few issues with Fairtrade but would use his article and my experience to build on.

What is Fair? Of course we would all like farmers to invest in education, health, climate mitigation, gender empowerment and business development as proscribed by the standards. It’s a much easier emotional sell to talk of the social gain rather than the nitty gritty of business … Feeling uncomfortable that honest values based entrepreneurs have successfully built a billion dollar business around fairness suggests unfairness elsewhere. Yup. Unless you meet the standards you are outside it. The real lesson, remember this is business not an absolutist definition of right or wrong…

A successful safety net for over 20 years

So to Steve’s article. (Sorry once I started it got longer than I planned.. more essay than blog). He starts:

Coffee drinkers want great tasting coffee and coffee farmers need reliable and consistent demand for their crop. Roasters and distributors are seeking dependable producers of high-quality coffee, grown under sustainable environmental and social conditions.

Fairtrade certification set the tone to fulfill the need for socially sustainable coffee production by providing a price safety net to coffee producing cooperatives.

A bit of history, the bi-partisan International Coffee Agreement, which had provided price safety nets for millions of farmers for decades, was collapsed by consumer countries like the UK and USA when they withdrew quotas (the supply/demand lever) unilaterally. As a result the price plummeted in the late 1980’s pushing farmers towards poverty.

Fairtrade was a market based response to this collapse. In 1991, I remember trying to sell (via our new cafedirect proposition) roast and ground coffee of good quality, where people wanted to buy it… i.e. in supermarkets. We became agents for the democratic coops of small-scale coffee farmers who were a good place to begin supply as they could be relied up to negotiate fairly on behalf of their members.

For 6 years or so, cafedirect was the most widely recognised face of Fairtrade in the UK. It was a joint venture between 4 very different businesses or NGOs. Twin, an NGO/coffee trader, Equal Exchange a food selling coop, Traidcraft a Christian business and Oxfam, an NGO with lots of charity shops. We very quickly focused on our new business of creating a brand, selling good coffee in supermarkets. Other NGOs had had a different vision of setting up independent standards for any company to join as a licensee and Fairtrade certification arrived in the UK in 1994, two years after Lorna Young won our first supermarket sales into Scottish stores of The Coop and Safeway. Our paths have crisscrossed ever since, but as a business insider I can offer critical insights into the challenges that Steve outlines.


For most (about 80%) of the last 25 years since the collapse the average green coffee price has been below average cost of production, so for a growing number of farmers Fairtrade fulfilled its safety net mission. Picture1

Indeed, it’s success can also be measured by the volume of business and current competitive position of grocery distributors such as Sainsbury’s (entire own ‘private’ label Fairtrade coffee category), global brands (joining lower cost entry certification alternatives like Rain Forest Alliance or Utz Kaffee) or to a much smaller extent private ‘Direct’ self-certified (the alternative traders and likes of Union Coffee). Together these suggest a successful but maturing market.

Remember, Fairtrade is an international certification standard (as are RF and UTZ). It is not just about the safety net, but also about other key business issues for farmers like timely pre-harvest finance. This is facilitated at the request of the coop, either direct lending via the buyers as the alternative traders did 25 years or more ago, and now  more commonly via third party lenders such as Shared Interest, Root Capital or Responsibility. These lenders leverage the long term relationship that consumers have with Fairtrade, to take more risk than commercial banks, perhaps another subject for GSB to explore?

Interestingly, no other certification fulfils the safety net function and no other requires fulfillment of a finance function.


Challenges ahead

Now, to what is I suspect Steve’s main point. He is correct, in my view, to say that Fairtrade is least effective when green coffee prices are high. For instance, in the 90’s when Brazilian droughts cause price spikes despite markets flooded with very low quality coffee or recently when Arabica demand has outstripped supply.

In the rising market coops can use the strength built by participation in the lean years to negotiate a higher price built on expectation of further rises. Yet, especially once it begins falling, they do report some traders using the then downward market to also bid down prices between farmer coops. Is this fair or unfair or just the market working?

Paradoxically the crop finance issue above gets worse for the coops in these markets as cash flows tighten so the pre-finance function of Fairtrade can provide critical advantage.

However, the output of Fairtrade certified production is mostly mass market commodity grade coffee which doesn’t deliver the impact to really change producers’ lives in a significant way.

There is little freedom for the individual farmer and no incentive to focus on quality or innovation.

I think this minimizes the success to date for many farmers and rather simplifies the market.

Fairtrade contracts offer predictability in a historically volatile market. Coffee farmers are as aware of this volatility as any. This very predictability brought by Fairtrade is a success not a failure and a step forward. Yet very very few farmers sell their entire crop to the coop. That too would be risky too.

When an individual family faces the market alone, more often than not, they face prices much lower than the coop pays. Few farmers have a large choice of traders let alone the power to bid up prices! Traders function mostly as cash rich middle men making their offer early when household cash balance is at it’s lowest. Selling a proportion then may pay for schooling or urgent repairs etc. Thus early market signals from Fairtrade buyers can raise cash and compete with middle men so creating more impact.

Not unsurprisingly when the market is rising strongly, farmers do sometimes break contracts with their coops and sell to middlemen, for short term gain, leaving coops in contractual default and lenders having to reschedule.

It would be encouraging if farmers and coops had more choice from an empowered position to negotiate. Any parallel initiative, offering secure steps up the value chain, should be encouraged. Sometimes this may mean coops sell outside Fairtrade, for instance to Union Coffee. If consumers are willing to pay a higher price so be it, but fairs fair don’t undermine the intermediary role the coop plays by persuading farmers to break contracts.

A more sustainable approach would reward excellence. It would be based on quality, innovation, growth and economic progress. It would be accessible to all farmers, not restricted to just co-operatives.

As we examine the quality issue more closely, we notice that very few buyers are willing to invest in visiting individual farmers in any region. I would challenge even a committed buyer like Steve to find an economy of scale in that. The coop is therefore an excellent vehicle for adding economy of scale value, assisting farmers move up the value chain. The coops have long been most successful in supporting the safety net with certification; more and more they can also support quality development.education4[1]

As coops understand that a shortage of quality Arabica exists, they participate more confidently in supported initiatives whether inside or out of Fairtrade and gain advantages for their members.

This is one area where Fairtrade practice provides good examples of supporting the wider push for better quality. Many participate successfully in regional ‘cup of excellence’ competitions that were pioneered by coops in Nicaragua and have now spread to Africa and Brazil.

Coop micro-lots traceable to specific farmers fetch high prices in the US specialty market. but challenges and sceptics remain.


Cost, efficiency and choice

In 2012, 430,000 metric tons of Fairtrade certified coffee was produced but only 30% was sold under Fairtrade conditions. Despite investment in certification, farmers would only receive commodity prices for the remaining 70% of their crop.

We come to a section about cost, choice and efficiency. Let’s be clear, the coop invests in and pays the certification not the farmer. If a farmer sells outside it she/he does not incur the direct cost of certification, she/he also takes the risk and opportunity of so doing. Equally, levers do exist within the coop, with boards and managers being removed for poor performance just like in any other business.

In addition, Fairtrade has always consulted heavily during reviews of cost of production. Now farmers are integrating at all levels of both decision making and governance. This surely signals authenticity and clear water between it and other certifications and private/Direct propositions

This brings me to yet another piece of detail. In many places farmers do the first value adding by pulping the red cherry, but full grading is impossible until after hulling. This requires the scale a 1 hectare farm just doesn’t have. The Coop if large enough may do this but it will certainly be able to offer the farmer this service.

In reality all coffee has to be graded. I suspect in many cases, the very best (probably <<5%) will be saleable to buyers like Steve prepared to buy small lots for high prices. The middle 30% represents some of the better grades, leaving the rest below Fairtrade buyers requirements. These coffees are often sold in local markets or as fillers in very large export orders. Critically you might say that if demand is there, coops will ignore Fairtrade and sell the better grades elsewhere leaving the poor grades for Fairtrade consumers. This is indeed a potential issue for the reputation of Fairtrade system. Perhaps it needs more Specialty buyers like Steve, not less, to set the Fairtrade bar higher! At the end of the day each coop will examine it’s own context and try to sell it’s crop as profitably as possible

I would agree with Steve, how can transform quality, especially Arabica quality, upwards on a large scale. This is a problem the whole market is trying to address not just Fairtrade.


Positive social impact from the coffee value chain founded on the basis of Fairtrade certification is limited by world markets.

Again let’s underline that Fairtrade brings livelihood impact both social and economic whilst strong and trusting relationships generate confidence. As a business of course it’s penetration or success is limited by world markets. The issue is can we create a market based model which is more resilient for more small scale farmers in good times as well as bad.

Fairtrade has always consulted heavily during reviews of cost of production. Now farmers are integrating at all levels of both decision making and governance. This surely signals authenticity and clear water between it and other certifications and private/Direct propositions


How can coops move up value-chain?

In 2013 the average world market price for Colombian Mild Arabica was $1.48/lb, (£0.89/lb) which is eight cents/lb greater than the Fairtrade minimum price (not including the optional 20c social premium).

Those roasters and importers who seek high quality, speciality coffee do not rely solely on certification. An alternative trading model focuses on the prices that customers are willing to pay, rather than the market basic or even average price; if it tastes delicious, we want that coffee. For some coffees, this approach can achieve 10 times above the Fairtrade price.

Coop managers respond specifically to the market at any point. As already described, the market price rose in 2009 above that average for first time since 1995 and has remained so since then except for a few months last year.

The Colombian Milds is a good indicator of the grade of many good Fairtrade Arabica coffees. Recent ICO figures show that that price fell from $1.69 in Jan 2013 to $1.48 in June  falling through $1.24 but rising sharply again to $2.24 as we speak. (Another climate related story!) Indeed it was over $3.15/lb only 2 years ago. When I worked at EE we were lucky to buy Colombian anywhere near minimum price. Good Ugandan Arabica AA was selling at that level too and Sumatrans even higher. My point is that comparing price and quality is very difficult and all buying or selling decisions depend on the moment the deal is done and outlook on the market.

Perhaps Steve also uses the term ‘alternative’ here to mean ‘other’, you will now find that the UK Fairtrade Foundation highlights the best practice from the so-called Alternative Trading world. Best practice from it seeks to give coops the tools to make good decisions at all times. Indeed, without the best practice of Twin, cafedirect and Equal Exchange Instant coffee came from the Cafe Soluble factory in 1984amongst others, consumers impression of Fairtrade coffee quality would, oh dear, indeed be that of the old Campaign Coffee.

Teaching producers how to evaluate and grade their own coffee helps farmers to understand what buyers might be looking for, and puts them in a stronger negotiating position. It also encourages continued improvement.

lydiamarieThis is a widely copied innovation more licensees should participate in. Twin and others have been setting up cupping labs in coops ever since they pioneered cafedirect Machu Picchu  selections in the late 1990s, so Steve is right getting this quality feedback back to farmers cost effectively is critical.

One of the most profound examples comes from Twin’s award winning work in the Democratic Republic of Congo conflict zone. Following 6 years of investment, farmer led coops (supported by certification minimum price) can enter European and US markets for the first time and moved average prices for individual farmers from -40 to +40 against the NYC average plus a premium. This example spreads confidence indirectly as well as directly throughout a community and can only be done lead by cooperatives with the secure market and potential pre-finance that Fairtrade offers.


Farmer initiatives such as the  Joint Marketing Initiative change the entire dynamics by moving them up the value chain. How can we position Coops in the market place to sell more effectively whether the market is high or low?

Certification is one business tool amongst many that assist Coops and their farmer members on the climb to market access.

Smiley poor people or respected farmers: Who grows my coffee?

Farmers, distributors and consumers should be able to answer questions such as, who roasts my coffee? Who drinks it? What price does it fetch in the UK? Many coffee roasters – let alone coffee drinkers – don’t know which country their coffee comes from, let alone which farm.

I have no problem with traceability. The best quality food always has denomination of origin displayed in some way. If your customer can pay for the system to trace the product to the farmer, whether that is electronic or trust based on a small volume visit, fantastic. The more companies that support and invest in this best practice the better.

Equally if Fairtrade distributors do not promote their source or generalise the proposition to be meaningless, who knows perhaps they are bidding prices down to FT minimum?

No farmer wants you to buy their coffee because they’re labelled as ‘poor’. A sustainable long-term relationship, season after season, works both ways between buyer and producer.

Development professionals have sought for decades to move the imagery and narrative away from charity and ‘poor farmers. Fairtrade is a business concept which is part of that narrative and employs the skills of PR professionals in communicating the positive story of inspirational leadership and farming skill as well as the realties and challenges of daily life. It is re-visionist to suggest the focus was still otherwise. I would stand with Steve and challenge any patronising ‘poor me’ simplifications. That said I am pleased to see him briefly mention the value to farmers of long term and engaged relationships from the coffee trading community. It was exactly that which inspired and informed the expertise in the ATO (Alternative Trading Organisation) movement that pioneered Fairtrade over 25 years ago. I could continue here on learning models. Are we empowering choice or telling farmers what they should do but that reflection can wait for another time.

Consumers may buy cause-related products once or twice, but life’s too short to drink bad coffee – or, arguably, simply waste money on it. Focusing on high quality and sustainable production of coffee is the only fair way to manage the coffee supply chain. This approach is not easy and introduces complexity in explaining trading models.

Absolutely. Quality is precious, there is plenty of bad coffee about and most of it is not Fairtrade. I am the first person to discard a pack after one purchase if I do not like it. However, if the overall quality of Fairtrade was that bad, the market would not have grown and achieved such stability for two decades or more. During that time quality has improved enormously as consumers rejected poor offers and rewarded good ones.

Fairtrade will rightly be challenged by consumers demanding better quality and traceability. Those who want the ‘cask matured single malt whisky’ equivalent will pay for the additional selection cost and the traceability and the relationship for such small volumes. Many of these customers are promiscuous and do not stick with one origin though. They like the change and uniqueness of each offer. There is little stability for the farmer though

These initiatives may require extra effort from consumers compared with buying a pack of coffee with a succinct logo, but it’s more effective for the farmer and more pleasurable for the customer

If Arabica farmers want to move on they will… probably to Union Coffee or the big US Specialty market amongst others but only if the prices are consistently better. The best farmers will always move on and seek a better return on risk and others will follow if they succeed. However consumers will have to demand better quality first.


Aspirations for the 21st Century?

We have seen how developments within Fairtrade, take it beyond a safety net, For example they assist quality development using cupping labs and to develop price risk management strategies for managers, and really upgrade a coops capacity for sustainable business.

Coops are key democratic intermediaries to deliver scale and effectiveness to Fairtrade’s vision amongst coffee farming communities. The Certification business model must work well when prices are higher as well as lower. It must offer competitive advantage for younger, vulnerable or crisis prone coops as well as the more successful. It must spread success both deeper and wider. Above all to expand globally, it must continue to appeal to consumers in markets with several decades exposure to sustainability and perhaps new ones in emerging regions too.

So, perhaps it is time for Fairtrade to look ahead and add more value to its development ‘model of change’… Grown by Women Mary Nabugobelo sstandards would refocus the value chain on the most effective lever for household livelihood improvement and align with UN Millennium Development Goals. A new Robusta offer could leverage the vast instant coffee market, (though preferably one which does not contradict or compete with the current Arabica focus). Both would keep the offer fresh and competitive with the other ethical certification offers and pull in new consumers.

There are many ways Fairtrade isn’t enough, and in a relatively mature market, it does needs to change to stay ahead.  However, good cups of coffee are worth a premium and the coffee trade needs branded offers like Union Coffee (and my former company Equal Exchange) that set the quality bar high, whether they are Fairtrade certified or not.

Where Real Food is only referred to in the past tense

A late Christmas present copy of The Gaza Kitchen by Leila El-Haddad and Maggie Schmitt arrived last week.


It is full of insights into the lives of the women who keep stomachs full despite the trade embargo which has destroyed most economic activity. The recipes are simple, but eloquent statements of Gaza, its people and its history and future aspirations on hold.

This is both a cook book with easy to follow recipes, and a cultural journey from a forgotten corner of  the Mediterranean Sea.

My favourite quote comes from an elderly lady, Um Ibrahim.

Now 89, she remembers a wholesome village life prior to their enforced 1948 Exodus in the face of Jewish militias. They headed for the then safety of Gazan refugee camps. She describes recipes not from her current day to day, but from that earlier memory. Now real food is referred to in the past tense.

‘’I am telling you how we would cook and eat in the past; here everything (the UN hand-outs she and her family have lived on since 1948) is unwholesome, bad food.  In the past we ate heartily and were very healthy’’

Learn all about life in Gaza through the eyes of the women, their food, and their traditional and adapted recipes. Look for Palestinian #fairtrade olive oil from Equal Exchange and a range of Palestinian products from Zaytoun CIC