“The power to change the world every day”

It’s a huge claim; and this is what the Fairtrade Foundation lead with on their website. Personally, buying Fairtrade products, despite costing that little bit more, has always instinctively felt the right thing to do (the result of some effective marketing I suspect). But it wasn’t until starting a coffee business and deciding which coffee to source that I really began to understand the real ethical value of paying more. In this article, I explore that in more detail and why at New Kings Coffee we believe it’s worth paying the extra few pence for an ethical product like ours.

First, however, a bit of background about Fairtrade and what it’s all about. The Fairtrade Foundation’s mission is “to connect disadvantaged producers and consumers, promote fairer trading conditions and empower producers to combat poverty, strengthen their position and take more control over their lives.” – Can’t disagree with any of that and we’re all for a bit of taking control over our lives at New Kings Coffee (cue quick and easy to use coffee bag ;-) )

One of the main ways Fairtrade enacts its mission is through ensuring better prices for farmers and producers. It does this through setting minimum prices for products (the Fairtrade Minimum Price) and by paying an additional Fairtrade Premium, which is to be invested in community projects of the community’s choice. More on this in a bit.

In return for the higher price, Fairtrade set social, economic and environmental standards for the farmers and workers, and check that these are being met throughout the supply chain. The Fairtrade logo is then awarded to products where these standards are consistently achieved.  Obviously, for an organisation that has been around for 25 years (founded in the UK I should add), it does a whole load of other stuff as well.

For example:

  • working with producers on specific issues, like Bolivian coffee farmers tackling the plant diseases linked to climate change, or cocoa-growing communities creating a women’s leadership school in Côte d’Ivoire;
  • lobbying government to demand fairer treatment in trade deals towards farmers in developing countries; and
  • driving consumer awareness through a number of local, national and international schemes, as well as through effective marketing campaigns – how thought provoking was their recent ‘Don’t Feed Exploitation – choose Fairtrade’ campaign?

As a former banker, you get to work with a lot of numbers. So I thought I’d share a few numbers about Fairtrade and the impact it has around the world:

  • Buying Fairtrade products supports over 1.7m farmers and workers around the world;
  • Two thirds of these are in Africa and other low income regions;
  • Globally, a quarter are women but women can make up to 70% of the workforce in some countries;
  • Over half of all Fairtrade supported farmers produce coffee, the largest workforce of any Fairtrade product;
  • And over 50% of Fairtrade producers are also Organic certified - organic culture means more than just organic fertilizer: it is about incorporating principles and values into farming practices, and balancing the needs of business, society and the environment.

So let’s get back to that extra few pence we pay for our Fairtrade products. As I mentioned above, there are two elements to this:

  1. The Fairtrade Minimum Price – this is essentially a price collar, which only becomes applicable whenever the free market price of a product falls below a certain threshold. For coffee, the Fairtrade Minimum Price is $1.40 per pound weight of coffee ($1.70 if it’s organic as well). And this minimum price isn’t just for the ‘once in a blue moon’ eventualities. As I write the market price for coffee is $1.35 and has been below $1.40 for much of the last 4 months. So the Fairtrade Minimum Price ensures coffee farmers and their families receive at least $1.40 for their hard efforts in growing and producing a pound of coffee.
  2. The Fairtrade Premium - Over and above the Fairtrade price, the Fairtrade Premium is an additional sum of money which goes into a communal fund for workers and farmers to use – as they see fit – to improve their social, economic and environmental conditions. Producers determine what is most important to them; whether this is education or healthcare for their children, improving their business or building vital infrastructure such as roads and bridges for their community. The current Fairtrade Premium is $0.20 per pound weight of coffee and this adds up to over $100m in additional funding for Fairtrade communities.

So back to that claim - “The power to change the world every day”. Ok, so Fairtrade products cost a little bit more than non-Fairtrade products. But to my mind, it’s worth it for the benefit created around the word for countless communities, families and individuals. Whether you buy Fairtrade New Kings Coffee, or someone else’s, don’t you think it’s worth it?

What do you think? I’d love to hear your views.

Jason Nichols, Founder, New Kings Coffee