RETHINKING DEVELOPMENT
Local Pathways to Global Wellbeing
St. Francis Xavier University, Antigonish, Nova Scotia, Canada
June 20 to June 24, 2005
From Seed to Sale: The Journey of the Coffee Bean
Presenters:
Jeff Moore, founder, Just Us Coffee, Nova Scotia, Canada;
Francisco VanderHoff Boersma, founder of fair trade, Mexico;
Hudson Shotwell (chair), owner Trident Café, Halifax, Nova Scotia, Canada
Rapporteur: Gord Cunningham, Coady International Institute
There were 16 workshop participants - several university students, a film maker, a journalist, an organic farmer, a person who worked with producers in Costa Rica, a person who worked recently with a medicinal and aromatic plant producers association in Ecuador and a few others
The Chair, Hudson Shotwell, introduced the workshop by pointing out that coffee is the world's second most important commodity next to oil in terms of value of worldwide sales. He suggested that what constitutes a good cup of coffee is what this workshop is about. This workshop will cover the journey of a coffee bean — from the ground to a cup of coffee.
In the mid-1980s he took a group of the farmers to Holland to learn about how to export coffee themselves. This is where the notion of fair trade coffee was born. A discussion in Holland ensued about new approaches to development — about fair trade rather than aid and in particular about how to promote fairly traded coffee. The first fair trade organization was established in Holland. In the beginning it was difficult. The group had to figure out criteria and rules. They had to design an organization that would work to democratize trade in coffee. Large companies harassed them but they stayed together. In fact they spread to different countries — Holland, Belgium, Luxemburg, Germany, France, Spain and later North America. Working together these groups established FLO (Fair trade Labelling Organization). The organization eventually moved into other commodities such as honey, cocoa, and bananas. The first step in each was to get an understanding of the real cost of production for farmers.
In the mid 80s the organization in Mexico started focusing on organic production. They were able to get certification. At the time the Mexican government did not recognise the notion of organic. For them it was a new concept, in spite of the fact that almost all indigenous agriculture in Mexico we organic (people couldn't afford the chemicals).
In the early 1990s in Europe an economic case for fair trade was beginning to be made. It was becoming evident that that consumers wanted it. This got retailers interested. One large retailer agreed to increase the percentage of fair trade coffee sold by 5% each year. Now many retailers are selling fair trade products whether they like it or not. Some have even tried to promote their own fair trade labels. Thankfully these have failed because they are not transparent. The four largest coffee merchants in the world last year made USD $2 billion without producing a single bean. They did it by speculating on coffee futures. A lot of work has also been done in the political arena. The story is getting out that unfair trade is responsible for underdevelopment, even terrorism. There is a growing movement promoting corporate social responsibility with with churches, NGOs, consumer groups, and unions pressing large companies and local retailers to accept the rules of fair trade. The issue of fair trade has now made it on the agenda of the G8 meeting in July 2005. In addition Kofi Annan has put it on the agenda of UN this September. This political movement is a counter weight to the forces of globalization.
For a more detailed history and account of fair trade as practiced by Francisco VanderHoff and the Union of Indigenous Communities of the Isthmus Region in Mexico, see: Union of Indigenous Communities of the Isthmus Region
(33 page, 203K PDF)
Jeff described his personal journey in starting Just Us coffee. He got interested in the idea of fair trade coffee from an article in the New Internationalist in 1995. This issue had the names of contacts in Mexico City so went to visit them. He got contacts from them for coffee growers in Chiapas so he went there on bus. He didn't speak any Spanish and the Zapatista revolt was in full swing. Eventually he got up into the mountains where people depend on growing coffee for a living. Even without any language he was able to pick up their pride in producing organically and the sense of dignity they had as members of a coop. To use a phrase of Moses Coady he felt they were masters of their own destiny. He was so impressed he came home and told his wife he had to buy container (or 17 tons) of coffee worth $60,000. He had no idea how to market it but with some RRSPs, a second mortgage and some help from ACOA he bought the container and also brought some Mexican farmers to Nova Scotia. Their tour generated a lot of media attention and the orders started coming in. The struggle then became keeping up with customers. Just us began its first year with sales of $35,000. Last year they had sales of $3. 5 million.
Fair trade is a model that embraced all four pillars of this conference. It is about fair prices to producers but it is equally about preserving indigenous culture and the environment and about people having control over their lives.
Some of the issues
Marketing - demand is the main issue for the industry as a whole. While it is possible for small companies like Just Us to thrive for many producer groups it is hard to get on a register for a given commodity.
There is a lot of confusion in the market — organic, fair trade — what does it mean really. There are many businesses that say they do fair trade without being certified by FLO. For example at this conference Honey Care is mentioned as having fair trade honey through IFAD, but IFAD is not a certifying organization for fair trade.
There is a lack of access to capital in the markets for fair trade organizations. When Just Us started growing their bank got skittish. It gave [have] them very little notice before cutting off credit. The credit union stepped in but then they too got nervous. Just Us was able to find a great vehicle for raising capital through Nova Scotia's community investment funds. The last three years they were able to make public offerings and raise more than a million dollars this way. Once the business had more than a million in equity the financial institutions became interested again. This is a problem.
There is also the challenge for small businesses to attract skilled committed and collegial people. Just Us now has 45 people. The business has become much more complicated. They have had to come up with new structures. For the first time they now have a chartered accountant to do projections. Now they have confidence in their numbers.
In order to really move fair trade forward in Canada there needs to be a fair trade movement to lobby government. This movement then has to consolidate. You can't have all these different organization using the term. You have to keep the movement from being self-serving and you have to keep it democratic. You have to be willing to work your self out of a job. If fair trade goes mainstream and you can't compete with Starbucks you have be able to accept this reality.
Workshop Report 2104: Balancing Work and Life
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Photography courtesy Patch of Blue by Stella McNeil.