Fair Trade Facts: What is fair trade?

How does fair trade work?

Person picking coffee

A Central American farmer harvests green coffee
beans. If this man is not a fair trade farmer, he’ll
only receive 20 to 40 cents per pound from a
middleman. This may reduce him and his family to
a cycle of debt and poverty.

Fair trade creates a fair and equitable partnership between North American coffee consumers and producers in Asia, Africa, Latin American and the Caribbean by guaranteeing coffee farmers a living wage, which is a minimum price of $1.26 per pound regardless of the coffee market price.

Currently the market price for coffee is hovering around 85 cents per pound. When the market price for coffee is this low, coffee farmers receive only about 20 to 40 cents per pound from the middlemen to whom they typically sell their crops. When farmers receive such a low amount for their crop, they often do not have enough money to cover the costs of production. This forces them into a cycle of poverty and debt.

The fair trade price of $1.26 per pound gives small farmers a way out of this cycle by providing them enough money to pursue educational opportunities, seek health care and improve housing and water supply. Fair trade also provides access to credit and long-term relationships with importers and roasters.

© 2006 by Mesa Johnson
E-mail me at mmjohnson2@stthomas.edu