Fair Trade, Free Trade, and the Coffee Trade — What Do These Labels Mean?

Fair Trade, Free Trade, and the Coffee Trade — What Do These Labels Mean?

R. Albert Mohler, Jr.
March 9, 2006

How should one buy a cup of coffee? In times past, this hardly seemed to be a great moral question, but now things are different. Some coffee brands are listed as “Fair trade,” which seems to imply that other coffee brands may be less than fairly traded.

The current issue of Reason magazine offers a very helpful survey of the issue and its development. As writer Kerry Howley explains:

Fair Trade certification, intended to raise the living standards of coffee farmers in Nicaragua and elsewhere, has grown into a complex bureaucracy and an industry in itself. Starbucks, the longtime Enemy No. 1 of the Fair Trade crusaders, agreed to purchase a limited amount of Fair Trade certified coffee days before a planned protest in 2000. The company bought 10 million pounds in 2005. In 2003 Dunkin’ Donuts agreed to make all of its espresso drinks certified. Nestle, one of the biggest coffee companies on Earth, launched a Fair Trade line in October 2005; the same month, McDonald’s agreed to test Fair Trade in 658 outlets. High-end specialty coffees are the fastest growing sector of the industry, and Fair Trade is the fastest growing specialty coffee; demand for it has ballooned by around 70 percent annually for the last five years.

All this is very interesting, and Howley’s analysis is truly revealing.  Consider this assessment:  The movement has always aroused suspicion on the right, where free traders object to its price floors and anti-globalization rhetoric. Yet critics from the left are more vocal and more angry by half; they point to unhappy farmers, duped consumers, an entrenched Fair Trade bureaucracy, and a grassroots campaign gone corporate

As expected, the background to the Fair Trade movement is rather complicated. Howley explains:

The Fair Trade label was born in the Netherlands in 1989 under the brand name Max Havelaar, taken from the title of a 19th-century novel about oppressed Javanese coffee plantation workers. When the company came to the U.S. a decade later, the American branch billed itself TransFair USA. TransFair’s stated goal is simple: to ensure that farmers get a decent price for their beans, and to let consumers know it. By cutting out predatory middlemen and selling a clear conscience at a premium, coffee idealists hoped to achieve humanitarian goals by capitalist means.

But Howley’s conclusion is especially interesting:

Coffee is not the only Fair Trade product–there are Fair Trade toys, musical instruments, diamonds, even soccer balls–but it is by far the most successful one. Unlike manufactured products, coffee readily lends itself to a deeply personal, bucolic story of creation and exchange. From planting to picking to roasting to pouring to drinking, there is no step in the process that does not require a human hand. The horror story Katzeff was telling 20 years ago was a simple one for consumers to envision, and the redemptive story TransFair sells–its literature thick with the smiling faces of coffee farmers the world over–invites the consumer to act as protagonist.

“This is seen by many as a direct way by which they can influence the way the world is,” explains Lawrence Gould, a London-based consumer markets analyst. Fair Trade consumers are buying a story of personal connection, a vision of transparency, and an impression of political influence–not a bad deal for a few extra cents. If the picture of Fair Trade as a poverty panacea is off base, so too is that of the duped, defenseless consumer.

Coffee’s long history suggests that its place in any one culture is shifting constantly to meet the needs of the millions who drink it. Today, consumers are driving a market for coffee that transforms the act of drinking into a muted act of rebellion against a centuries-old system of exchange. Yet what is revolutionary about Fair Trade is not the brand’s focus on poverty but the suggestion that consumption is a moral response to inequality.

In this fallen world, economic issues are never as easy as might first appear.  Christians are called to seek justice and to live justly, and this means that we are accountable to God for our economic and financial actions and decisions.  The issues behind a movement like Fair Trade are complex and daunting.  Who knew that buying a cup of coffee could be so morally complicated?

This article should serve to inform us of the Fair Trade issue as a moral concern.  At the same time, the larger moral question for us all might be the fact that Americans are obviously willing to pay as much for a cup of coffee as would recently buy an entire meal.  This is an option the poor do not share with us.

R. Albert Mohler, Jr.

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