FLO: New Premium, Minimum Price and Trade Standards in Coffee
JOIN OUR MAILING LIST
Enter Email
CONTRIBUTE TODAY
FOLLOW US ON
FEATURED CAMPAIGN

 Watch the Video

FacebookTwitterGoogle+EmailShare
   

New Premium, Minimum Price and Trade Standards in Coffee

www.fairtrade.net

15 March 2011

In the past year international prices for coffee have hit a 14-year high, sending waves throughout the coffee world from farmers to consumers. Fairtrade International (FLO) today announces a new Fairtrade Minimum Price and Premium, a higher organic differential and revised trade standards for coffee to support producers and help ensure stable supply chains.

Lower than expected coffee harvests due to inconsistent rainfall and a lack of investment in coffee plots, increased competition for high quality coffee beans, and financial speculation fuelled the rise of coffee prices. A recent New York Times article highlights some of the problems that are driving prices up around the world (“Heat Hampers Colombian Coffee Crop, Jeopardizing Supply,” The New York Times).

In November, Fairtrade International (FLO) announced the Fairtrade Coffee Actions, a number of concrete steps to help producer organizations, traders and roasters cope with the market fluctuations. The review of the Fairtrade Minimum Price, Premium and trade standards are part of the effort.

Changes include:

  •  An increase in the Fairtrade Premium to USD 20 cents/lb from the current USD 10 cents/lb, of which 5 cents will be earmarked for productivity and quality improvement efforts. Use of the Premium is democratically decided upon by members of the producer organizations and is often used for social or business development efforts.
  •  An increase of the Fairtrade Minimum Price to USD 1.40/lb for washed Arabica coffee from the current USD 1.25; Arabica naturals will increase to USD 1.35/lb from USD 1.20. The new Minimum Price provides a stronger safety net for farmers if prices fall and helps producer organizations secure more pre-financing to purchase coffee from their members.
  • An organic differential of USD 30 cents/lb from the current USD 20 cents/lb. As prices for conventional coffee have risen, fewer farmers see value in seeking and maintaining organic certification even as demand is increasing. The organic differential is in addition to the agreed price to account for higher costs of organic production and encourage organic coffee farming.

Revised trading standards that were developed to encourage fairer negotiations, clarify the role of price fixing, and reduce speculation. Complementary to the new Trade Standards, FLO is facilitating training for producers and traders on contracts, price fixation and risk management strategies.

The changes made by FLO strive to meet the needs of producers and ensure healthy supply chains for traders and roasters.

“The coffee industry has not taken a hard look at risk management and FLO adding that in to [the trade standards] really helps us open up that conversation,” said Ed Canty, Fair Trade Organic Coffee Buyer at Green Mountain Coffee Roasters in the United States. “For too long as an industry, all of the risk rolled back down to producers and this year [many roasters and traders] got caught.”

Silvio Cerda, Executive Director of the Red Café, an organization representing the interests of small-scale coffee producers throughout Latin America, added: “In the medium- and long-term, we hope to see a strong impact from the creation of this earmark for improving productivity and quality. The CLAC and Red Café are convinced that having the resources needed to invest in the medium-term can guarantee that small producers will be able to increase their productivity, which will result in not only greater income, but will help ensure that producer organizations can deliver and supply coffee for the industry.”

In researching and recommending premiums, prices and trade standards, project managers at FLO walk a line between providing the greatest benefit to small-scale farmers and workers, while ensuring market accessibility. The review process is a monumental collaborative effort based on consultations with producers, traders and all players in the field, external studies on costs of production, and input from experts around the world.

“The current market for coffee has pushed us to consider how the Fairtrade system operates and provides value to producers, importers and roasters,” said Caren Holzman, Head of Global Product Management at FLO. “The results strive to meet the needs of producers and address the challenges at the heart of this coffee crisis.”

The Fairtrade Premium, organic differential and trade standards will apply to Arabica and Robusta coffee. The Minimum Prices announced apply only to Arabica coffee. A review of Robusta coffee, which makes up 4% of Fairtrade certified coffee sold, will follow in the near future.

 

 

FacebookTwitterGoogle+EmailShare

Fair Trade is the Pathway to Regenerative Agriculture

Coop Coffee

The movement for a food system that sustains people and planet is been growing. Fair trade offers a model to incorporate fair livelihoods and the true cost of production into regenerative agriculture models that are both new and very old, feeding the world and tending the planet. Written by Ryan Zinn The climate is changing, […]

A Soil-to-Soil Vision for the Fashion Revolution

Paige Green - Fibershed

From origins in Northern California, Fibershed is building a global network of regional regenerative fiber systems. Founder Rebecca Burgess describes her vision for vibrant local fibersheds that connect us to the landscapes that grow what we wear and sustains a new generation of farmers, ranchers, natural dyers and mills. From conventional cotton production, which uses […]

Fair Trade As We Do It: the Story of Jumbo Nuts

Annie Jose sewing rice seeds into her rice paddy

Fair Trade Alliance Kerala, the small-farmer collective I work for, is recapturing the homestead farming traditions of Kerala. Our goal is to grow to about 10,000 farming families stewarding about 40,000 acres of farmland, creating conditions that are akin to a tropical rainforest in crop diversity and biodiversity. For us, biodiversity is a food security […]

Regenetarians Unite!

Regenetarians Unite

As eaters, we have a choice: will our diets restore and replenish the earth, or will they deplete it? An exploration of three key principles that look beyond simple distinctions between omnivore and vegan towards a new Regenetarian ethos. By David Bronner How the Regenerative Agriculture and Animal Welfare Movements Can End Factory Farming, Restore […]

What Does “Regenerative Agriculture” Mean to You?

Women Workin in Fields - Coop Coffees

We asked that question to a handful of leaders, growers and thinkers from around the world. Here are a few of their thoughts. “Regenerative agriculture, based on our Andean experience, is the direct relationship with life. It gives life back to Mother Earth, provides food that connects with every aspect of human beings and their […]

Product Picks

Peace Coffee

We asked our team for some of their current favorite products from companies committed to the principles of fair trade and regenerative organic farming. Find them online or at your favorite natural food store! Imagine an economy that rewarded small-scale producers for their hard work, fed us all healthy food, and clothed us sustainably. While […]

Fair Trade for Farmers and Soil

Plowing field with oxen

Small-scale organic farming and regenerative agricultural practices combat our climate crisis and help feed the world. Here are just a few of the ways that fair trade producers and their brand partners are collaborating to grow ethical supply chains through regenerative organic agricultural methods, and producing goods that we can all feel good about. This […]

The Hidden History Made at Sakuma Brothers Farms

Picking blueberries: Copyright David Bacon

History was made on September 12, 2016 with the election of Familias Unidas por la Justicia to be the union representing berry pickers at Sakuma Brothers Farms in Washington state. Three perspectives on what that means for farmworkers, farmers, and our food system. History was made on September 12, 2016 with the election of Familias […]

Food Waste, Hunger and Climate Change

Food Wastage Footprint and Climate Change, Rome FAQ

As a child, you likely heard some variation of the cliché, “Eat all your food; there are starving people in the world.” While hunger remains one of humanity’s greatest challenges, the underlying causes are not as clear as one might think. Written by Ryan Zinn As a child, you likely heard some variation of the […]

Fair Cannabis?

Trimming

For decades, workers have flocked to Northern California and Southern Oregon to work the fall cannabis harvest. Some are migrants on their seasonal tour. Others are driven by an interest in cannabis culture, or by the promise of lucrative pay. While some “trimmers” have had pleasant, safe and profitable experiences, many have not. Written by […]