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Faring for Fairer Trade – PART 2

January 6, 2010

Photo credit: bitzcelt via Flickr

THE SHORTFALLS OF SOME COOPERATIVES

Intelligentsia worked with some purchasing cooperatives meant to drive a portion of the proceeds back to the original producers of the coffee cherries.  After two years in working with these cooperatives, Watts began to see a positive impact on the quality of the products, but not necessarily in social changes – at least to the extent he wanted.

So he started digging around. He looked at the entire custody chain of coffee: from the farmer, to the drier, to the importer and then followed the money backwards. Even though Intelligenstia was paying three times the amount others usually paid, “What I realized is that you can’t just throw money. For example, the payments we were making weren’t reaching the farms until six months after sometimes. By the time it got back to the producer, the premiums atrophied.”

For the farmers, according to Watts, it simply comes down to a desire for more money for their coffee, access to credit, access to a secure supply chain, and an increase of transparency. But in the case of some certification models, those promises aren’t always met.  “All of those things are being address in those models; some put the emphasis on price, some on farm management,” Watts explained, “Too often it all sounds good. Producers get into these programs, but they don’t see a lot of return. They’re spending money to get certified, but they don’t earn their money back.”

“That’s not to say that the certification world is a bunch of hooligans – I don’t believe that.”

There had to be a better way.

You could hear the frustration in Watt’s voice as he recalled the experience. “I felt disgruntled. We were promising consumers something and the more time I spent at the origin, the more I began to feel it wasn’t all it could be.” So Watts and the Intelligentsia team began building a new model

“It became a belief on how coffee production should be done and turned into protocols and shaped over the next 5 years into what it is [today].” It’s now a scalable model where Intelligenstia has direct influence over the quality of the product and ultimately ensure that everyone got what they needed in the business transaction.

THE START OF A NEW MODEL

To be clear, Watts supports Fair Trade to an extent.  “I’ve seen plenty of instances of [Fair Trade] having a positive impact.” But he was still driven to seek out his own program to meet the exacting needs of Intelligenstia.

After tasting a farmer’s coffee in the office of a local purchaser, Watts was intrigued enough to want to see the farm. After being impressed by the farm’s operations, he spent the next two days working on creating a three-year deal to import this farmer’s coffee to Chicago.

The farmer was thrilled to meet someone who shared the same goals because he had wanted to produce better coffee. But for farmers, it’s a risk. To produce higher quality coffee cherries, you need to pay closer attention to your trees, hire more employees. As with all products, higher quality costs more and the economics rarely make it possible for farmers to do this.

Most producers default to the lowest amount of production costs to produce the most amount of coffee. It’s not that producers don’t understand or don’t want to,” Watts said, “It’s just that it doesn’t work out economically. It’s just that there’s no guarantee that they’ll get that back.  They don’t have control on where their coffee gets sold and for how much. They have to gamble essentially.”

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The writer is the editor of CitizenPolity.com —  You can contact him at JamesERatcitizenpolitydotcom or follow him on Twitter:http://twitter.com/jepsteinreeves

Copyright 2009 – CitizenPolity & James Epstein-Reeves – Not to be used without the written permission of CitizenPolity or the author.

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