Is Fair Trade A Farce?

[This post is part of the SUMMER JUSTICE SERIES. You can start with Part 1 here.]

Part 2: Coffee and Commies and Nazis, Oh My!

When Adolf Hitler’s name is dropped, you probably don’t immediately think of Starbucks.  Don’t worry latte lovers, I don’t have any secret demons to reveal about the top coffee establishment in the world.  You may be surprised, however, to learn the interesting tale that bridges the gap between Nazi Germany and your favorite Frappuccino. 

We’re in part 2 of a series and following some ideas by Julie Clawson, author of last year’s Everyday Justice (IVP), a book about the impact our decisions can have on folks all over the world.

You might not think of coffee as a world changer, but individuals all over the planet believe this hot commodity to actually be a consistent cause of injustice.  After pouring over some facts, I’m not so sure about that.  Regardless, we should examine what we know with open minds. 

Many right-leaning folks assume that topics like fair trade and social justice are simply machinations of the left.  Many lefties just want to find injustice everywhere they turn, so they have an excuse to tell rich people why they’re so terrible.  Either way, this issue warrants investigation.  After oil, coffee is the world’s second most valuable traded commodity. 

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Many of you have probably seen the Fair Trade label on coffee products.  The stated goal of that movement is to provide coffee farmers with a decent income for their work.  Most of these poor farmers toil in Latin America, but they didn’t always struggle to earn a decent wage.

For most of the 20th century, Western nations abided by agreements to ensure good wages for coffee farmers.  An International American Coffee Agreement (IACA) was established way back during World War II.  The fear was that if poor people weren’t paid they might turn to Nazi Germany or some other fascist group for help.  The IACA was dead by 1948, and coffee prices declined into the 1950s. 

Cold War fears of communism became all too real by 1959 when Fidel Castro took power in nearby Cuba.  By that time, African nations were also pressuring the international community for help.  JFK took office and America began backing the International Coffee Agreement (ICA), another attempt to fix prices in order to prevent instability in Third World nations that could turn to communist powers if they got desperate enough. 

The ICA had a sorted history and plenty of problems to go around yet kept prices up enough until 1989 when communism proved to be one of the worst failures in human history and the Soviet Union fell apart.  That was great news for Eastern Europeans and freedom lovers, but without any type of agreement coffee prices soon took another swan dive.  Those poor coffee farmers again faced the challenge of getting paid a fair price for their labor.

Enter Fair Trade Certified Coffee.

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The goal of Fair Trade Coffee is to ensure a good living wage by assuring a floor for coffee prices.  Think of it as coffee insurance.  The program involves other things like access to credit and more.  In the past decade, a lot of big money has gotten behind the fair trade label.  Retailers such as Starbucks, Sam’s Club, Green Mountain, McDonald’s and many more include coffee products with the guarantee to assist struggling farmers. 

The alleged moral dilemma comes in when someone tells you that if you drink coffee without a fair trade label you are actually endorsing evil practices of big companies who cheat laborers out of their profits.  If we want to alleviate the pain of some 25 million bean growers worldwide, they say, be sure to purchase the Fair Trade label.

That might be true if we knew the system worked, but critics of Fair Trade have emerged from both sides of the political spectrum.