Fair Trade in the Coffee Industry

Paper Summary:

This paper explores the overall importance of the coffee industry to the global economy and describes how fair trade in the industry not only benefits the major players, but the international economy as a whole. It explores the history of coffee prices and how the fair trade movement which guaranteed a negotiated pre-harvest price changed the living standards for disadvantaged coffee growers and workers. The paper concludes that there is a huge disconnect between prices for coffee in the consumption market and the price paid to the coffee industry workers which results in poverty and poor economic conditions for coffee growers. Three case study analyses are included.

Table of Contents:
Introduction
Structure and History of the Coffee Industry
The Fair Trade Movement: Implications for Coffee Workers and the Global Economy
Case Study #1: Starbucks Impact on a Nations Economy: The Duality of Competition
Case Study #2: Cafedirect and KNCU - Partnership in Fair Trade
Case Study #3: Does Fair Trade Affect Quality? - Examining Coffee in Mexico
How has Fair Trade Helped Coffee Industry Workers: Tenets and Principles of Fair Trade
Fair Trade Certification Organizations: Fair Trade Labeling Organizations and International Fair Trade Standards
Conclusion: Fair Trade is Ethical Trade

From the Paper:

"Globalization is a process of enhancing collective measures to integrate economies, not only via goods and services but via governance, investment, trade, and aid (DeAngelis 2004). As globalization has progressed, it is clear that the most advanced countries have gained the most from the integration of economies; as such there is a widening gap between developed/advanced countries and developing/underdeveloped countries. Does globalization favor high-income countries to low-income countries? The coffee industry highlights a common problem with many agricultural products that are marketed within developed regions - impoverished societies characterized poor development trends with a final product that is booming in the industry. Fair trade is the only mechanism that can correct this trend. It should be clear that fair trade is not the savior of the developing region; there are many structural problems that not even free trade can bypass. However, free trade has very visible benefits that have led to changes in sectors of the society (Simmons 2003). The coffee industry has faced many historical processes that have changed the living standards of many producers in the developing region; the free trade movement has helped to create some level of equity as it aids marginalized farmers in the coffee industry."

Sample of Sources Used:

• Bacon, C. 2005. Confronting the coffee crisis: can fair trade, organic, and specialty coffees reduce small-scale farmer vulnerability in northern Nicaragua? World Development, 33, 3, 497-511. Available at http://www.ecodes.org/pages/especial/cafe/docs/bacon.pdf
• Brown, G. Making coffee good to the last drop: laying the foundation for sustainable development in the international coffee trade, Georgetown International Environment Law Review, Winter, 16, 2, 247-280. Available at http://findarticles.com/p/articles/mi_qa3970/is_200401/ai_n9353820/pg_20
• DeAngelis, A. 2004, Coffee, Mexico's other bean: an examination of the globalization of the coffee industry, its impact on Mexican villages, and the possibility of surviving the grind. Washington University Global Studies Law Review, Winter, 3, 887-907.
• "Fair Trade Trends". 2003, 2003 Report on Fair Trade Trends in the US, Canada & Pacific Rim, Fair Trade Federation. Available at http://www.fairtradefederation.org/2003_trends_report.pdf
• Groos, A. 1999, International trade and development: exploring the impact of fair trade organizations in the global economy and the law, Texas International Law Journal, 34, 3, 337-372.

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