Tuesday, March 29, 2005

a fair trade question answered

many people who have questions about fair trade coffee often wonder how much of the US$1.26 set-minimum price per pound actually returns to the farmer and his skilled, hard-working family. today we find out.

today's news story discusses organic and fair-trade farmers with the famous guatemalan co-operative farming group, "la voz que clama en el desierto" ("the voice that cries out in the desert), near lake atitlan. this group unequivocably produces some of the finest coffee in guatemala and probably the world.

so how much do these farmers get back from the base US$1.26 that goes to the co-op? US$1.10, according to the report.

this seems to imply that the co-op keeps US$0.16, or about 12.5%, perhaps not an unreasonable amount for administrative costs. however, in today's rapidly rising price environment, US$1.10 is probably substantially less than what an organic coffee of this quality would bring on the specialty spot market.

last fall, when the market just began to skyrocket, this green coffee would have cost a specialty artisan roaster (or "brownie") about US$1.80 a pound from his green broker ("greenie"). when it was last available in nyc, it cost a brownie about US$2.30.

obviously if you're a coffee farmer at this level looking at prices like these, where US$1.80 minus the greenie's markup (let's guesstimate that to be about US$0.50 in this case) and the 12.5% administration brought you US$1.10 (note that the brownie also seems to have to pay US$0.10 back to transfair, the whole system is elaborate), you're thinking, hmmm, US$2.30 minus greenie markup (let's say that's risen a bit to US$0.60), minus the 12.5% administration or about US$0.21, would get you. . .umm, maybe US$1.49 a pound?

and that extra US$0.39 a pound would go a long way when you're a tzutil mayan peasant farmer on the side of a volcano in guatemala, and who despite your obstacles has devoted yourself to growing only the finest quality java! but i hope a brownie will chime in with a comment to give more accurate current estimates. . .

oh, if you'd like to try some of the famous la voz coffee, i believe you can buy it (when it's still in stock!) from gillies, gmcr, and for home roasters, from tom at sweet marias.

final note: thank you jonathan of joe! you are the very best!

posted by fortune | 7:25 AM | top | link to this | email this: | links to this post | | 0 comments

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