One of the most satisfying aspects of my work is sitting down with farm families and trying to solve a problem creatively. During my last visit to Peru, we were having a discussion with CODEMU (the Women’s Development Council) on how to insure effective participation of the women in the Oro Verde coop’s decision making. Everybody who sells Fair Trade coffee puts gender equity, etc. in their literature, but there are lots of nitty gritty reasons why women don’t fully participate, even though Fair Trade rules require it. One reason is that most of the women have kids, and as every working mom (and dad!) who is reading this knows, it is impossible to participate in a meeting when you’ve got an infant in need of a change or a two and three year old falling down, spilling a drink or crying at the injustice of the sharing impaired. (I remember once when I was a lawyer/stay at home dad I had a three way international call going on while I tried to change Sarah’s diaper- okay, just the tip of the iceberg!).

We came up with the idea of creating a day care program during assemblies, committee meetings and other gatherings of the coop. Now this may seem pretty straightforward up here, but it is not common at all in rural coffee village settings. According to Melba, the head of CODEMU, the social expectation there is that a woman will take care of the kids while doing everything else at the same time, even if it means not being able to stay in a meeting or stay focused. As a result, women are rarely effective participants in these meetings, which determine the nuts and bolts policies and practices that control their economic lives.

We co-created and funded a program to bring in day care providers, toys and a safe space for young children at the Oro Verde headquarters in Lamas. After six months, we found that it was helpful but not great – the women were having trouble finding skilled caretakers who were available for short gigs. As we analyzed the problem, it became clear that the issue was that the coop was only looking for degree-holding social workers or psychologists for daycare, as there is a knee-jerk reaction in many Latin American communities for degrees, hierarchy and licenses.  I suggested getting a list of responsible sixteen and seventeen year olds who could provide short- term oversight and care and who would love to make the money (read: slightly older babysitters!). Although this was a new concept in this rural area, Melba and the women of CODEMU thought it might work. The big annual meeting is coming up in April, so we will see how it works.

Small steps, shared ideas, a little help from your friends. That is how we build community around the coffee world.

Every time I visit a coffee village I hear the same question: why is the price of coffee to us farmers so low? Why is there no relation between the costs of production and a reasonable (if any) profit and the price we get for our beans? These questions apply to 99% of the coffee in the world, fortunately not ours. But here is the answer, from my perch atop a waterfall in northern Peru:

In New York City, half an earth away  from the coffeelands, a room full of overcaffeinated young men (who’d probably never heard of Yirgacheffe or Atsabe) are shouting themselves hoarse bidding down the lifeblood of rural coffee farmers. In the middle of this room is the circular trading floor of the New York Board of Trade (NYBOT), known to its denizens as “The Ring.” Here, investment houses, banks, financial speculators and large coffee companies bid on the future price of coffee. For the companies, the goal is to insure a future supply at a known price – a necessary planning tool for a business based on an agricultural commodity. But for the rest of the frenzied traders the point is to make a profit on the “float” between what they pay for coffee futures and what they hope to sell them for later. For two centuries, coffee had been a dull commodity, traded on a somnambulant market. Yet somewhere in the last decade, it had morphed from a morning brew into a raging speculative commodity on the trading floor.

In this wired world, these Lords of the Ring are supplied with up-to-the-minute financial, political, meteorological and other data from an army of consultants. An early frost in Brazil? The flowers necessary for the budding coffee fruit to develop could wither and die, shrinking the coming harvest. Supply down, price up; bid two cents more for March deliveries. A rumored peace deal in Colombia? Easier deliveries in three months; hold off and let the price drop. The rumors and intelligence are translated into Buy and Sell orders, little slips of paper carried across the floor by the Runners, the traders-in-training. Their street clothes covered in tunics carrying the colors of their houses, the Runners grab the slips from the phone and computer banks owned by the Lords and race them down to their warriors in the Ring, who scream out their offers to buy for a penny more or sell for a penny less. These players make the prices rise and fall in an incestuous system unrelated to the true cost of growing and processing the crop, and with no consideration at all for the needs of the growers to feed their families and keep their kids in school. As one trader told me:

“Traders are not guys with moral fiber when it comes to the conditions of the farmer’s lives. We’re seeing money and we’re making money."

It always amazes (and angers) me that when the market price determined by the Lords of the Ring goes up, roasters and retailers are quick to raise their prices to the consumer. “We have to charge the replacement value of the coffee” one broker told me. But when the world prices go down, these same brokers and buyers never drop their prices.

To me, Fair Trade is not just a formula to keep the price at a level sufficient for the farmers to rely on to improve their lives, it is a deeper commitment to social change that challenges the basic assumptions about the market and the human relations that lie beneath the surface.

While I sat above that waterfall, the market price dropped below 60 cents per pound - the price it costs a farmer to grow and harvest the coffee. From that day forward, each pound produced would drive the farmer who grew it deeper into debt and bewildered despair. For half a decade to come, farm families would suffer malnutrition and infant mortality would soar. At the same time, corporate profits were about to rise to historic heights, as the Lords of the Ring made their killing.

Most people think that Fair Trade is just about a minimum price guaranteed to the farmers. That is a critical piece of the system, but Fair Trade provides many powerful tools for social change – something that no other label or system offers. One of the most significant is the requirement that farmers organize into democratic and transparent cooperatives.

In order to understand what this is about, it is necessary to appreciate why Fair Trade was founded in the first place. In the coffee world, the vast majority of farmers are small scale and indigenous. That means they have little access to information about prices, how the market operates, the needs of northern buyers, access to credit and more. They may not even speak their own national language, but rather their indigenous language. Therefore, they need middlemen to either provide the services for them or buy their coffee outright as cherries picked earlier that day. Since most are physically far removed from the major population or processing centers, they also have to rely on middlemen to get their coffee out of the mountains and into the stream of commerce. As you can see, they are not effective participants in the world market (even though economic models assume that they are), and are at a terrible disadvantage in trying to get a good price for their products.

By organizing into cooperatives, the farmers have the joint buying power to get better prices for farm inputs, they have joint processing power and a greater ability to get information about current prices and market conditions. They get to vote and have a real say (often for the first time in their lives) on the things that impact their families’ health and well-being. The requirement of transparency means that for the first time in their lives they know what they are getting, how much goes into the coop’s coffers, how much everyone else is getting and they can see the impact of the cooperative on their personal and joint bottom lines. Further, the coops provide valuable and often nonexistent social services, such as loans and health care (or at least money to obtain care).

Fair trade coops often pool their premiums together to have a powerful joint impact on their communities. This may take the form of building wells and schools (and believe me, most farming communities are in desperate need of both!) such as we have seen and participated in in Nicaragua, Ethiopia, Peru and elsewhere. Often, it takes the form of purchasing and building upstream capacity – that’s biz talk for buying the plants that process, grade, package and export their beans, thereby keeping that entire income stream in the local community, not giving it away to layers of middlemen. In Ethiopia, our Oromia partners have even created a national bank that takes deposits from non-members, makes low cost loans to members and has creatively diversified the income of the coop.

These are the unique, important and largely unknown benefits of cooperation in the coffeelands, and tens of thousands of farming families have gained better lives as a result. These are the reasons why we have focused on cooperatives and will continue to do so.

For World Food Day 2009 (which is tomorrow, October 16th!), Link TV is helping to promote a campaign called Stand Up, Take Action, a movement now four years in the running. As part of the framework for the UN Millennium Development Goals adopted by global leaders in the year 2000, worldwide hunger and poverty must be eradicated by the year 2015. A lofty endeavor, you say? Maybe. But millions of global citizens are demanding that this promise be kept, or at the very least, kept a priority. Each year, through events organized by Stand Up, Take Action, attention is called to this ongoing issue, and the movement is growing. Last year, it broke its own Guinness World Record for the largest mobilization around a single cause in recorded history. Click here for events taking place this weekend in your area.

Watch this video and join the countdown to World Food Day!



Link TV has a lot of great food and hunger related programming, that can be found on our ISSUE: Food page, like a new Michael Pollan special called “Deep Agriculture”, and more. Also, learn about the coffee industry and Fair Trade practices that are effecting small farmers in poor countries around the world from Dean Cycon, Founder and CEO of Dean’s Beans.