Demystifying the true role of Fairtrade in the coffee trade

Demystifying the true role of Fairtrade in the coffee trade

You may have wondered about how Fairtrade works. Where is the money really going? What concrete actions is Fairtrade taking to help coffee producers? These questions are legitimate, and we'll try to answer them here!

When a product carries the Fairtrade Mark, it means the producers and traders have met the Fairtrade Standards. More precisely, the Fairtrade Standards are “designed to address the imbalance of power in trading relationships, unstable markets and the injustices of conventional trade.”

What is fair trade?

Fair trade is an alternative to conventional trade. In fact, it relies on collaboration between producers and consumers. Thanks to Fairtrade certified purchases made by consumers, coffee producers benefit from substantial income enabling them to improve their living conditions. In short, a percentage of the sales of their coffee goes directly to them, which allows them to improve the yield and quality of their production, while allowing you to enjoy sustainable coffee!

“By choosing Fairtrade coffee you’re supporting more than 750,000 coffee farmers to thrive in an unstable market by earning a decent income, protecting their local environment, and investing in their farms and communities.” - Fairtrade Canada

How do farmers get money?

With Fairtrade Minimum Price

Fairtrade guarantees a minimum price of US $ 1.40 / lb for the purchase of coffee. Certified coffee growers therefore make sure to sell their coffee at a higher fixed price if the market price is too low. If the market price is higher than the minimum price, members will get the higher price. For farmers, the minimum price serves as a safety net against price instability, as the price of coffee can fluctuate every three minutes! Thanks to better price stability, producers are able to better cover their production costs.

Fairtrade is the only global sustainability certification that guarantees a Minimum Price for coffee.

With Fairtrade Premium

This is extra money paid to co-ops, which they can use as they see fit. The premium, equivalent to US $ 20 / lb, is paid in addition to the price of the coffee. So we can say unequivocally that every bag counts!

Thanks to this amount, members are able to invest in projects that are close to their heart, such as the construction of various infrastructures for education or health, the acquisition of new, more efficient tools, or even better access to clean water.

Coffee growers may also receive an Organic Differential (if the coffee is organic) of US 30 ¢ / lb to help them keep their coffee production organic.

In short, the cooperative receives the Minimum Price + the Premium + the Organic Differential (depending on the coffee produced). The graph below illustrates how Fairtrade succeeds in providing a more decent and fair wage to coffee producers. To find out more about the concrete projects that can be put in place with the various amounts donated by Fairtrade, check out our blog article on the initiatives of the inhabitants of Sumatra Island!

Fairtrade Canada license fees

In order to maintain complete transparency, be aware that Café William must also pay a certain amount for Fairtrade license fees. These are costs associated with the use of the mark on the bags, and these are based on the sale of Fairtrade coffees in the market. License rights are invested in projects such as market development, consumer education and awareness, funding of producer networks, etc

What does this change concretely for producers

  • Products sold at a fair price, for a fairer salary
  • Investments in projects essential to the well-being of their community
  • Better sustainable agricultural practices
  • Greater participation of women through Fairtrade equity programs

What that changes for you

  • You help break the cycle of poverty in coffee producing countries
  • You allow producers to flourish socially, environmentally and economically
  • You invest in the sustainability of the coffee culture, increasingly neglected by young people
  • You are making a real difference in the lives of the 125 million people who depend on the sale of coffee for their livelihood

Every time you drink a cup of Fairtrade certified coffee****, you can be sure that the farmer who grew the beans is getting a fair deal****.

Be part of the movement! See how YOU can make a difference.

Café William it’s...

  • The purchase of 10.943 megatons of Fairtrade certified green coffee (2008-2020)
  • US $ 4.8 million in Fairtrade Premium (2008-2020)
  • US $ 7 million in biological differential (2008-2020)
  • Over 65 million cups of fair trade coffee in 2019

Watch Olga’s story and immerse yourself in the not always easy life of a coffee farmer.

« Fairtrade allows us to make a living from the culture of coffee. They support us, the producers, and allow us to prosper. »

- Olga Alvarado, coffee producer, COAQUIL (Honduras).

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