The business of morality: Peace Coffee

If you’ve ever tried to trace your food back to its origin, chances are you ran into some trouble. That’s because most food products travel long distances and go through several middlemen before landing in your typical grocery store.

Fair trade products, however, tell quite a different story, as most come more directly from the farmer to the retailer.

The Fair Trade Federation defines fair trade as a system of exchange that seeks to create greater equity and partnership in international trading systems. In practice, this can mean a couple different things.

Erik Esse, director of the Minneapolis-based Local Fair Trade Network (LFTN), said the parties involved in fair trade cooperate with each other to ensure advancement on all ends.

The three main platforms of fair trade, he said, are fairness, democracy and transparency.“This is so that, as much as possible, people can have control over their economic lives,” he said. “So that people know what’s happening and can make choices based on real information, rather than being largely based on marketing.”

In fair trade, a cooperative relationship is formed among a farmer, farm workers and the retailer. A contract stakes out a portion of the farmer’s crop to the retailer for an agreed-upon price.

“For the retailer, it means they are paying a fair price to the farmer,” Esse said. “It also means they are in a long-term relationship with that farmer. They aren’t going to drop out in the middle of the season because they found cheaper broccoli elsewhere.”

On an international level, fair trade encompasses food products such as coffee, tea, chocolate, wine, produce, clothing and crafts. Locally, fair trade consists of mostly fruit and vegetable farms, Esse said, though the LFTN would like to see that expanded to include all types of food.

Much is being done to regulate fair trade on national and local fronts. A phenomenon crucial to the movement, Esse said, is “community supported agriculture” (CSA), which creates partnerships between farmers and community supporters.

The CSA model allows consumers to purchase a portion of a farmer’s harvest at the beginning of the season and pay for it up front, Esse said. This way, the farmers get the money they need at the beginning of the season. While this allows the retailer to potentially reap the benefits of a successful harvest, it also spreads an equal portion of the risk involved.

“This exemplifies the basic principle of fair trade: share the risk,” Esse said.While CSAs often make for cheaper produce than a grocery store, fair trade products in general may cost the consumer a bit more.

“Sometimes local products or organic products might cost more than your conventional product,” Esse said, noting that the use of pesticides, poor land practices, bad worker conditions and low wages contribute to cost-savings in non-fair-trade farming. “It costs a little bit more to do things the right way.”

Shopping at local food cooperatives is a great way to further the local fair trade movement, Esse said. He listed the LFTN-member Seward, Wedge and Linden Hills co-ops as examples of companies committed to fair trade.

Java justice

Another name Esse dropped is Peace Coffee. Esse said the 12-year-old company, located at 2801 21st Ave. S., has been deeply involved in the fair trade movement on an international and local level.

Lee Wallace, director of Peace Coffee, said the company was founded as a project to prove fair trade is a viable business model. A subsidiary of the nonprofit Institute for Agriculture and Trade Policy (IATP), Peace Coffee imports coffee beans from international fair trade farmers and then roasts them and sells them to local retailers.

Peace Coffee limits their business partnerships to cooperatives — democratically organized groups of small farmers — currently located in nine countries around the globe: Sumatra, Ethiopia, Mexico, Guatemala, Colombia, Bolivia, Peru and the Dominican Republic. Each year, Peace Coffee sends its employees overseas to visit the farms, meet the farmers and inspect the harvest, Wallace said.

“Nothing replaces actually going to those places and seeing the coffee,” she said, describing a recent trip to Nicaragua during which the company’s quality control person tasted the coffee beans right off of the drying patio to find the best flavor.

The Fair Trade Labeling Organization, a worldwide overseer of international fair trade, sets a minimum price each year for which retailers must pay farmers for a pound of coffee. Last year, that price was $1.56 per pound. Peace Coffee, however, paid an average of $1.87 per pound, Wallace said, and she expects this year’s average to be even higher.

While fair trade dictates a guaranteed price minimum, despite market fluctuations, Peace Coffee takes that one step further by promising farmers the benefit of a prosperous market, Wallace said.

Much of what makes Peace Coffee’s business model beneficial for farmers is their pre-harvest finance plan. When Peace Coffee agrees to buy coffee from a farmer, they pay money up front so the farmer can purchase necessities for the upcoming harvest, such as organic fertilizer or coffee seedlings. Such a plan eliminates the one-time pay method that can cause farmers to struggle.

Environmental sustainability is yet another of Peace Coffee’s concerns. The company has two full-time delivery bicyclists who travel up to 20 miles at a time hauling trailers with up to 300 pounds of coffee. For high-volume or suburban clients, they use a bio-diesel-powered delivery van. Furthermore, all of their employees live within a four-mile radius.

If support for the local and fair trade movements doesn’t swell, Esse said, local farming communities could die off. In the future, he added, shipping food long distances will be less feasible due to a dwindling fuel supply.

“We don’t want to be too focused on the negativity of the difficulty for farm workers,” he said. “But we also want you to know it really matters if you buy that local product that’s sustainably grown.”