First and foremost, I want to thank you for your commitment to Fair Trade. As you know, our goal is to provide more long-term impact to farmers, workers and the environment by empower-ing businesses and consumers to make every purchase mat-ter. This 2010 coffee review outlines a variety of life-changing projects—completed and in process—that contribute to that goal and that were made possible through our partnership. Before you read on, I would to like share some perspective on 2010 as well as introduce some of the ways that Fair Trade is prepared to help you achieve your business goals.
We’ve weathered a tough year together—the effects of the high C, resulting defaults and now in 2011 a Fairtrade Inter-national price increase. While the market continues to be volatile, through your continued support of Fair Trade, you have provided a safety net for farmers with minimum prices that help cover the growing costs of sustainable production. We also see changing weather patterns affecting quality and yields, but through the new five-cent premiums earmarked for quality and yield improvements, you support a foundation for the future.
Amidst these and other challenges, we know that we can and must do more to bring more impact to more people in more coffee farming communities around the world. We must also strengthen cooperatives and work to secure your supply of high-quality Fair Trade Certified™ coffee.
Letter from the President and CEO
Sincerely,
Paul Rice
President & CEO
To get started, we’ve built a great team in coffee business development and organized a team of internal experts to focus on supply chain services. This team will work together to help us innovate and seek new opportunities to support the needs of our partners. That process will start with listening and understanding your business objectives and discussing how Fair Trade coffee can help you achieve your specific goals. Looking ahead, we’re excited about the opportunities before us, including new efforts to secure sustainable supply chains and to generate substantial impact for even more people in coffee farming communities around the world. You’ll learn more about those efforts in the following pages. We look for-ward to working with you in the months and years to come.
Increasing Quality Supply
08 Supporting Sustainable Futures
10
Responsible Sourcing Partnership
12 Building Business Capacity in Kenya
Improving Lives
13 Price and Premium Support Communities
15 Producer Profiles: Every Project Matters
Protecting the Environment
20 Environmental Standards
22 Sustainable Sourcing Partnership
Accelerating the Momentum
23 Strengthening Cooperatives and
Building a Reputation for Quality
Appendix
24 Fair Trade Principles
25 Frequently Asked Questions
26 Services and Funding
“Fair Trade is about so much
more than price. Fair Trade is
a comprehensive approach to
sustainable development that
supports farmers with quality
improvement, environmental
stewardship, business capacity
training, access to credit, and
community development funds
to help improve lives.”
– Paul Rice, President and CEO
Over the years, we’ve created a strong association between Fair Trade and better prices for farmers. Most of us remember the 1999-2005 global coffee crisis when prices slumped to historic lows and farmers struggled to survive. Fair Trade helped over a million farmers put food on the table during that crisis. But in today’s high “C” market, it’s only natural to ask if Fair Trade is still relevant.
It is, of course, because Fair Trade is about so much more than price. Fair Trade is a comprehensive approach to sustainable development that supports farmers with quality improvement, environmental stewardship, business capacity training, access to credit, and community development funds to help improve lives. Consumers are increasingly looking for the credibility of third-party certification to provide assurance that their coffee has been ethically and sustainably sourced. Below is a brief illustration of these powerful aspects of the Fair Trade model.
Community Development
A core benefit of Fair Trade is the development premium that buyers are required to pay to certified farmers. This premium goes directly back to farming communities to invest in education, health care, clean water, job training, microloans and other social services not provided by local governments. Over time, these development premiums have an enormous impact on the quality of life in these communities. Since 1998, Fair Trade certification has helped the U.S. coffee industry deliver nearly $45 million in premiums to hardworking coffee farmers, including $11 million in 2010 alone.
And while individual farmers may be temporarily better off in a high “C” market, farming communities still struggle with everything from food scarcity to inadequate access to education, health care, and other basic services that Fair Trade community development premiums fund. To address these challenges, Fairtrade International (FLO) raised the community development premium for coffee from $0.10 to $0.20 per pound, effective April 1, 2011, doubling the amount that the cooperatives are able to reinvest into their communities.
Market Access
Market access and supply chain stability are core objectives of Fair Trade. We constantly recruit, train and certify new producer groups, expanding benefits to more farming communities each year. Between 2008 and 2010, the number of Fair Trade coffee producer groups exporting to the U.S. has grown, from 151 to 194. In 2010, 322 producer groups exported coffee to the global market.
Market access is a two-way street: importers and roasters frequently enlist our support to help them identify and partner with high-quality Fair Trade farmers in particular origins. And to strengthen long-term commercial relationships, several NGO partners in our global community have developed management training programs to help cooperative managers develop the business acumen to reliably and consistently supply roasters with the high-quality coffee they demand.
Quality Training
In the U.S. market, the Fair Trade movement has aligned closely with the specialty coffee industry to help cooperative farmers raise the quality of their coffees. Our organization, for example, has managed or funded quality improvement training programs at origin for the last decade. We are particularly proud of our Brazilian program which, in partnership with the U.S. Agency for International
Development and an NGO called SEBRAE-MG, has invested over $2 million in infrastructure, training and technical assistance to help nearly 6,000 farmers from Sao Paulo, Minas Gerais and Espirito Santo. Participating farmers have learned to improve the quality of their beans, which has enabled them to negotiate better prices and long-term stable contracts, and generate more Fair Trade premiums to invest in their communities. Our program’s annual coffee cupping competition has sparked tremendous enthusiasm and pride among the Brazilian cooperatives and their members while creating important new commercial opportunities in the specialty coffee industry for these communities.
The quantifiable results of this program are highlighted on page 10 of this report.
In a high-price market, farmers may be tempted to cut corners to maximize yields and income. Fair Trade encourages farmers to take a long-term approach to agriculture, embracing sustainable practices that conserve natural resources. Our rigorous environmental standards protect water resources and adjacent forests, restrict the use of hazardous pesticides and other agrochemicals, promote organic farming, and help reduce carbon emissions that lead to climate change. Farmers must comply with environmental core standards to get certified and then implement progress requirements overtime in order to get recertified.
Access to Credit
Expanding access to affordable credit is fundamental to the Fair Trade movement. Without adequate access to credit, farmers are more vulnerable to middlemen and cooperatives are unable to compete effectively with larger traders. Financial partners such as Root Capital, Shared Interest, responsAbility, Progresso Fund, Rabobank Rural Fund and other friendly social lenders are an extremely important part of the Fair Trade system. They are working with cooperatives in Kenya, Sumatra, Guatemala, Colombia, Nicaragua and many other coffee regions to bring both short-term commercial credit and long-term investment capital to resource-constrained communities. Last year, we estimate that these financial intermediaries and our partner coffee importers extended over $30 million in credit and pre-financing to Fair Trade cooperatives around the world.
Many believe that Fair Trade is relevant in today’s business climate. According to a 2010 Globescan study, consumers continue to have high expectations of companies dealing with the developing world: 83 percent say companies should apply internationally-accepted labor and environmental standards and 80 percent say companies should contribute to community development. For companies making claims about social sustainability, it’s important to note that more than half of U.S. consumers see third-party certification as the best way to verify those claims.
Today, more than one third of Americans are familiar with Fair Trade, of which about half buy Fair Trade Certified prod-ucts. In Europe, where the movement has been around since the 1950s, those numbers are much higher. At the end of the day, the relevance and future of Fair Trade lies in the hands of the consumer. For those of us in the global coffee community who aspire to a sustainable future for hardworking farmers, U.S. businesses and the planet, our best hope lies in our collaborative efforts to awaken the sleeping giant—the American consumer—to the power we have to change the world by making every purchase matter, including our daily cups of coffee.
Highlighting the Numbers
Source: Fair Trade USA
Percent of Fair Trade Certified Coffee Imported into
the United States by Country of Origin
For the second straight year, more than 100 million pounds of Fair Trade Certified™ coffee was imported into the United States
in a single year. And to date, over half a billion pounds of Fair Trade Certified coffee has been imported into the United States. Once again, Peru stands out as the leader in Fair Trade Certified coffee imports into the United States with 23 percent of the total volume in 2010. Combined with Nicaragua and Colombia, this amounts to half of the total imports.
Imports of Fair Trade Certified Coffee into the
United States, Organic versus Conventional
Fair Trade Certified™ organic coffee experienced greater growth than conventional coffee in 2010. In fact, organic coffee grew from 47 percent to 62 percent of the total import volume in 2010, amounting to over 65 million pounds.
imports of fair Trade Certified Coffee into the United States, organic versus Conventional, 1998–2010
Source: Fair Trade USA
0
20
40
60
80
100
120
1999
2000
2001
1998
2002
2003
2004
2005
2006
2007
2008
2009
2010
Vo
lume
(in Millions of P
ounds)
Organic
Conventional
“Overall we found the range
of quality for these Fair Trade
coffees quite impressive. In fact,
as our reviews suggest, Fair
Trade has managed to grow
without leaving anyone behind.”
– Ken Davids, Coffeereview.com
Fair Trade plays a key role in providing training and education to help producers to improve the quality of their coffee so they can be competitive in complex, international markets.
Investing in Quality
In an effort to support continuous improvement of coffee quality by Fair Trade farmers, $0.05 out of the $0.20 premium must be invested in quality improvement programs at the farm and/or cooperative level. These quality investments are verified during each cooperative’s Fair Trade inspection. In addition, the organic differential was increased from $0.20 to $0.30 per pound to encourage more organic production and sustainable farming.
Every Project Matters Highlights
Impact and Promotes Quality
In 2011, Fair Trade USA inaugurated a new effort to highlight the benefits of Fair Trade in coffee growing regions. Entitled “Every Project Matters,” cooperatives were invited to share their impact stories. The most compelling stories of environmental sustainability and education, among other categories, were featured at the SCAA Annual Conference. As an incentive for participating, we offered to submit top samples from the cooperatives to the Coffee Quality Institute (CQI) for complimentary CQI “Q Grades.” Exposure to the CQI process helps cooperative members understand the value of a high cupping score and, ultimately, the role that higher quality coffee plays in securing a more sustainable future through better prices.
In June, Fair Trade USA submitted four samples to CQI. We are proud to announce that two—from cooperatives in Ethiopia and Peru—were awarded scores above 84. A third sample from Costa Rica received a respected 81 and the fourth sample score is still pending.
Fair Trade Cooperative Wins Rwanda
Cup of Excellence
More than a decade after the genocide, Rwandan farmers still struggle to earn a decent living. In 2007, Fair Trade USA partnered with Stichting Het Groene Woudt, a leading Dutch foundation, to empower seven cooperatives that support more than 100,000 people, to build thriving international coffee enterprises and link to the U.S. market. The three-year program helped the cooperative members develop their organizational capacity, strengthen internal transparency and democratic governance, and improve their management skills. These cooperatives then invested in improving their cof-fee quality by building new cupping labs and learned how to cup from international experts. As a result, cooperative partici-pants from COOPAC won the 2010 Rwanda Cup of Excellence. They also constructed water recycling systems and implement-ed low-water milling machinery to rimplement-educe their environmental impact. And through our market linkage program, Fair Trade USA was able to introduce the cooperatives to new buyers in the United States and Europe who were eager to buy their higher quality coffees. Buyers were so eager that during the 3 year partnership export increased from 39,683 pounds in 2007 to an incredible 751,781 pounds in 2010.
In Rwanda, Fair Trade certification has translated into schools, clean water wells, and long-term economic security.
“In Africa, it’s very difficult for
villagers to attend school, but
since these cooperatives became
Fair Trade, the majority of
members, over 90 percent, can
send their children to school.”
– Christine Condo, Executive Director of the Rwanda Economic Development Initiative
The year2010 marks the close of the three-year Responsible Sourcing Partnership (RSP) project, an innovative public-private partnership that linked Brazilian coffee farmers with mass-market coffee consumers in the United States through Fair Trade. To achieve this noble mission, the RSP project connected small rural producers with the global market by:
With a total of US $2 million in cash and in-kind contributions from the U.S. Agency for International Development (USAID), Fair Trade USA, Walmart and SEBRAE-Minas Gerais, the RSP project provided technical training and investment in farm and cooperative infrastructure to benefit more than 5,700 small-holder farmers in Brazil. At the end of the project, farm-ers and cooperatives gained the advanced skills necessary to meet market demand for high volumes of Fair Trade Certified™
coffee, and eventually turned out 118,136 hectares of sustain-able farmland under production. Not only did the program enable significant and lasting advances in Brazilian specialty coffee, it also led to a 167 percent increase in sales of Fair Trade Certified product.
Quality
The project worked with cooperatives to upgrade processing methods and infrastructure in order to increase the production of high-quality coffee.
Participating cooperatives increased the quality of their cof-fee through in-depth agronomist trainings and education in harvest and post-harvest best practices, which helped them to overcome the development of coffee defects in the produc-tion process. Members also participated in organic agriculture to further develop their skills in its specialty production, and had the opportunity to learn about the impact that processing
The Responsible Sourcing Partnership Celebrates
Advances in Brazilian Specialty Coffee
best practices can have on the quality of the final product. The project also carried out trainings in quality evaluation to help producers judge their coffees’ value and continue coffee quality improvements.
In addition to trainings in best practices, cooperatives also had the opportunity to apply for grants to improve infrastruc-ture. Producer groups had the ability to purchase equipment such as drying patios, which make high-quality production achievable.
Producer Capacity
Cooperatives increased their productivity by strengthening their business administration and cooperative development skills.
During the project, cooperatives developed their basic knowledge of business accounting and supply management through trainings designed to cater to the individual needs of each cooperative, helping them to develop as competitive businesses. With additional training in community outreach and access to publicity materials, partners helped new groups gain certification while also driving membership increases at existing cooperatives.
Responsible Sourcing Project
•
Expanding and improving the quality
of their supply
•
Increasing producer business and
production capacity
•
Enhancing the marketing abilities of
Brazilian coffee growers
Marketing Capacity
Cooperatives increased their marketing capacity by leveraging their marketing power, participating in media trainings, and developing their unique story.
RSP project partners harnessed their combined marketing power to raise consumer awareness of Brazilian Fair Trade Certified™ Coffee. The partners hosted events such as the Fair
Trade Cupping Competition, which increased buyers’ aware-ness of coffee quality through media coverage in both the Unites States and Brazil, while also enabling and preparing producers to participate in international events such as the Specialty Coffee Competition of America.
“Fair Trade has greatly benefited our group. We have grown as an
organization. Today, members are consistently present in assembly
meetings, united and committed to addressing challenges and
obstacles. The agronomists, trained during the project, brought
knowledge and technical assistance that enabled higher quality
and sustainable coffee production. The hiring of a sales manager
allowed the Association to more efficiently enter into a new, larger
and more dynamic coffee market.”
– Producer Member of Cooperativa dos Produtores de Café Especial de Boa Esperanca
Equipment Purchased with
Infrastructure Grant Money
•
80 drying patios
•
21 hulling machines
•
2 mobile processing units
•
1 cupping lab
•
1 sorting machine
Producers further developed their presence by learning about ways to use Facebook, Twitter and blogs to build business relationships and to reach their buyer audience. Organizations discovered how to use their cooperative’s story as a unique tool while expanding their reach through online and printed materials in order to share their coffee with more people around the world.
The conclusion of the RSP project marks the beginning of a new Brazilian initiative - the Sustainable Sourcing Partner-ship. This project aims to promote biodiversity, conservation, and environmental education among Brazil’s coffee
growing communities. See page 22 for more details on the new partnership. 0 50 100 150 200 250 Baseline
End of the R SP project
Building Business Capacity in Kenya
In 2011, Fair Trade USA successfully completed a pilot prgram with the Grassroots Business Fund. The goal of this program was to positively impact the livelihoods of small-holder coffee farmers in Kenya by improving the capacity of coffee cooperatives in two ways:
“I can’t believe that we lived
without this information.”
–David M. Kayengu, General Manager Kaliluni Farmers Cooperative Society
Capacity Building
•
Facilitating the acquisition of
eco-processing equipment that improves
coffee quality at reduced costs with fewer
resources
•
Providing technical assistance to improve
the cooperatives business management
capabilities
The pilot program focused on two coffee cooperatives to ensure that the desired results were achieved in preparation to expand the program to other cooperatives in a cost effective manner. Fair Trade USA hired local service providers, from the Fair Trade Organization of Kenya (FTOK), to implement the program. The model of using local service provision is beneficial in several ways. Local service provision creates expertise at the local level, fosters strong relationships between local NGO’s and the cooperatives, provides low-cost service provision, and builds reliable access for buyers to Kenyan coffee cooperatives through a trusted entity like Fair Traders of Kenya.
In total, the two cooperatives received 12 days of training each, that focused on financial management, improving computer literacy, debt servicing management, and Fair Trade standards and norms. In addition to the trainings, each cooperative now has access to a help desk which provides cooperatives with on-going support. The success of the pilot program has led to a second grant, given directly from the Grassroots Business Fund to FTOK, that will offer these workshops to four more coffee cooperatives in Kenya.
The Fair Trade price and premium offer a unique development approach, which guarantees financial investment in community development. Fair Trade premiums for coffee are set at $0.20 per pound of coffee sold, and U.S. partners paid $11 million in Fair Trade premiums to support community development projects in 2010. Below are examples of projects that Fair Trade producers implemented with premium funds.
U.S. partners paid $11 million in Fair Trade premiums to fund community development projects in 2010.
1 2 3 5 6 9 10 11 12 7 8 4 1 COOPETARRAzú Costa Rica
Every Project Matters
Sustainabality workshops for highschoolers
2 UCA SAn JUAn
nicaragua
A new office building
3 HUATUSCO
Mexico
Supplies for health clinics, scholarships, vaccinations 4 COAGRICSAL Honduras School books 5 CECAnOR Peru
Every Project Matters
Women’s leadership trainings
6 PROnOVA
Brazil
Every Project Matters
Cupping competition, sustainable coffee program, quality
improvement 7 nARAnJILLO Peru Increase yields 8 ASPROCAFE InGRUMA Colombia Organic certification 9 OROMIA Ethiopia
Every Project Matters
Flour mills for villages, new schools, bridges
10 ABAkUnDA kAWA
Rwanda
Washing station, roads
11 PERMATA GAyO
Indonesia
Paved roads, communal farming equipment, microcredit for women
12 TUnAS InDAH
Indonesia
Source: Fair Trade USA 0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 1999 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fair Trade Premium Payments to Producer Organizations
$44.7 million in Fair Trade premium dollars paid to farmers from 1998 - 2010.
Since 1998, nearly $45 million in Fair Trade premium dollarshave gone back to coffee producers. In 2010 alone, $11 million in Fair Trade coffee premiums were delivered. In response to the increasing costs of coffee production, Fairtrade International (FLO) raised the community development premium, effective April 1st, 2011, from $0.10 to $0.20 per pound, doubling the amount that the cooperatives are able to reinvest into their communities. Fair Trade Certified™ coffee
guarantees the Fair Trade premium of an additional $0.20 per pound of green coffee to be paid to producer organizations towards developing community, education, environmental and productivity projects.
The Fair Trade minimum price, established by Fair Trade standards, covers the cost of sustainable production and offers
the farmers more income stability no matter how much the market fluctuates; in the last 10 years swinging from $0.53 per pound in 2002 to a high of $2.40 by the end of December 2010. While market prices have been high in recent years, a guaranteed floor price provides income stability to allow farmers and their organizations the ability to benefit from the upswing in commodity markets.
Fair Trade buyers pay at least the “C” market price when it exceeds the Fair Trade minimum floor price of $1.40 per pound for conventional coffee and a required organic mium. Buyers also pay $0.20 per pound as a Fair Trade pre-mium, $0.05 of which must be invested in quality and yield improvements.
Central de Servicios Cafetaleros del Nor Oriente (CECANOR) is a cooperative of coffee farmers from the Lambayeque region of Peru. Established in 1999 as a partnership between three regional cooperatives, CECANOR strives to receive a higher profit margin through Fair Trade and direct sales to international markets. Since its inception, the cooperative has been committed to quality production, environmental preservation and community development. Twenty percent of the cooperative’s members are women, and a woman represents the cooperative on Peru’s National Coffee Board. The single-origin coffees grown by CECANOR’s women farmers helps them fight against poverty and abuse.
Although women play a
fundamental role in all aspects of coffee production, cultural stigmas have forced women to accept work in the most labor-intensive phases of the harvest because they are excluded from mechanized and skilled agriculture work, often receiving piece rates (instead of wages) far below those of men. In response to this problem, CECANOR organized several events in 2003 that would revolutionize the farming culture by enhancing leadership among women farmers. In 2004, with a profound sense of value and representation, and the premium funds earned through Fair Trade, the women of CECANOR founded Café Femenino, the first women-grown brand of single-origin coffee from Peru. The project launched to include women coffee farmers in the decision-making process of the business and to increase their representation within all aspects of coffee production.
Through the Café Femenino program, CECANOR has also improved access to micro-financing loans, which provide assistance to women farmers who are trying to expand farmland, buy new equipment or participate in trainings. In addition to economic stability, women farmers have access to health and diet programs, leadership seminars and social services for abused women. The husbands of these extraordinary women have become increasingly supportive and have started to promote the participation of women in the organization. Fair Trade USA congratulates CECANOR for enriching the lives of families and providing opportunities for young girls to aspire to be great leaders in farming and business.
Cecanor, Peru
FLO ID
885
Total Members
1,600
Varieties
Typical,
Caturra, Borbon
About the Organization
Women’s Empowerment
About the Organization
Gikanda Farmer’s Cooperative Society LTD is nestled under-neath Mount Kenya in the central region of the East African nation. In this fertile region, subsistence farming communi-ties earn their living growing sweet bananas, macadamia nuts, watermelons, tomatoes and the region’s most profitable commodity, coffee. Kenyans often refer to this valuable crop as “black gold,” for its worth has produced wealth for families since the 1950s despite being a colonized nation.
Many communities were becoming prosperous growing cof-fee until 1999, when massive overproduction resulted in the crash of the coffee market. During the crisis, Gikanda’s founder Johnson Kafue was desperately seeking reasonable prices for their coffee. For years, Kafue, along with the hundreds of coffee farmers who made up Gikanda, were very unsure of their ability to earn a living growing coffee. Finally, after six years of struggling with volatile market prices, Kafue led the cooperative to gain Fair Trade certification. Since that time the cooperative has enjoyed sustainable prices and connections to socially responsible, international buyers.
Individual Cooperative Members
Today, 100% of Gikanda’s coffee is sold as Fair Trade Certified™
and its members are determined to thrive, increasing pro-duction and rejuvenating their communities with Fair Trade funded projects. For instance, many schools in the area were once in horrible condition-they had dirt floors full of holes and infested with bugs and only rusted iron sheeting protected students from rain. The conditions of some schools were so ghastly that many parents were forced to withdraw their chil-dren from their studies.
Gikanda’s operations manager, Wanjohi, attended such a school in the 1950’s: Gatundu Primary. He recalls studying in a classroom made of flimsy, metal sheeting with broken blackboards and no floors. The school teacher would com-plain every time she had to use the blackboard because she had to stand on a rock to reach an unbroken space to write. But a few years ago, the farmers of Gikanda decided they’d had enough. They decided to invest Fair Trade premi-ums in renovations that veritably transformed the Gatundu Primary School. Now Wanjohi’s daughter Damaris is enrolled at Gatundu and the differences are enormous. In addition to building a brand new school with cement floors, brick walls and desks, Gikanda also covered the costs to add a second-ary school section for students who would otherwise have to travel very far to continue their education. Additional funds were used to convert an existing classroom into a laboratory, allowing the children in the community to have access to competitive science education. The impact of this investment is felt throughout the community. And fifty years later, Wanjohi need only look to his third-grade daughter to see the differ-ence and know that he played a part in creating a better life for them all.
Gikanda Farmer’s Cooperative
Society LTD, Kenya
FLO ID
4551
Total Members
2,700
Producer Profile: Every Project Matters
About the Organization
Tucked away in the mountainous coffee region of Espirito Santo, the second largest coffee producing state in Brazil, lies the PRONOVA Cooperative of Coffee Growers of the Mountains of Espirito Santo. PRONOVA was founded in 1989 to promote the sustainable production of high-quality coffee, offering technical guidance and assistance to the family-based farming communities of Espiritu Santo. True to its mission, PRONOVA has become a high-quality Arabica pioneer in a region primarily dominated by Robusta (non-specialty) coffee production.
PRONOVA has continuously implemented new ways to invest in quality and productive capacity building, starting a tradi-tion of innovatradi-tion that has been seminal to the organizatradi-tion’s development. PRONOVA now plays an important role in pro-moting high-quality coffee production, not only to members of the cooperative but to other growers in the region.
Quality Improvement
In 1998, PRONOVA implemented its most notable project: the Sustainability Program for Coffee from the Mountains of Espiritu Santo. The ongoing program consists of process evaluations and technical improvements. A significant stride in quality was made through this program when studies showed the ripe coffee cherry to be of excellent quality, but that the current processing method and climate were causing taste issues. As a result, PRONOVA effectively increased their
Pronova, Brazil
FLO ID
3542
Total Members
229
Varieties
Catuaí Catucaí
New World, Iapar
coffee value by implementing a new pulping method, thus retaining the ripe cherry’s excellent quality through the fruit processing stage.
By 1999 the results were significant, earning PRONOVA members international recognition at Illy Coffee’s National Competition for Espresso. Moreover, PRONOVA’s assessment and quality improvement initiatives started a technical revolution among coffee growers of Espiritu Santo. Today, PRONOVA hosts Arabica cupping competitions in the state to promote technical exchange and overall quality improvements.
PRONOVA continues its quality improvements through a myriad of initiatives including moisture tracking, soil analysis, technical assistance, and sustainable management. PRONOVA obtained Fair Trade certification in 2005, adding a quality of life and environmental responsibility dimension to their product. Fair Trade USA commends the PRONOVA Cooperative of Coffee Growers of the Mountains of Espirito Santo for collectively cultivating a top-quality profile for the region’s coffee while implementing new sustainable farming programs.
About the Organization
In 1998, thousands of Ethiopian coffee farmers were robbed of their annual harvests. Traders, who traditionally visited farming villages to purchase their annual harvests, paid farmers with what are now notoriously known as “dry” checks – false promises of payment that Ethiopian banks refused to honor when farmers tried to cash them. The year’s harvest for an entire community of farmers was veritably stolen and the coffee growers received no income for a full year’s work.
In 1999, in the midst of this horrendous crisis, Oromia Coffee Farmers Cooperative Union (OCFCU) was established to help farmers commercialize their products through more just trade relationships. The cooperative became Fair Trade in 2002 in order to negotiate better prices and to help improve the living standards of its members. Boasting over 180,080 coffee grow-ing households, Oromia is one of the largest coffee coopera-tives in the world. Through their hard work and incredible efforts, Oromia now exports six varieties of coffee directly to the specialty market and offers numerous social programs to support small farmers.
Community Development
Oromia’s has dedicated significant efforts to address the rampant poverty and lack of resources that plague many farming communities in the coffee-growing regions of Ethiopia. Recounting all of Oromia’s successes in community development through Fair Trade premiums would fill a hefty
volume. The issues in the community were numerous, but so have been the solutions implemented by Oromia. Farmers voted to use Fair Trade premiums to implement a wide variety of programs: from providing clean water to better access to schools, to building bridges and flour-mills for the community. The once disease-infested water pools have been substituted with water wells that provide potable, malaria-free drinking water to the community. Women growing cereals for
supplementary incomes used to walk up to 20 miles to reach the nearest flour mill; Oromia has constructed five flour mills within the community to address what was once a heavy burden for women in the region.
Children used to walk two hours to and from school; and as a result, many dropped out because there was not enough time left to do homework or help their parents. Oromia has expanded and built several local elementary schools and added high school programs to existing schools. Now children are staying in school and even adults are returning to complete their education.
Oromia members are proud of their work and achievements; they are a true example of community resilience and cooperation. Fair Trade USA recognizes Oromia for their incredible work towards resolving pressing social issues through far-reaching community development projects.
Oromia Coffee Farmer’s
Cooperative Union, Ethiopia
FLO ID
897
Total Members
180,080
Varieties
Yirgacheffe, Sidamo
Limu, Jimma, Harrar, Nekemte
Producer Profile: Every Project Matters
About the Organization
CoopeTarrazú is a coffee farming cooperative located in the central mountains of San Marcos de Tarrazú, which is perhaps the most famous coffee-growing region in Costa Rica. In 2005, the organization achieved Fair Trade certification, centralizing all industrial and commercial activities to environmentally sustainable practices that would simultaneously increase the quality of their coffee and the quality of life for the
community. CoopeTarrazú is the vanguard of environmentally sustainable practices in coffee production.
Environmental Sustainability
In 2006, CoopeTarrazú established the Coffee Culture Quality of Life Sustainability Plan to track their environmental impact, implement better practices, and create a culture of environ-mental respect among members and children. Using the Fair Trade premium, CoopeTarrazú has developed a program that provides trainings, capacity building, and environmental leadership to its members. The key to their program is their focus on raising awareness of ecosystems through a strong educational curriculum for both adults and children.
Through the Quality of Life Sustainability Plan, CoopeTarrazú provides free soil analyses to its members. Traditionally, farm-ers use the same fertilizfarm-ers as their neighbors; but, customized soil analyses show farmers the impact of topography and the ecosystem in the quality of their farm’s soil. Farmers in turn learn to adjust their inputs according to their specific soil needs. Youth in the community participate in the process of environmental impact research and development by tracking bird and insect populations, learning about the important role they play in coffee production and ecosystem maintenance. As board member William Naranjo Barrantes says, “Before, my son never used gloves while he worked. But through the program he learned to protect himself while applying any agricultural inputs. For that I am so glad.”
The organization’s significant efforts to fundamentally change the way their community members consider and treat the en-vironment has had incredible effects not just for farmers but for their children as well. Fair Trade USA recognizes CoopeTarrazú for their profound commitment to conserving the health of the environment, managing waste and their conscious consump-tion of natural resources.
CoopeTarrazú
FLO ID
3273
Total Members
2,600
Varieties
Catuaí Catucaí
New World,Iapars
Environmental Standards
“Thanks to Fair Trade I have received
capacity building trainings on organic
production and now I am committed
to maintaining a method of production
that will protect and sustain the
environment.”
– Ramón Rojas Runco, Cooperativa Agraria Industrial Naranjillo LTDa, Peru
In order to improve producer’s living and working conditions, their environment must also be clean and healthy. Strong environmental standards are therefore integral to Fair Trade. Only products that meet strict international environmental standards earn the right to display the Fair Trade Certified™
label. These standards support our mission to foster increased social and economic stability, leading to stronger communities and better stewardship of the planet.
Environmental Stewardship
An estimated 30% of producer organiztions
invest a portion of their Fair Trade premiums for
community development in environmental
initiatives.
In order to obtain Fair Trade certification, producer organizations are required to adhere to core Fair Trade environmental standards. Additionally, they must assess the environmental impacts of members’ operations, develop plans designed to mitigate those impacts and monitor the implementation of those plans. Through this environmental impact assessment, organizations are encouraged to progress toward higher standards and to increase their sustainable production.
Soil and Water
Biodiversity and
Carbon Emission
GMO’s
Agrochemicals
Pests and Waste
- Enhance soil by applying sustainable irrigation practices, such as crop rotation
- Source water sustainably and reduce water use over time
STanDaRD CORE REqUIREMEnT
- Report current benefits to ecosystems and current methods of carbon emission
reductions
- Report new methods to improve biodiversity or limit carbon output
- May choose to focus on specific targets by incorporating goals into a
development plan
- Prohibit use of GMO’s
- No selling, using or distributing of any prohibited materials
- Handle and store all agrochemicals safely
- Avoid aerial spraying over rivers and other water
- Control pests in a safe and sustainable way
- Farmers educated on the use of approved pesticides
- Alternatives to chemical pest control must be explored
High Standards = High Quality
By adhering to strict Fair Trade standards, farmers are not only able to make great strides in environmental sustainability, but also in the quality of their products. With the Fair Trade premium for community investment, farmers can spend more time and money on things like environmental education, training, quality testing and equipment efficiency. Through the development of sustainable growing and harvesting practices, quality crops are produced at no cost to our fragile ecosystems, and often receive a much higher price in both mainstream and specialty markets.
Fair Trade and Organic
While Fair Trade certification does not require organic certification, it does support organic farming with training for producers and a higher price incentive for organic products. Many producers invest their Fair Trade premium funds in organic certification, which has led to outstanding results: 62 percent of all Fair Trade imports into the United States are also organic.In truth, Fair Trade and organic
certifications are not in competition, they are complementary. While Fair Trade certification does go a step further to require adherence to additional social and economic standards, holding dual certification shows a profound commitment to environmental responsibility, and reveals visible progress towards achievement of all Fair Trade standards. Ultimately, reaching for these standards encourages the production of goods that benefit you, farming communities and the earth.
Approximately 50% of all Fair
Trade producer organizations
worldwide hold organic
certificates
Brazil: Minas Gerais, Espirito Santo, Sao Paulo
The Sustainable Sourcing Partnership is a public-private partnership between the U.S. Agency for International Development (USAID), Green Mountain Coffee®, and FairTrade USA that aims to promote biodiversity, conservation, and environmental education among Brazil’s coffee growing communities.
The SSP project provides activities, training and technical assistance organized around three targeted outcomes:
•
Increasing the Brazilian hectarage under cultivation according to Fair Trade’s environmental standards•
Strengthening the ability of Brazilian small-holder farmers to produce organic-certified coffees for export to the U.S. marketplace•
Building local capacity for more sustainable agronomy With contributions of $200,000 from both USAID and Green Mountain Coffee, the 2010-2012 SSP project funds training, targeted consultations, technical support and market support for a growing population of Fair Trade Certified coffee producer groups, currently representing 30,000 members of small-holder farming families.Sustainable Sourcing
Project activities
• Fair Trade environmental standards training
• Brazilian environmental law training
• New producer organization outreach
• Certification support
• Training on minimal successful application
of inputs
• Creation and improvement of
environmental plans
• GPS training
• Mapping member farms and reserve land
• Reserve land management consultation
• Risk management training
Fair Trade USA is working to link industry and NGO partners around the world to strengthen small-holder farmer cooperative organizations through a variety of capacity building programs. And we’re accelerating efforts to build our reputation for high-quality coffee and grow your Fair Trade sales.
Strengthening Small Farmer Cooperatives
In partnership with other NGO’s and industry partners, Fair Trade USA has invested more than $2 million over the last five years in several coffee quality, market access,business capacity and bio-diversity initiatives in Africa and Latin America. Based on both the success of these initial programs, as well as on feedback from producer and industry partners, Fair Trade USA is in the process of creating a cooperative capacity building initiative, called Co-op Link, that will enable more development projects, particularly in coffee growing communities of high importance to the U.S. market.
Initial Co-op Link programs include:
•
Improving cooperative capacity and business acumen through training in risk management, productivity, quality and other areas. Risk management training has already been completed in Africa and many Latin America countries, with additional 2011 trainings being planned for Colombia, Honduras and Indonesia.•
A new strategic partnership with the Global Coffee Quality Research Initiative to support small farmer organizations in the face of climate change (details below)•
Linking more cooperatives and buyers by creating a database of producer information including available supply, leveraging the SCAA forum to create direct connections between buyers and sellers, and hosting buyers at origin.•
Engaging other NGO’s to provide additional services to cooperative organizations.We have also started negotiations with various global banking organizations to increase the amount of pre-harvest financing available to cooperatives as well as long-term capital for infrastructure loans. As the program develops and grows, you can anticipate further communications regarding new opportunities and results.
new Partnership with Global Coffee Quality
Research Initiative
Fair Trade USA, along with our industry partners, recognizes that agricultural communities in the developing world are struggling with changing weather patterns that can cause poor quality beans and low-yielding harvests. To support coffee producers and our industry partners, Fair Trade USA has entered a new partnership with the Global Coffee Quality Research Initiative to provide industry-leading research on quality and yields in the face of climate change.
First Ever, System-wide Fair Trade Cupping
Competition
Fair Trade USA will conduct our first ever “Fair Trade Cupping Competition” to showcase certified coffees from around the world. Building on Brazil Cupping Competition experience, the event will provide producers with a forum to present their coffees to a diverse, well-respected panel of industry judges, building Fair Trade’s reputation for high-quality coffee and introducing U.S. buyers to available supply.
Every Purchase Matters
The Fair Trade USA marketing strategy is to persuade more consumers to buy Fair Trade by increasing awareness, understanding and distribution because that’s how we benefit more farming families—through your sales of Fair Trade Certified products. To achieve this goal, we’ve launched the Every Purchase Matters brand campaign. The ongoing effort features consumer facing activities as well as further research to further optimize the effectiveness of the program. Activities include:
•
New, simplified messaging based on extensive consumer research.•
More integrated, amplified marketing campaigns to increase consumer awareness.•
Testing in a variety of retail environments to understand the role that marketing, pricing and distribution play in consumer purchasing behavior.As we bring this campaign to life, we look forward to introducing activities to help empower consumers to make a difference through their everyday purchases. That effort is already underway! Now available to you are simpler, more persuasive point-of-sale materials on FairTradeUSA.org. The materials are free, so please use, share and proliferate these materials in the marketplace.
Fair Trade Principles
Guaranteed Prices and Community
Development Funds
Fair Trade’s unique commitment to specific, pre-established prices and community development premiums distinguishes the Fair Trade Certified™ mark from other sustainability labels.
Farmer groups are paid a price that covers the cost of sustain-able production, a premium for community selected develop-ment projects and an additional price premium for certified organic crops. This empowers farmers with equal negotiating power, while still encouraging them to improve quality in order to negotiate even better prices.
Access to Credit
Buyers are required to offer commercial credit to farmers upon request, either directly or in collaboration with financial intermediaries. Access to timely credit on favorable terms secures supply chains by allowing farmer organizations to increase export capacity and invest in product quality.
Democracy and Transparency
Empowerment is an essential component of building sustainable communities, and therefore of Fair Trade. Small-holder farmers form cooperatives that allow them to process and export their harvests competitively. Both farmers and farm workers form councils to transparently and democratically manage community development funds. These organizations are audited annually for transparency, democratic processes and sound financial management.
Fair Trade standards provide the foundation for our sustainable development model. Both buyers and sellers of Fair Trade products agree to uphold fair and rigorous social, economic and environmental standards. The standards level the playing field for the Global South and empower businesses and consumers in the Global North to make every purchase matter. When you buy Fair Trade Certified™ products you give farmers fair prices for quality products that improve lives and protect the environment.
Each year, Fair Trade business partners improve the lives of approximately 1.2 million farming families in 70 developing countries. Here’s how…
Fair Trade Principles
• Guaranteed Prices and
Community Development Funds
• Access to Credit
• Democracy and Transparency
• Environmental Sustainability
• Child Labor, Forced Labor and
Work-Place Discrimination are Prohibited
• Community Development
Environmental Sustainability
Fair Trade standards require environmentally sustainable farming methods that protect farmers’ health and preserve ecosystems. These standards strictly prohibit the use of GMOs and the most toxic agrochemicals, promote active conservation of soil and water resources and protect surrounding forests. More than half (62 percent) of all Fair Trade imports in 2010 were also certified organic.
Child Labor, Forced Labor and Work-Place
Discrimination are Prohibited
Fair Trade farmers and workers can count on more than just better prices. Fair Trade standards require freedom of association and safe working conditions. Child labor, forced labor and discrimination are strictly prohibited. When standards are breached, we take immediate action to protect children and forced laborers to ensure fair treatment for all on the farms and factories that carry the Fair Trade mark.
Community Development
U.S. importers and manufacturers pay premiums for
community development that allow farmers and farm workers to invest in life-changing projects. These projects—from clean drinking water, school scholarships and health care services to housing, reforestation and organic certification—benefit entire towns and regions.
What is Fair Trade?
Fair Trade is a global movement to alleviate poverty in farming communities around the world in ways that are socially and environmentally sustainable.
What does it mean to be Fair Trade Certified
™?
Fair Trade certification assures consumers and businesses that the quality products they purchase improve lives and protect the environment. The Fair Trade Certified label means that a product meets the requirements of Fair Trade’s rigorous international standards for social, economic and environmental sustainability.
How does Fair Trade certification ensure that
the products I buy are fair?
Fair Trade producers undergo audits to demonstrate that they are implementing Fair Trade standards to ensure that the products consumers buy are traded in the most fair and just manner. Through adoption of Fair Trade standards, farmers strengthen their communities and take their products directly to global markets. In turn, these efforts support dramatic im-provements in income and quality of life.
Did my Fair Trade USA fees change with the
recent FLO pricing increase?
The service fees you pay to Fair Trade USA did NOT change. In fact, our overall service fees have remained the same since 1999, excluding the increase in importer fees last year. The minimum price for Fair Trade Certified coffee, as well as the Fair Trade community development premium, changed on all contracts signed after April 1, 2011. How-ever, given current high coffee market pricing we do not anticipate that the revised Fair Trade coffee minimum price will affect purchase prices for some time.
What is the average cost of sustainable
production (COSP) for Central and South
America?
The average COSP in Central and South America is be-tween $ 1.55 and $1.85/per lb. Therefore, the new minimum price of $1.40, with a $0.20 premium for community de-velopment (including $0.05 for quality and yield improve-ments) is a compromise to help both producers and industry partners.
Fair Trade USA is a nonprofit, mission-driven organization that tackles social and environmental sustainability with an innovative, entrepreneurial approach. We are the leading independent, third-party certifier of Fair Trade products in the United States, and the only U.S. member of the global Fairtrade International network.
Only products that meet strict international Fair Trade standards earn the right to display the Fair Trade Certified™
label. These standards support our mission to foster increased social and economic stability, leading to stronger communities and better stewardship of the planet. Since 1998, we have helped our industry partners in the United States to generate more than $220 million in additional income for farming communities.
As a Fair Trade industry partner, you play an essential role in our mission by offering Fair Trade Certified products to your customers and creating market opportunities for producer organizations. The U.S. market for Fair Trade Certified products is now the world’s largest, and this growth makes it possible for 1.2 million people in some of the world’s poorest countries to make sustainable, tangible improvements to their quality of life.
Services
Fair Trade USA offers a comprehensive range of services that support our industry partners efforts to source Fair Trade Certified goods, receive credible verification of responsible sourcing practices, and help hard-working men and women throughout the developing world retain more value from their crops and products.
Standards and Certification
Globally, Fair Trade sets, audits and enforces strict labor and environmental standards. In the United States, Fair Trade USA’s comprehensive internal audit program helps ensure the integrity of every product bearing the Fair Trade Certified label and provides consumers with an easily identifiable symbol of social and environmental responsibility. The international certification agency FLO-CERT has developed a global network of highly-trained field auditors who monitor cooperatives and companies to verify their compliance with strict Fair Trade social and environmental standards, as well as the investment of community
development premiums. Offering certification services in more than 70 countries, FLO-CERT became the only social certification to gain accreditation in 2008 by the International Standards Organization (ISO), based on the strength of its audit and certification processes.
Measuring and Reporting Impact
Fair Trade USA works with farmers and producerorganizations around the world to capture and summarize the impact that results from participation in Fair Trade through training and development efforts, additional income generation and premiums for community development. Throughout the year, Fair Trade shares this information directly with partners and the public through detailed impact reports and impact stories that help connect consumers with the people behind their favorite products.
U.S. Fair Trade 2010*
• Beneficiaries: 1.2 million farmers
and workers
• Producer Organizations: 330 U.S.,
878 worldwide
• Additional Income: $220 million since 1998
• Community Development Premiums:
$14 million in 2010, $56 million since 1998
• U.S. Sales: $1.2 Billion
• Products: 9,500+ in over 60,000 retail
locations
Services and Funding
Since Fair Trade USA’s founding, farmers and workers around the world have earned more than $220 million in additional income. These funds include more than $56 million in Fair Trade premiums, funds that are dedicated to the most pressing development needs in farming communities and democratically administered by the project beneficiaries themselves. Projects financed with Fair Trade premiums include housing programs, investment in sustainable farming techniques and biodiversity, schools and scholarships, health systems, women’s empowerment programs and more.
Supply Chain Development
One key ingredient necessary to grow Fair Trade’s impact is securing the supply of key ingredients for U.S. buyers. In addition to identifying new and additional sources of Fair Trade ingredients for U.S. companies, Fair Trade helps U.S. companies to identify short- and long-term needs, connect them with suppliers and importers of Fair Trade raw materials and helps their existing suppliers convert to Fair Trade. We also work with producer organizations to improve their quality and business acumen and connect them directly with U.S. buyers.
Consumer Awareness and Demand
Fair Trade USA also works to build consumer demand by creating awareness and understanding of what Fair Trade is and by getting more products in more categories on more shelves in more locations. We also offer consumer marketing research to help our partners tell the Fair Trade story; point of sale materials that illustrate the real world differences Fair Trade makes; support for farmers and industry partners at key trade shows; opportunities to leverage your marketing and PR budgets with national awareness-building and sales campaigns like World Fair Trade Day and national Fair Trade awareness month in October.
Building the Fair Trade Movement
Fair Trade USA also works with grassroots organizers, including dedicated individuals, communities of faith and national advocacy organizations such as United Students for Fair Trade, Catholic Relief Services, Lutheran World Relief and others to mobilize support for companies offering Fair Trade Certified products. In addition, we support the efforts of Fair Trade Towns USA and Fair Trade Universities, where local community leaders and governments, as well as students and administrations, have declared their support for Fair Trade products and practices to boost consumer demand and build awareness. These activities are funded through our philanthropic endeavors and serve as a significant value-add for our partners.
By securing philanthropic funding, we create a multiplier effect to make your investments in Fair Trade work harder and go farther each year. In fact, for every dollar we receive from partners, we raise an additional 43 cents from foundations, individual donors and government sources. We also receive significant sources of in-kind funding from foundations and corporations for technology, legal counsel, public relations and marketing support. For instance, in-kind SAS contributions from Salesforce.com enable us to collect and report vital certification data.
These funds also support our Research and Development activities to expand the range of services we offer our clients and the impact we can generate for producers. Philanthropic donations have created stronger sources of coffee supply in Brazil thanks to U.S. AID and Walmart; enabled Fair Trade Towns USA thanks to Green Mountain Coffee and the Green Mountain Coffee Roasters Foundation; and allowed Fair Trade to expand into new categories like sugar and apparel thanks to a number of venerable and gracious philanthropic organizations.
Impact and Awareness
Growth in general public awareness for Fair Trade
significantly increases the amount of impact going back to producers. Between 2005 and 2010, Fair Trade awareness increased four-fold, from 9 percent to 34 percent. At the same time, additional income earned by producers increased from $3 million to $56 million, respectively. We have a long way to go, but we want Fair Trade to become a household word.
How Our Funding Works
Service fees comprise the majority of Fair Trade USA’s income, approximately 75 percent of our $9 million budget in 2010. Similar to the Fair Trade model, we aim to be a sustainable social enterprise, with diversified risk through multiple funding sources, so we also seek charitable donations to augment service fees, and we regularly review our programs to ensure that all companies that want to take part in Fair Trade can do so. In 2010, our $9 million budget - $7 million in service fees and $2 million in philanthropic contributions - returned $14 million in community development premiums to farmers and workers.
