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Hate the Game, Not the Players: In Defense of ‘Cause Coffee’

Creative Commons photo by Dennis Tang.

Creative Commons photo by Dennis Tang.

by Nora Burkey

There has been plenty written lately, here and elsewhere, on the positive impact of coffee certifications. Conversely, much has been written about the limitations and perceived failures of certifications. But one point of attack I can personally no longer withstand is the idea that coffee companies, on the whole, should be shamed for marketing their good deeds.

It may be true that some roasters embellish claims about the direct good they contribute through sustainability initiatives and ethical trade practices, but here’s the situation as I see it: Either companies roast coffee and choose to market it in part based on a good cause, or they roast coffee and market it while supporting no cause. Either way, both companies are a part of the same profit-driven system in which “cause coffee” is a marketable commodity.

Companies can inflate or even fabricate claims of good work, and often, the more marketable a good deed, the more other companies will be compelled to “sell” their own causes. The bigger the company, the easier this becomes. But let’s get one point clear: Attacking a coffee company because of the cause is misguided.

(related: What is Direct Trade, Really? A Question for Coffee Consumers and Roasters Alike)

For example, take a large coffee corporation that is driven primarily by the bottom line, but which, by public pressure or through its own corporate goals manages to align some of its operations with a certification agency like Fair Trade or Rainforest Alliance. While that corporation’s sustainability footprint, so to speak, may still be negative, criticizing the company for marketing its sustainability efforts only serves to diminish the cause. Too often I hear people within the coffee industry criticizing the little good that is being accomplished by a cause-based initiative, larger than criticizing the larger trade systems at play that benefit large corporations and threaten supply sustainability for us all.

So, if cause coffee makes you uneasy because you perceive flaws in the current certification systems, but your alternative is simply not having a cause and not working in any way to transform economic trade policy, I’m not sure this conversation is for you.

‘Cause Coffee’ as Response to the Free Market

Gavin Fridell’s “Alternative Trade: Legacies for the Future,” is an excellent examination of the impact of free trade, as well as several alternative trade models. He spends a lot of time helping us understand the rise and fall of the International Coffee Agreement (ICA), paying special attention to its specific successes and failures. He writes, “In 1962, formal talks were convened by the United Nations under the terms of the Havana Charter involving all the world’s major coffee producing and consuming countries to develop a strictly enforced, multilateral agreement to regulate global coffee supply.”

(related: Evaluating the Impact of Fair Trade USA’s FT4All Program)

The ICA regulated prices as well as supply of coffee, imposing quotas on how much coffee a country could export. One problem with commodity agreements is that they have to be renegotiated and resigned, so during periods of economic boom, countries tend to let them lapse, believing they can make more money from the free market. But once a bust hits, as it inevitably will, they scramble to reinstate quota systems. The same thinking can be applied to Fair Trade: Even if market prices rise above Fair Trade minimums, how will farmers be protected when the eventual bust happens?

One of the biggest challenges with Fair trade is that it is a consumer-driven, non-state, opt-in initiative. Fridell writes, “The ICA had a significant impact on millions of farmers and, despite several shortcomings and ‘imperfections,’ generally provided consistently higher and more stable coffee bean prices than was the case either before or after its decades of operation. In particular, laudable non-state initiatives like fair trade coffee certification have not been able to match the ICA’s historical breadth or reach. The ICA system was able to create conventional bean prices that were equal to and in some years twice as high as what is today considered the “fair trade” price, and the ICA reached all of the world’s coffee farmer families, whereas fair trade certification currently reaches only around 3 percent.”

(related: Direct Trade Myths and Why Some Farmers Can’t Afford to Care About Quality)

Bruce Wydick, a professor of economics and international studies at the University of San Francisco, recently wrote what is in my opinion a poorly considered critique of Fair trade for the Huffington Post, essentially lambasting the certification for not ending poverty, as if the coffee trade alone were the sole reason billions of people live on less than $1 a day. He claims, “Perhaps a main reason that fair-trade [sic.] coffee continues to have credibility with many in the general population is the immense marketing campaign undertaken by Fair Trade USA, which continues to promote itself despite the self-neutralizing flaws in its poorly designed system.”

Wydick may be confusing the issue. Of course, Fair Trade USA has a marketing budget. Without it, the organization would cease to exist. But that budget pales in comparison to the collective budgets of the thousands of coffee companies marketing Fair Trade coffee as part of their own cause. The Fair Trade system may indeed have its flaws, but most people in coffee would agree that the absence of Fair Trade, along with any number of third-party certification systems, would generally do more harm than good to supply sustainability, environmental sustainability, humanitarian efforts, or whatever the certification’s end goals may be. Again, it is reasonable to criticize the harm being done, but not the relativity of the good.

The Role of Consumers

The economic reality the vast majority of coffee growers live with is dictated by free trade and a global market in which concepts like social and economic equity do not apply. Import controls, tariffs, levies, quotas, and other regulations designed to protect domestic industry and enhance export industry in producing countries are necessary for international trade, but they are not necessarily designed to protect individuals working within the chain. Cause coffee, whatever the cause, responds to this economic reality by calling on consumers to do the “right” thing.

(related: Consumer Group Fair World Project Rates the Buying Practices of 19 U.S. Roasters)

Recently established Toms Roasting Co., for example, relies on consumers in order to supply clean water to coffee-producing countries. Rainforest Alliance asks consumers to help make sure the planet is reasonably taken care of. These are just two large players in the much larger cause game that relies on the active participation of consumers.

Wydick writes that, “If coffee drinkers want to improve the environment, they should pay for it themselves, not impose added costs on impoverished coffee growers.” I don’t necessarily agree with the either/or structure here, but it is true that coffee growers are often not capable of developing their own communities or bettering their farm operations with the money they make from coffee. This is not just true of Fair trade coffee farmers, it is true of a vast majority of farmers.

As Wydick rightly points out, if we want to protect the environment, create more access to safe drinking water, or create any number of positive changes for the people who produce coffee, we need to do that on top of the price of coffee. I say if a company wants to do those good deeds on their own, or partner with a third-party organization working on the ground, even if that organization’s system is flawed, let them market their efforts. If a system that, at its core, attempts to do something good for the world is broken, is the appropriate response just to throw the system away, as Wydick might suggest? Should we not instead attempt to make all of these efforts more transparent, efficient and responsive?

(related: Nespresso Says It Will Invest $554 Million In Sustainability Over Next Six Years)

When I lived and worked in Cambodia, I witnessed first-hand Toms distributing shoes, and I can say the giveaway itself was flawed. That said, some simple fixes came to mind — the system warranted a conversation, not a complete termination. It wasn’t Toms’ cause that was the problem, it was merely some flaws in execution. This is why I think we ought to defend cause coffee for the time being: It is what we’ve got under the iron grip of free trade, and it can be made better.

To have an effect on poverty in a widespread and meaningful way, trade policy must change. This is one reason I support a return to some amended form of the commodity agreement, but I won’t sit around in the meantime. The situation is not either/or. For those of us interested in change, we can support the existing organizations doing something, anything, to improve supply sustainability.

Comment

7 Comments

Jamie Padilla

Nora, I always read your contributions here and this one is my favorite. While it’s important to remain critical about what works, what doesn’t, and why, publicly denouncing initiatives that we know are making a positive impact is counter productive if you care about the issues they’re attempting to address. It’s like throwing the baby out with the bath water. Thank you for your thoughtful contribution and I look forward to your next one 🙂

Cheers,
Jamie

chris

Nicely done!

I’ve one quibble: “It wasn’t Toms’ cause that was the problem, it was merely some flaws in execution.” I haven’t looked into the Toms case at all so am not commenting on that, rather that in my experience flaws in execution (as in the many, many failed development projects that litter the planet) are not “merely” implementation mistakes, they often betray big flaws in concept too. I think the certification movement has underlying it a fundamentally flawed concept (that the market is a mechanism that can redistribute wealth along a value chain; it can’t absent concerted action by states to make it work that way) so in the long run it cannot achieve what it wants. I agree with you that we need some form of ICA, not just for coffee but for agricultural trade in general, nevertheless in the meantime certifications and similar initiatives like direct trade are certainly much better better than nothing.

Nora Burkey

I agree with you that certification’s underlying flaw is the idea that the market can solve any of these issues. Evidence suggests it can’t. But I also don’t think the free market is going anywhere, so as a result of that I choose to support players who are doing the small good they can do within the free market, while also supporting more long-term change to trade. We need short-term and long-term goals. Toms gets a bad rep for sure. Shoes are likely not the thing most needed in the world, but their one-for-one idea is not the worst to raise money for a cause. The cause can always get better, be more responsive, be better monitored, etc. But without a good money-making scheme, even non-profits and aid organizations can do nothing. Government organizations work in the coffee lands too. Marketable coffee causes can only supplement such projects. Or companies can give nothing, their choice. Until we change trade policy, of course 🙂

greg

Tom’s is a perfect example of what happens when consumers get lazy and outsource their charitable giving to third parties. You lose transparency and accountability. You also lose market efficiency by introducing yet another middleman and chartering a shoe retailer with aid distribution.

Malian

Dear Nora,

this is a great article. I just want to point out that “Free Trade” is actually a misnomer. Very often these agreements are made under duress or bribery towards the governments who partner with the US. The people – specifically indigenous farmers, in many cases – are then subjugated violently using weapons obtained from the USA. That is why Central American moms are putting their kids on trains to the US, because the conditions have devolved so much due to violence that the USA perpetuates in service to corporate interests. That seems like the opposite of “free” to me. http://www.amazon.com/The-Secret-History-American-Empire/dp/0452289572

Kevin Knox

While I appreciate the compassionate intentions behind this article, it embodies a lot of the wrong-headed thinking about coffee and aid that Bruce Wydick’s excellent article was written in reponse to.

Ms. Burkey, you say:

“here’s the situation as I see it: Either companies roast coffee and choose to market it in part based on a good cause, or they roast coffee and market it while supporting no cause.”

Imagine if for coffee we substitute “wine” or “craft beer” or any other delicious beverage and you quickly see just how ridiculous this approach to marketing coffee is. Many of the world’s best winemakers (e.g. Chateau Beaucastel, Marcel Chapoutier) are not just organic but biodynamic but what they talk about on the bottle and in their marketing is terroir, deliciousness, care, taste, pleasure. THAT is how a mature industry markets its products, and that is how today’s leading roasters, from Stumptown to Counter Culture to Blue Bottle, talk about coffee. They also are very open about paying up for quality and striving for transparency both in the cup and in their trade practices.

That’s an entirely different world than “cause” marketing of coffee as practiced by the likes of Tom’s, Green Mountain and many others. Publicly-traded corporations are prohibited by law from putting supplier welfare, the environment or any other cause ahead of profit in their decision making, so by definition cause marketing is greenwashing and obfuscation. Greg’s comment in this thread summarized the situation exactly: ” a perfect example of what happens when consumers get lazy and outsource their charitable giving to third parties.” Jerry Mander provides an excellent summary of exactly why “corporate responsability” is structurally impossible in his “11 Inherent Rules of Corporate Behavior,” which can be read here:

http://dieoff.org/page12.htm

Fair Trade and other certifications are marketing programs, not means of discovering price or promoting quality. There is nothing “consumer driven” about them. The ICA was a real trade program with teeth, and in my view the industry as a whole really needs to focus on large scale agreements of this kind rather than cause marketing, which has proven itself ineffective in doing anything except squandering money and discouraging consumption of coffee altogether.

Dan Cox

Nora Burkey’s article Hate the Game, Not the Players mentions that the coffee trading system seemed to be better at providing coffee farmers with improved prices during the years the International Coffee Agreement was in effect. She mentions that the ICA (International Coffee Agreement) controlled prices and the supply of coffee by way of a quota system. ABSOLUTEY not true! The ICA was signed by both consuming and producing countries and the quota system, along with fees associated with each bag of coffee exported, was the key provision. Prices were never discussed, as that would be collusion, and no one could agree on prices anyway. Each coffee country has a different cost of doing business and thus there was no minimum wage and coffee workers are still paid by the piece or the pound picked. Quotas, meaning how many bags a producing country could ship to another member country, were instituted and from the get-go they were a bone of contention. Small producers felt at the mercy of large producers and could be left literally holding the bag; they could not ship beyond their quota to member countries. The idea was that supply would affect demand which would in turn affect price. Theoretically true, but not in practice.

The system came to a tumbling halt because everyone cheated. First, producers would project huge crops so their quotas would be increased. Secondly, any excess coffee that was not sold to a member country could be sold to a nonmember country at a lower price! This meant if you were a consuming county in the club a ICO member, (international Coffee Organization) it could cost you MORE to buy coffee from a producing member. This was blatantly unfair and eventually the US dropped out because of this injustice. The fact is that the US paid the highest dues of all members and got tired of all the fighting and eventually just quit.
Without a support system in place, it was every country for itself and each producer made the deal that was in their own self interest. All coffee grown was sold, but prices plummeted as consuming countries squeezed producers. This situation created a fifteen year financial disaster for producers and a windfall for roasters.

So the answer to Nora’s question is multilayered. Are producers better today in a totally free market system which may also encompass various certification programs, or is it better for the producers to be in some kind of quota system like the old ICA? As a capitalist and free market cheerleader, my first rally is for the free enterprise market to thrive. The consumer is always right and will buy what they need. However, at what cost to the producer? Maybe there is another way of buying/selling coffee which encourages risk and free market enterprise but also has a degree of economic safety for the producer.

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