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From Fair Trade to direct trade: Costa Rican coffee farmers band together to net more profits

"The Common Cup" Roastery in Santa Elena, Monteverde

Near the heart of the small town of Santa Elena, Costa Rica, visitors may find themselves following an aromatic scent of freshly roasted coffee beans to The Common Cup Community Coffee House and Roastery.

Located within the tourist-sought region of Monteverde, The Common Cup is one of many roasteries in the area that pride themselves on practicing sustainable farming.

But The Common Cup is unlike others in one important way: the owners do not believe in Fair Trade, a system aimed at justly compensating farmers for their harvest. It is a marketing campaign and certification process that many other coffee farmers in Costa Rica rely on to sell their coffee.

According to globalexchange.org, 72,942 farmers in Costa Rica grow coffee.  Among these, 45,000 belong to cooperatives.

Cooperativa de Café, a secondary level service co-operative, is the only Fair Trade Certified co-op in the Monteverde area. Cooperativa de Café represents 3,500 Costa Rican farmers by bringing their coffee together to receive better bargaining prices for their harvest. Because these farms are inspected by Fair Trade labeling organizations, farmers must follow universally mandated health, safety and environmental regulations.  These regulations are more strict than the basic regulations corporate coffee companies must follow. The result is Fair Trade coffee being sold at a higher market value. Consumers justify this extra expense as the price to pay for conscious consumption.

But some farmers still find Fair Trade regulations to be insufficient.

"Cafe con leche," coffee with milk, purchased at The Common Cup. According to a radio interview with Ken Lander, co-operatives are instrumental for farmers in the share of profits with the value chain, as well as disengaging corporate companies. However, this is still not enough.

They want not only health, safety and environmental regulations to be set, but also a greater share of profits for their harvest.  This is why roasteries such as The Common Cup are part of something with even greater expectations than that of Fair Trade coffee growers.

Instead of being part of this Fair Trade system, The Common Cup is part of the San Rafael Sustainable Coffee Initiative (SRSCI), a different kind of cooperative whose goal is to provide coffee consumers the opportunity to have a direct purchasing relationship with the farmer, without the need for a middle-man.

According to Heyner Varela, a coffee roaster at The Common Cup, this relationship is sustained by keeping the initiative small. The SRSCI focuses on micro-exportation by refusing to expand the cooperative into shipping members’ coffee to businesses or to retail stores.

In addition, SRSCI claims that by eliminating the middle-men and using micro-loans to pay for harvesting, farmers are able to make more than six times the net profit than they would under Fair Trade.

Varela shared the story of one member farm, Finca Santa Marta, that used to be part of a Fair-Trade cooperative over four years ago. Finca Santa Marta owners left the co-op after the coffee market fell, in fear of losing their farm. According to Varela, the farmers do not believe in Fair Trade largely because of the misconception of Fair Trade’s standards.

Heyner Varela describes the roasting process at Common Cup Roastery.

¨People are thinking they are helping the farmers in Costa Rica, in Honduras, but they (the farmers) aren’t making money,” Varela said.

In a radio interview with Radiotherapy, SRSCI founder Ken Lander explains that this farmer’s initiative “was born out of necessity… it was born out of a need, a social economic need, that is becoming prevalent all over Costa Rica, in that even the Fair Trade concept of farmers getting a fair price for their coffee under that system is not sufficient for a farmer to live anymore.” For Lander, the initiative is “completely about the farmer.”

According to the SRSCI website, the net profit of some farmers in Costa Rica is 39 cents for one pound of coffee sold in today’s value chain.  This same pound of coffee not only makes approximately 50 cups, but each cup of coffee can also reach up to $5 a cup at retail value in the United States. This net profit is not enough for farmers to sustain a lifestyle by solely producing coffee.

After leaving the cooperative, the Santa Marta farm has been able to make 18 times more profit roasting and selling the coffee on its own, Varela said.

If Fair Trade standards cannot guarantee reasonable trade values to coffee farmers, Varela suggests that consumers interested in helping buy directly from the farmer.

For those who need their daily caffeine fix and drink coffee on a regular basis, online purchasing has made it possible for consumers to buy their favorite roasts with little to no effort.

For more information about the Initiative’s farmers and their sustainable practices, click here.

Photos by Annie Mercer.


One thought on “From Fair Trade to direct trade: Costa Rican coffee farmers band together to net more profits

  1. Congratulations SRSCI and Common Cup. Well done!

    Posted by Forrest Graves | July 26, 2011, 10:19 am

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