of25 FAIRTRADE Years Max Havelaar from coffee till now

How it all began Impact on coffee farmers Where are we now Future of Fairtrade coffee Introduction Contents

In November 2013, the Max Havelaar Foundation celebrated its 25th anniversary. A quarter of a century ago, Fairtrade certified coffee entered the market – a world first. On November 15, 1988, the Netherlands first became acquainted with the Max Havelaar label and the idea of fair trade coffee. Since that time, the range of products bearing the Fairtrade mark has greatly expanded and there are now 28,000 Fairtrade certified products for sale.

Has Max Havelaar proved to be successful? In other words, what has the foundation – now An enthusiastic start - pg. 08 part of a global network of Fairtrade organizations – done for coffee farmers and their New thinking on development - Max Havelaar: a simple idea – Entering the market - organizations? A global Fairtrade organization

This book will answer those questions. But first, we’ll take a look at the trading Developments in the coffee market - pg. 18 circumstances that allowed for the emergence of an organization like Max Havelaar. Low prices – The coffee industry on the move - New highs and lows Next, we’ll explain what Max Havelaar started doing differently for farmers and middlemen. Finally, we’ll take a look at the future – to the challenges and opportunities facing the Max Havelaar organization. The Fairtrade model - pg. 24 Standards targeting small-scale farmers - Basic criteria: sustainable production - Organization and development – Standards for traders – At least the minimum price - The Fairtrade premium – Pre-financing of cooperatives

Fairtrade Coffee’s Reach in Figures - pg. 34

The impact of Fairtrade - pg. 42 Research - The effects for farmers and cooperatives - Earnings - Access to credit - Broadening sources of income - Productivity and quality - Organizational effectiveness - Participation - Success and self-confidence - Stay or leave? - Effects on a regional and national level - Policy Impact - Regional prices - Community development - Environmental impact

Coöperative development: two profiles - pg. 58 Prodecoop - Nicaragua - Gumutindo - Uganda

Nobel Laureate Professor Tinbergen presents the first pack of Fairtrade certified coffee to Prince Claus. Jos Brink and Arnold Fairtrade continues - pg. 64 Abbema are also present. Introduction

4 5 “Peeze doesn’t just pay attention to quality, but also to the people behind the product. Many companies have sustainability policies and labels. But we are sustainable and that makes a big difference. Something you have – you can lose that. But something you are – that never goes away.” Paul van der Hulst, Director Peeze An Enthusiastic Start New Thinking on Development

Today, anyone looking in western countries. in Prof. Jan Tinbergen at the Max Havelaar- Beginning already in the (1913-1994), a Nobel Prize stocked shelves of their 1970s, people had become winner in 1969. In addition, local supermarket almost increasingly concerned the conventional way can’t imagine that the with environmental issues, of helping developing label began just a quarter a growing scarcity of raw countries – in the form of of a century ago with the materials, the widening grants – came under fire. introduction of Fairtrade gap between rich and Opponents of this system coffee. In that time, the poor countries, and the argued that recipients of foundation’s guiding escalating power of big such grants were deprived principles reflected multinationals. Critical of their dignity and became ambitions that were a minds strove for a ‘New dependent on ‘donor good fit for the era of the International Economic countries’. Eighties. The Netherlands Order1‘ with smaller In this context, the Max had been stuck in an differences between rich Havelaar Foundation economic crisis for years and poor and more self- was founded in 1988. and younger generations reliance for developing The first turn of events had become critical of countries. They found came when development Isaías Martínez Morales: “We do not need the growing prosperity their academic equal organization Solidaridad help. We are not beggars. If you pay us a reasonable price for our coffee, we can then move forward without your help.”

The foundation’s aim is to work with the poor and oppressed in the ‘Third World’, (...). The foundation seeks to achieve this goal (...) through support initiatives which are aimed at the creation and maintenance of new socio-economic structures that will ultimately lead to an improvement in the standard of living for the people involved. The foundation’s main work is primarily focused on partnerships regarding the making of coffee, with fair payment for the coffee producers being of paramount importance. and the Mexican coffee our coffee, we can then critical Dutch government From: Statutes of the Max Havelaar Foundation, May 20, 1988 cooperative UCIRI formed move forward without your official in the West Indies a relationship. Isaías grants.” In cooperation in the novel of Eduard Martínez Morales, one with other Dutch Douwes Dekker (pen name of the leaders of UCIRI, organizations, Solidaridad Multatuli). And, naturally, articulated their motive: expanded this idea into a Jan Tinbergen became the “We do not need help. We new model for trade. They honorary chairman of the are not beggars. If you pay dubbed the initiative Max new foundation. us a reasonable price for Havelaar after the famous, An Enthusiastic Start 1 Fair trade, Frans van der Hoff and Nico Roozen (2001), p. 11. 8 9 Max Havelaar A Simple Idea

The philosophy of Max methods instituted by and coffee roaster that Havelaar was simple - and trade organizations such was willing to purchase still is. Give producers as Fair Trade Original, coffee according to these in developing countries formerly known as ‘SOS criteria was invited to join. access to the market and Wereldhandel’. SOS This is how the idea went pay them a fair price for Wereldhandel had already further afield. Farmers’ their products. This gives been offering ‘fair coffee’ organizations were also local producers financial since 1973. However, the subject to the new rules. security which then allows sale of this coffee was Only after each party in the them to invest and take limited because it was only coffee chain was verified steps in development. A sold through ‘idealistic to be in compliance with stronger economic position channels’. The coffee the new rules, could the then creates space for had to find its way to final product bear the Max social and environmental the supermarkets where Havelaar label. The label development – and consumers did their daily gave conscious consumers that helps the entire shopping. a choice and the guarantee community. It’s essential The Max Havelaar that the coffee had been that producers decide for Foundation paved the purchased from small themselves what course way for this jump to the farmers’ organizations they want to follow. Max supermarket by setting up under fair trading Havelaar built upon the trade criteria. Every trader conditions.

A Simple Development Model The label gives conscious consumers a choice Certainty and the guarantee that the coffee has been purchased from small farmers’ organizations under fair trading conditions. • Economical Investment • Social • Environmental

Development An Enthusiastic Start

10 11 Entering the Market

Both at home and abroad, Max Havelaar was seen as a new, promising form for development cooperation.

The start of the Max 600,000 coffee farmers and Though coffee roasters Havelaar label was hectic. their families.3 had their doubts, in the The purchase from the The majority of coffee world of Development Mexican farmers of roasters were skeptical of Cooperation there UCIRI could not cover all the initiative’s chances for was immediately big the coffee needed. New success. They doubted that enthusiasm about the new sources for the arabica consumers would throw initiative. Both at home and coffee beans could be a costlier pack of coffee in abroad, Max Havelaar was found in the region. But their shopping carts when seen as a new, promising the robusta bean used cheaper options were right form of development in blends had to come next to it. Initially, only a cooperation and the idea from Africa. However, for few small coffee roasters, was quickly imitated in the most part, African apart from idealistic other European countries. governments didn’t allow importers such as Fair In 1997, the new labelling organizations to buy coffee Trade Original, teamed up organizations4 jointly directly from cooperatives. with Max Havelaar. This founded an international It wasn’t until 1992 that the small group of risk takers umbrella organization supply of coffee from the was led by H. Neuteboom called Fairtrade Labelling highly-unstable Zaire (the and Simon Lévelt. In the Organizations (FLO), present Congo) could be beginning, supermarkets currently known as expanded to Tanzania and also had their doubts, but Fairtrade International Uganda. That first year, ten the power of publicity and (FI). By cooperating across farmers’ cooperatives were the continued demand borders, the organizations certified.2 And that number from consumers ultimately could soon do their jobs grew rapidly in the years to gave them no choice more efficiently. Fairtrade 2 From: Annual Report, Max Havelaar Foundation, 1989. follow. Now, Max Havelaar/ and coffee with the Max became the new term - now 3 FLO data, March 2013 Fairtrade works with 412 Havelaar label became also part of the Dutch Max 4 In 2013, there were 30 Fairtrade labelling organizations active in the world: this includes many European countries but also Japan, Canada, the farmers’ organizations widely-available in Dutch Havelaar label. United States, Australia and New Zealand. Some producer countries such

An Enthusiastic Start which comprise more than supermarkets. as Brazil, Mexico and South Africa also have a Fairtrade organization that is responsible for the marketing of the label. 12 13 A Global Fairtrade Organization

Fairtrade’s vision is a world in which all producers can enjoy secure and sustainable livelihoods, fulfill their potential and decide on their future.

Our mission is to connect disadvantaged producers and consumers, promote fairer trading conditions and empower producers to combat poverty, strengthen their position and take more control over their lives.

Fairtrade International to Fairtrade International. the businesses that then all interested parties, the started functioning as a That organization, based take ownership of the so-called ‘stakeholders’. partnership of national in Bonn, Germany, is product – are inspected Therefore, all bodies within Fairtrade labeling responsible for the general according to a fixed Fairtrade International organizations (NFOs), policy on allocating the protocol regarding their that take decisions about producers and traders. label and fixing global compliance with Fairtrade policy and standards In addition to coffee, Fairtrade standards. In standards. A separate, have a balanced ‘multi- the Fairtrade model for order to support producers, independent organization stakeholder’ composition producers could also be Fairtrade International called FLO-CERT is – all of Fairtrade applied to other products. has so-called “liaison responsible for these International’s stakeholders The number of products officers” spread over controls. This organization are represented. Producers with the Fairtrade label producer countries. The operates in accordance in Latin America, Africa steadily increased.5 Up NFOs are tasked with with the ISO65 standard for and Asia – organized into until 2000, the Max publicizing the Fairtrade certification organizations. three networks since 2012 Havelaar Foundation label and motivating other It inspects all the links – control 50% of Fairtrade was the international businesses to join to help in the coffee chain and International. The NFOs coordinator for all the label realize as much cooperates with local comprise the other half. activities in connection market growth as possible. auditors. with the production and An integral part of Fairtrade has always trade of coffee. After delivering guarantees is placed great importance that, the foundation conducting regular checks. on being transparent and

An Enthusiastic Start handed these tasks over Coffee cooperatives – and on the participation of 5 In addition to coffee, these products were cocoa, honey, tea and bananas. 14 15 “The time for fair, responsible and delicious food has arrived. And Fairtrade coffee must be a part of that. A soy latte made from fairly-produced coffee - that’s enjoyment in style with respect for people, animals and nature.” Lisette Kreischer, Veggie in Pumps and Sustainable Food Specialist Developments in the Coffee Market Low Prices Havelaar’s start. The result time, Fairtrade arabica was a huge influx of coffee and robusta were valued on the market and a drastic at the Fairtrade minimum Max Havelaar couldn’t Agreement’. The goal of all involved countries drop in international prices of $1.26 and $1.01 have started at a better that agreement was to keep participated in the system, coffee prices. Within one per pound,respectively. time. In the late 80s, there worldwide coffee prices it didn’t work the way week, prices fell 30%. The crisis cried out for a was a lot of dissatisfaction within a particular range. international policymakers This situation – too much reaction from the coffee between producer and To that purpose, the supply had hoped it would. This supply and too-low prices – industry. consumer countries about of coffee from producer led to the collapse of the persisted until 1994. Quite the functioning of the so- countries was regulated. agreement on July 4, a few coffee cooperatives called ‘International Coffee However, because not 1989 – one year after Max owe their survival during this period to the price protections offered by the Coffee Price Trends then-new Max Havelaar system. A second crisis occurred 250 around the turn of the century when higher prices in the second half of the 200 90s inspired a renewed confidence in coffee as 150 a viable commodity. Vietnam came onto the scene as a producer 100 country and market leader US Cents per Pound Brazil boosted its already- 50 high productivity even further. Again, there was an enormous increase Quite a few coffee coöperatives owe their 0 in the supply of coffee, 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 survival during this period to the price Year while demand lagged 2012 behind. Coffee prices protections offered by the then-new Market price robusta Market price arabica plummeted once more. Max Havelaar system. They fell to record lows: in October 2001, arabica beans cost less than $.45 per pound6 and robusta beans fell to a meager $.17

Developments in the Coffee Market per pound. At the same 6 About 454 grams. 18 19 The Coffee Industry on the Move New Highs and Recurring Lows

Because of the crisis of look more critically at of sustainability, both Due to an increasing traders fought to secure prices. Their quest for 2001, the supply of quality the origin of products. environmentally and shortage of good quality their supplies. Farmer competitive purchase coffee was in serious The manufacturers and socially. Also, the American coffee, world coffee cooperatives, which benefit prices, exacerbated by the danger. Many coffee government demanded Rainforest Alliance label, prices again began to from high prices but also financial crisis, led to an growers cut down their guarantees that food was which focuses mainly on rise after 2004. After the from the sustainable increased demand within coffee bushes and shifted safe and healthy. biodiversity conservation, deep dips in prices of the development of their Fairtrade for cheaper coffee their attention to other The new goal was this: the won a prominent place preceding years, prices goods, had a difficult time beans. Interest in the more crops. Some stopped production of food - from in the coffee market. The now hit extreme highs. during this period. The expensive arabica bean farming altogether and grower to consumer – must organic EKO label had While coffee harvests were prices agreed with the from Colombia decreased sought refuge in other become as transparent as already been available for partially failing in some members were put under while the demand for activities. The low prices, possible so that the whole some time on supermarket areas, demand for coffee pressure when traders Vietnamese robusta and resulting lack of process can be carefully shelves, often in grew in (new) consumer approached individual increased. money, led to less care for controlled. Growers had to combination with Fairtrade countries. Skyrocketing farmers in attempts to the coffee plants. Old trees meet precise food safety certification. prices were the result, bypass the cooperative and But once again, the weren’t replaced, pruning requirements. Suddenly, including for certified secure more coffee supply. pendulum swung the was neglected and little certification was no longer Support for sustainability coffee. In 2011, traders When farmers sold their other way and prices fell. attention was given to reserved only for Fairtrade certification is high in recorded prices of more coffee to these fair-weather The main culprit in the careful handling of the products; it had become the Netherlands. At the than $3.00 per pound. buyers, the organizations – latest dip in prices was an coffee cherries during and the new standard. end of 2010, members of like many other exporters expected mega-harvest in after the harvest. the KNVKT – the trade There was an imbalance – couldn’t fulfill their Brazil. In the summer of In the coffee sector, association for the coffee between supply and contracts. Fairtrade also 2013, prices of Arabica sunk Meanwhile in the these changes led to the and tea industry – agreed demand in the coffee suffered from these sorts of below $1.40 per pound. Netherlands, the call new certification of ‘Utz that 75% of the coffee to sector. The most sought- activities. for corporate social Kapeh’ (now known as be sold in 2015 must be after coffees became responsibility, ‘CSR’, ‘Utz Certified’) in 2004. To produced sustainably. In even harder to find. This Obviously, supermarkets grew increasingly louder. qualify for this certificate, 2012, that number had escalated competition didn’t wait around for Alarmed by a number coffee had to be responsibly already risen to 40%. in coffee countries as an increase in coffee of agricultural scandals, produced, with respect Dutch society began to to the basic requirements

Because of the crisis of 2001, the supply of quality coffee was in serious danger. Developments in the Coffee Market

20 21 “For Deen, coffee is only really delicious when it’s also fair.” Lonneke Rijkmans, Unit Manager Deen The Fairtrade Model Standards for Small Farmers

Fairtrade derives its help farmers’ organizations must adhere to certain Fairtrade consciously for other major product operating on their own strength from a mix of take the steps necessary criteria. chooses to work with small categories such as cocoa, labour, and in some cases factors – or rather actors. to accelerate their own And those criteria don’t farmers. And that goes not sugar and cotton. These bring in hired labourers. Energetic supporters development. Together only apply to farmers: only for coffee, but also are often family businesses around the world who they create an “enabling Fairtrade also makes consistently promote the environment” – the specific demands of importance of Fairtrade are conditions, so to speak traders. Producers and vital for the label’s success. - for the successful their buyers are both These include companies implementation of required to contribute that create partnerships Fairtrade standards. their share. Therefore, with small farmer These standards are central there are two standards: organizations in order to to the business model. the Fairtrade standard A focus on small coffee farmers optimally implement the In order to be eligible for for small farmers and for “chain relationship.” But certification, all parties traders.7 fits with Fairtrade’s mission. it also includes NGOs that involved in the coffee chain • Small farmers are often the backbone of rural life in developing countries. Development of a region where they work begins with improvement of their living conditions. • Small farmers often live in poverty and their position in the supply chain is weak. • Ecological and climate problems are especially threatening to the livelihoods of this group. • As owners of their land, farm families see production and trade not only as a means to earn an income but also as a way to maintain and strengthen the social and cultural structure of their communities.8 • At the same time, small farmers are very important for the coffee market. They produce about 80% of all coffee in the world, covering the entire range of coffee varieties and qualities. The Fairtrade Model 7 For Fairtrade’s complete standards, go to www.fairtrade.net. 8 How businesses are going further to make international supply chains work for small holder farmers, FFairtrade Foundation (2013). 24 25 Basic Criteria sustainable production Organization and development

Farmers were initially The ILO lays out important practices and increase the asked to adhere to criteria provisions regarding ability to withstand it. relating to labor rights and child labour. These rules Criteria for protecting the the environment. These apply to all farmers, big environment occupy a basic criteria are shared by and small. Of course, prominent place within the all sustainability systems. Fairtrade prohibits the Fairtrade system. There are Fairtrade does not work with individual The standards for worst forms of child strict rules for the use of employment are labour such as child pesticides and for dealing farmers but rather with democratic derived from the central slavery. But additionally, with soil, water, waste, organizations of small-scale coffee farmers – conventions of the ILO, Fairtrade forbids taxing air and biodiversity. The which are mostly cooperatives. the International Labour work for children younger purpose of these rules is to Organization of the United than 18 and any form of create a safe and healthy Nations. They outline employment under the environment that leaves guidelines for the rights age of 15. Working for natural resources intact for of trade unions and set the family business is future generations. down prohibitions on permitted so long as this Fairtrade farmers have discrimination and forced work doesn’t interfere no obligation to grow labor. There are also with schooling and it’s organic crops. Fairtrade rules for healthy and safe appropriate for the child’s has deliberately made that Fairtrade doesn’t stop forces around him. Only by must be filled. A small working conditions. Wages age. choice. Switching over to with these basic criteria. working with others can farmer in Latin America must be consistent with the No one can provide a 100% organic coffee cultivation In light of its mission, he improve his position. harvests about 1,300 norms of the industry: in guarantee that a product can be very costly, also the organization has First and foremost, kilograms – an African the Fairtrade system, these is free of child labor. But because of the necessary formulated a number of organized farmers are farmer even less. But when wages should gradually just like strict controls inspections. If Fairtrade additional conditions. The in a better negotiating they work together, these increase beyond these are necessary to ensure required its farmers to most crucial of these is the position – they’re no farmers can fill a container. norms. other requirements, it’s grow organically, they formation of organizations. longer competing against Not all of these criteria also essential to regularly would shut out the weakest Fairtrade does not work each other but standing In addition, farmers’ are valid for small coffee and rigorously monitor producers. However, many with individual farmers, together. Organization also organizations can help their farmers – who generally compliance with labour farmers’ organizations but with democratic brings with it economies members with training only employ family rules. Fairtrade intervenes choose organic certification organizations of small- of scale, such as the programs that enhance members and only very immediately if child labour once they are able to do scale coffee farmers. These joint procurement of their professional skills occasionally hire outside is discovered. Moreover, so. organizations are mostly agricultural resources, the and give them a voice in workers. However, the Fairtrade International cooperatives. organization of transport developments that affect farmers’ organization and works proactively by The reason for working and the control of coffee their interests. Plans farmers who employ a large creating community with farmers’ organizations processing and its export and projects that would number of workers - the programs that teach is that they are a form of in order to add value to the be out of reach for an ‘bigger farmers’ within the people – including children self-defense for a small product. For example, in individual family might organization - must comply themselves – to blow the farmer, who often finds order to export coffee, an just be possible if their

The Fairtrade Model with all the rules. whistle on child labour himself at the mercy of the 18-ton shipping container organization takes them on.

26 27 A transparency of farmers is easier in a these small farmers should Standards for Traders operations and a highly- smaller organization than also produce at least 50% democratic nature to for organizations with of the total volume of Pages 28 and 29 thousands of members, production. The result is With the Fairtrade model, trade should provide farmers with more assurance of a good the organization are especially if the farmers that small farmers always income so that development can take place. The main criteria for buyers are as follows: ‘hard’ entry requirements have had limited or no have a (very) large majority. for Fairtrade. Farmers schooling. If necessary, Lastly, Fairtrade asks choose the leaders for Fairtrade International’s farmers’ cooperatives to their organization’s local experts (also known make plans for their own board. This board is as liaison officers) development. Farmers accountable to the general provide training sessions set their priorities in assembly, where each for farmers to enhance these plans and they farmer has a say, either capacities within the differ according to the direct through his own organizations. local context. Farmers are At least the Minimum Price presence or through elected Sometimes, cooperatives generally free to make their representatives. Many also count larger- own choices, but since aspects of the standard scale farmers among 2011 Fairtrade has also Sustainable production This gives farmers Transport costs to the port agreement between their members. Their required them to choose at costs money. If all is well, protection in times of and the initial processing farmers and Fairtrade are participation can be least one expenditure that the cost is factored into the need. And during better are, therefore, included in focused on ensuring the important for the will benefit the laborers product’s price. However, times, the minimum price the price. active participation of an organization in terms of they occasionally hire. the market doesn’t always provides them with a sense The amount of money the organization’s members knowledge and experience. The implementation of regulate that automatically. of security that they’ll organization ultimately in planning and decision- Fairtrade ensures that these Fairtrade development Poor farmers are hit hard be protected if the need earns for its members is making, in particular farmers don’t dominate the plans are funded by the if the price of coffee should arise. determined by the mix about what will happen organization. To achieve ‘Fairtrade premium’ – the goes down and they lack Only coffee purchased by of revenues from sales with Fairtrade’s earnings. a fair balance within extra money that comes the financial reserves to a Fairtrade buyer, is sold in different markets. In Only when all members organizations, Fairtrade from companies and withstand those losses. under Fairtrade conditions. general, however, the actively participate can mandates that at least consumers when they There’s no guarantee that more coffee sold under development become a 50% of members be small choose Fairtrade Therefore, Fairtrade has all farmers’ coffee is sold Fairtrade terms, the widely-supported process. farmers. If the organization products. established a safety net as Fairtrade. The consumer higher the earnings. If Good communication wants to become eligible in the form of a fixed has the last word. No the organization has paid with an organization’s for Fairtrade certification, minimum price. That price sales of Fairtrade coffee all its bills, net revenue is determined through translates to no extra remains. The farmers then research and consultation earnings for farmers. There decide together what will in order to cover the costs are no acting subsidies. happen with that money. Many aspects of the standard agreement between of sustainable production. Farmers’ organizations Usually, everything is paid If the market price is receive payment for their out to the organization’s farmers and Fairtrade are focused on ensuring the higher, then Fairtrade coffee, not individual members but they can also active participation of an organization’s members. simply follows the market members. It is a FOB (free choose to collectively invest Only then, does development becomes a widely- price. But when market on board) price. In other these profits. prices hit the Fairtrade words, it’s the price of the supported process. bottom, then the minimum coffee at the moment it’s

The Fairtrade Model price comes into effect. loaded at the port of origin.

28 29 The Minimum price and premium 250 Fairtrade sets the country and per coffee used in processing. The minimum prices for variety. Fairtrade chooses table below shows the 200 coffee farmers based on an average cost for two minimum prices and changing cost prices. types of coffee (robusta premiums (in cents per Production costs can vary and arabica) and for pound) for the two most 150 greatly from country to each of the two methods common types of coffee. 100 Year Minimum Price Bonus US cent per pound (US cents per pound) (US cents per pound) 50 arabica robusta (washed) (unwashed) 0 1988 1992 1996 2000 2004 2008 2012 1988 115 95 10%* 1995 121 101 5 Market price robusta Fairtrade price robustaca 2007 121 101 10 2008 125 101 10 2011 140 101 20 The Fairtrade Premium

* The bonus was 10% of the Fairtrade minimum price. At higher coffee prices that percentage was lower. It doesn’t matter whether investments, but farmers choice is up to them: the Note: There’s an extra bonus for organic coffees. Since 2011, that bonus has been the market price is in have very few resources. members set the agenda. 30 cents per pound. effect or the Fairtrade With the premium, In 2011, all Fairtrade coffee minimum price – there’s however, farmers’ organizations together always a fixed premium organizations can invest decided to devote at least World Market and Fairtrade paid on top of these prices. in crop improvements, 25% of the premium to Prices compared Since 2011, the premium business development, increasing productivity has been $.20 per pound. and environmental and/or and/or quality. Development requires social advancements. The 150 Pre financing of coOperatives 100

Farmers expect to be paid paid by its overseas to take loans, which are for their coffee at the buyer. But if farmers were often difficult to obtain or 50 time they deliver it to the required to wait such a come with extremely high

US cent per pound cooperative. However, it long period to be paid, interest rates. Therefore, often takes many months they’d surely be driven into buyers are required, when 0 before the coffee reaches the arms of loan sharks. cooperatives ask for it, to 1988 1992 1996 2000 2004 2008 2012 its destination port and To bridge this period, pay 60% of the sales price

The Fairtrade Model Market price robusta Fairtrade price robusta only then is the cooperative the organization needs in advance.

30 31 “Practice what you preach. Eneco consciously chooses Fairtrade coffee. Fairtrade fits seamlessly with Eneco’s vision ‘Together, we strive for sustainability.” Desiree Dongelmans, Facilities Manager, Eneco Fairtrade Coffees Reach in Figures

‘Fairtrade certified-coffee farmers’ organizations (2013)’ More than 600 thousand FAIRTRADE CERTIFIED COFFEE FARMERS IN 31 countries

FAIRTRADE412 PRODUCER ORGANIZATIONS WORLDWIDE

Guatemala 15 27 Honduras Mexico 46 Haiti 2 Lao People’s Democratic Republic Dominican Republic 7Uganda El Salvador 4 14 2 India 5 Thailand Vietnam Nicaragua 1 1 Costa Rica 2 Rwanda Ethiopia 27 9 Colombia Sierra Leone 1 7 4 Ecuador Kenya 47 Cote d’ Lvoire 13 Indonesia Cameroon 2 Papua New Guinea 2 Peru 1 27 16 8 Tanzania Brazil Democratic East Timor 2 3 27 Republic of 72 Malawi the Kongo 1 23 Bolivia

Fairtrade producer

s Reach in Figures countries

National Fairtrade Organizations Fairtrade Coffee

34 35 How the Fairtrade Premium Fairtrade coffee production is spent by country2012

18% Peru 28% Colombia

10% African countries

12% Other 5% Nicaragua

5% Indonesia

7% Costa Rica 8% Brazil

7% Guatemala

Allocation of the Fairtrade premium by farmers organizations 2010-2011

8% Community 2% Training 9% 3% Environment Miscellaneous 2% Health

27% Cash payments to members

49% Investment in organizational development, production RESULTS IN NUMBERS and processing

36 37 Extra income Fairtrade Sales of Fairtrade roasted coffee coffee cooperatives in the Netherlands

60.000.000 4.500 50.000.000 4.000 3.500 40.000.000 2008-2012 3.000 2003-2007 2.500 30.000.000 1998-2002 1993-1997 2.000 20.000.000 1988-1992 1.500 Volume (x 1000 kg) Volume Extra income (euros) 1.000 10.000.000 500 0 1988 1992 1996 2000 2004 2008 2012 *additional income in addition to the ‘normal’ market price based on sales in the Netherlands Sales of Fairtrade roasted coffee worldwide Production and exports Fairtrade Coffee Cooperatives 2011 120.000

400.000 379.500 100.000 350.000 300.000 215.166 80.000 250.000 200.000 126.079 60.000 150.000

100.000 (x 1000 kg) Volume 40.000 Volume (x 1000 kg) Volume 50.000 0 20.000 production total exports 0 1988 1992 1996 2000 2004 2008 2012

Resultaten in cijfers export FT

38 39 “The quality of Starbucks coffee begins at the source. We only buy responsibly-grown and fairly- traded coffee and we’re one of the largest purchasers of Fairtrade-certified coffee. Starbucks’ coffee purchasing program ‘C.A.F.E. Practices’ guarantees the best quality coffee and both socially and environmentally responsible practices.“ Renee Shortz, Starbucks coffee master The Impact of Fairtrade Research

It’s a fact -- since 1988, France. The NRI looked continue to improve its Fairtrade coffee has at more than 80 studies own work according to a experienced enormous and the CIRAD’s overview so-called MEL (Monitoring, growth. But what exactly included 77 studies. A few Evaluation and Learning) does that growth mean for studies were reviewed by strategy. farmers in the southern both groups. Given the hemisphere? fact that Fairtrade got its Together with a number At the end of the 1990s, start with coffee in Latin of research institutes, the first scientific studies America, most studies Fairtrade International on the impact of Fairtrade have been focused on that has developed a research Fairtrade’s impact is all aspects of Fairtrade’s It is possible to outline were published and many product, in that region. methodology9 that is continuously monitored by effects. Furthermore, a number of research more have appeared since Since 2005, Fairtrade continuously being refined. the scientific community. there are many factors that findings that reflect that time. This research has International has also This methodology is related However, it’s difficult together influence changes. Fairtrade’s influence. We’ve been conducted in different conducted their own to a “Theory of Change” to make an unequivocal It’s difficult to assess to commented on the results, ways, each examining a research on the effects of – a theory completed in judgment on the extent and what extent changes are where necessary. different aspect of the its mark. This research’s 2013 that describes the nature of that impact. due to Fairtrade and to These results are derived Fairtrade system’s impact. primary goal has been to interventions implemented Fairtrade partners are what extent these changes from research conducted In 2009 and 2011, many provide accountability to within the Fairtrade system a diverse group. An are influenced by other in cooperatives in Peru of these studies were the external parties that in order to achieve the organization with 30,000 factors. For instance, it’s (COCLA 2008 and Cepicafé examined by the University support Fairtrade. But organization’s objectives. members in Tanzania generally accepted that a 2005), Bolivia (Fecafeb of Greenwich’s Natural there’s also an internal These three goals are is very different from a high level of competency 2002 and 2005), Ecuador Resources Institute (NRI) goal. Based on research, derived from Fairtrade’s cooperative in Honduras within an organization is (Fapecafe 2007) and Kenya in England and CIRAD in Fairtrade International can mission: with 50 members. crucial to the outcome of (Gikanda 2010). We also Moreover, partners are the development process. draw from the research often at different stages of External parties providing analyses performed by the development. The degree technical support to NRA and CIRAD, a study of impact changes over the farmers’ organizations by the German Center 1. The realization of fair trade course of time. Also, not also make essential of Evaluation (CEval) 2. The empowerment of small farmers all partners are involved contributions. conducted among Peruvian 3. The sustainable improvement of small farmers’ living conditions to the same degree. Some More research is coffee farmers and a study organizations sell a lot continuously needed to of Guatemalan farmers according to Fairtrade provide further insights, involved in the coffee conditions and others sell though the high cost for cooperative Fedecocagua much less. such analysis is a limiting (released in 2012 and 2013, In short, a singular factor. However, Fairtrade respectively). ‘Fairtrade impact’ doesn’t International began a See the Appendix for a list exist. It’s not easy to draw comprehensive, coffee of sources used.

The Impact of Fairtrade definitive conclusions on industry-wide study in 2013. 9 A methodological guide for the impact of Fairtrade, Nicolas Eberhart & Sally Smith (2008). 42 43 The effects for farmers Increased productivity has ies bear the stamp of low reasonable earnings over a and cooperatives contributed to higher earn- coffee prices between 1999 long period of time without ings: farmers within the and 2004. The development the risk that collapsing Earnings Fairtrade model produced of farmer cooperatives and prices will negate earlier more coffee than five years the welfare of farmers, even achievements. earlier, while other farmers in times of higher prices, Nevertheless, several stud- The biggest impact for is of particular value as and 2006, prices were 40 to actually harvested less than can’t be viewed separately ies have shown that farm- farmers cited in each study long as regular market 60% higher. in 2006.10 from the periods when ers’ incomes are still too is a higher and more stable prices are unable to cover Even in times of better Apparently, the first group prices fell. Studies show low.11 One important reason income. The value of the production costs. At the prices – when the Fairtrade emerged stronger from just how important the for this discrepancy is that Fairtrade minimum price height of the coffee crisis in minimum price wasn’t in the coffee crisis and could minimum price safety net Fairtrade sales account is confirmed by research 2001, Ecuadorian farmers effect – members of a Fair- later reap the benefits. Also is to ensuring continuity of for only part of a farming results. The stabilization who were members of trade-certified cooperative research from Kenya in development. This effect of family’s total income. Ac- of their earnings is seen as Fapecafé received two to enjoyed higher and more 2010 and from Guatemala the minimum price is com- cording to a recent report one of the most immediate three times more for their stable incomes than their in 2012, indicates that farm- prehensible given the many by Fairtrade International, benefits for coffee pro- coffee than they had previ- peers. Research conduct- ers derived more income years since Max Havelaar’s farmers’ organizations only ducers, both for individ- ously received from local ed in Peru concludes that from their coffee. In Kenya, start that the Fairtrade sell an average of 45% of ual farmers and for their merchants. And research Fairtrade farmers have this was mainly due to the minimum price has been in their coffee under Fairtrade organizations. from Bolivia and Peru also earned more after the delivery of better quality; in effect – about 13 years for conditions.12 Research Fairtrade’s minimum price shows that between 2000 coffee crisis (see table). Guatemala, by increasing arabica and even 20 years in Bolivia indicates that productivity. The extra for robusta. Development farmers need to sell at least earnings provided by Fair- is a long and gradual pro- 30% of their production via Coffee farmers: Income per year (2006-2011) trade contributed to these cess and it can’t be fostered Fairtrade in order to pro- improvements in quality solely during times of high vide themselves with the % and productivity. prices. More important basic necessities of life.13 100 All of these recent stud- for farmers are reliable, 9,7 7,1 19,9 14,3 90 7 14,4 80 14,3 7,1 70 23,7 13,7 60 21,4 50 30,5 More than 8000 USD 40 5001 - 8000 USD 30 20 200 - 5000 USD 61,6 71,4 26,9 50 10 Less than 2000 USD 0 Target group Control group Target group Control group (n=341) (n=13) (n=357) (n=13)

estimated annual income (2006) annual income (2011)

10 Assessing the Impact of Fairtrade on Poverty Reduction through Rural development, CEval (2012), p. 37. 11 Jaffee (2008) in his study in Mexico (see box). 12 Monitoring the scope and benefits of Fairtrade, FI (2012), p. 44. The Impact of Fairtrade 13 Síntesis del estudio sobre el impacto del comercio justo en la Central Piurana de Cafetaleros (Cepicafé), en el norte de Perú, AVSF (2005), p.12. 44 45 Food in times of low coffee prices: an example from Mexico When farmers experienced In Peru, farmers usually from 2011 also shows that unexpected expenses, the paid 4% to 5% interest per Fairtrade farmers were in cooperative could come month on loans. Members a position to save more A study by Daniel Jaffee among farmers in Mexico between 2001 and 2004 to the rescue with loans15 of Cepicafé could borrow at money.18 illustrates the difference that Fairtrade can make during periods of plummeting or advance payments.16 1.8% per month.17 Research world coffee prices. The study, conducted among 51 families, compared members of the Fairtrade-certified Michiza Cooperative in Oaxaca with similar unorganized farmers who sold their coffee to middlemen. Jaffee concluded that Michiza Broadening sources of income farmers were better able to feed their families. He substantiates this statement through the following figures: The buildup of capital value to their coffee by just the opposite happened. • Members received twice as much for their coffee as non-members; organic offered farmers’ gaining control over a Farmers from COCLA farmers received even three times as much. Their total earnings were four times organizations the larger part of the chain, for and from Costa Rica, as high, because members could harvest some 30% more coffee from their bushes. opportunity to broaden example, by taking care of for example, decided to • No more than one third of members could adequately provide for themselves. their activities and their processing, transportation focus more exclusively 20 23 However, for non-members, this number dropped to 17%. Members seemed to sources of income and, and export themselves. on coffee. In Ecuador, thus, to reduce their In many cases, extra farmers could invest in spend more money in caring for their coffee bushes than non-members. vulnerability. Fairtrade has Fairtrade revenues a new coffee processing • 44% of non-members consistently had enough food, compared to 67% of proven instrumental in this supported the transition method, even though members. Non-members used 85% of their income for food, while members process with its guaranteed to organic farming.21 market prices were low only had to spend 59% of their income. However, members spent a total of minimum prices and Several cooperatives at that moment.24 This 25% more. premiums, long term expanded beyond coffee resulted in more demand • 41% of non-members had debts and 57% of them borrowed money every year. contracts and access to and trained their farmers for labour during the With Michiza farmers, these percentages were 31% and 29%, respectively. credit. By investing in the in the production of high season. And further • Members drank on average three times as much milk and consumed twice as quality of their product, handicrafts items, setting specialization didn’t much meat as non-members. cooperatives gained access up shops or producing endanger the farmers’ own to new export markets. grain.22 Peru’s Cepicafé food supplies.25 To the Their knowledge of the started producing sugar contrary, several studies market increased as did once the organization was conclude that farmers even their negotiation skills strong enough to include got new opportunities to Access to credit and contacts with buyers.19 sugar growers in their create a more varied diet Other cooperatives added membership. Sometimes for themselves.26

Cooperatives (and their with Fairtrade, they also Ecuador were supported by 14 Nicolas Eberhart (2007), p. 16. 15 CEval (2012), p. 42 42 (also, see table 5.2.8). members) affiliated with enjoyed more confidence NGOs with financing, but 16 Farmers Cooperative Society Ltd, Africa Now (2010), p. 10. Fairtrade had better from traditional lenders have managed things on 17 AVSF (2005), p. 13. access to credit than who found it easier to give their own since 2004.14 18 CEval (2012), p. 41. other coffee farmers. them a loan – as seen in Because many cooperatives 19 A review of the impact of Fairtrade over the last ten years, Fairtrade Foundation (2010), p. 2. Cooperatives benefitted research from Cepicafé in have achieved a better 20 COCLA in Peru is a clear example of this. 21 The Last Ten Years: A comprehensive Review of the Literature on the Impact of Fairtrade, NRI (2009), p. 12. from pre-financing from Peru which shows that that financial position, they’ve 22/23 NRI (2009), p. 11. buyers as outlined by organization has had no been able to establish 24 Nicolas Eberhart (2007), p. 10. Fairtrade’s standards. And trouble getting financing. loan programs which 25 Estudio de los efectos y del impacto del comercio justo certificado en el Perú y en República Domínica - Estudio de la organización de productores COCLA, Perú, Lise Duval, Oréade-Brèche (2008), p. 23. The Impact of Fairtrade because of their contract At first, organizations in benefitted their members. 26 Jaffee (2008).

46 47 Productivity and quality A practical example: Cepicafé

Several reports observe that improvement has occurred a team of experts, the The Peruvian cooperative, Cepicafé, provides a good example of how an investments in production from technical assistance introduction of quality organization can professionalize itself and grow quickly. Cepicafé’s positive image and quality27 are made in and education about control and the acquisition attracted farmers and the organization grew from 200 to 6500 members between order to also secure future agriculture. In the forty of a sorting machine.29 1994 and 2006. The rise in membership, together with better Fairtrade prices, revenues from coffee. years that Guatemalan In Ecuador, cooperatives made it possible for Cepicafé to build capital. Also, the larger scale of operations Therefore, cooperatives coffee farmers have sold started, different from ensured a decrease in the unit cost of their coffee. And with the additional often used the extra their coffee according before, to pay for quality. resources, Cepicafé was able to bring in more people with management skills, premiums earned from to Fairtrade conditions, This was meant as an including a permanent director. These changes improved policy effectiveness Fairtrade for this purpose. they’ve doubled their incentive for farmers but and the organization’s bargaining position. And that, in turn, led to an increase Ninety percent of productivity.28 In Peru, also strengthened the in access to credit. Together with the Fairtrade premium, the new revenue stream surveyed coffee farmers COCLA invested in cooperatives competitive made it possible for the cooperative to invest in itself – Cepicafé built offices, in Guatemala cited the coffee quality through an edge. Several organizations purchased agricultural resources, improved infrastructure and bought land for improvement of their extensive and successful in Latin America have even a factory. The additional funds provided space for social services, such as the product as the main ‘assistance program’ for it’s gained access to the market implementation of a life insurance policy. And last but not least, the cooperative’s effect of Fairtrade. This members which included for ‘specialty coffees’. improved operations attracted new buyers.

Organizational effectiveness

Fairtrade organizations According to a survey of with their members.31 And have professionalized cooperatives in Bolivia, like Peru’s COCLA, the themselves in many Fairtrade’s demands have Fairtrade premium was areas. Several studies had a positive effect on often used to improve the have focused on the structuring.30 Research in internal organization of question of how the Peru finds that Fairtrade cooperatives.32 strengthening of these cooperatives were well organizations took place. organized and stood firm In the forty years that Guatemalan coffee farmers have sold their coffee according to Fairtrade conditions, they’ve doubled their productivity.

27 The impact of Fairtrade labelling on small-scale producers , summary Max Havelaar France (2009), p. 14. 28 Veertig jaar eerlijke koffie: verleden, heden en toekomst, Fair Trade Original (2013). 29 Max Havelaar France (2009), p. 14. 30 AVSF (2005), p. 24. 31 CEval (2012), p. 46. 32 Lise Duval (2008), p. 28. 33 Other studies in Latin America during this period, show 10% to 20% growth, The Impact of Fairtrade Max Havelaar France (2009), p. 20.

48 49 Participation Success and self confidence

Several studies show the household and owner only be borne by women According to research, further education on image.39 This finding significant progress in of the land – who are themselves. Fairtrade one of the most important improving quality and applies especially to the level of democracy members of cooperatives. International continues outcomes is that Fairtrade greater knowledge of the farmers’ organizations and the participation of They maintain contacts to seek what conditions has helped producer effects of market forces. in Latin America that members within farmers’ with the cooperative can best contribute to the organizations improve And research shows that have managed to gain organizations. This and, eventually, are strengthening of women’s their position in the coffee when coffee farmers independent access to the progress is attributed to the ones to receive position. chain. Their improved experience greater success export market and have Fairtrade’s criteria and the payment for the coffee. position is attributed to in trade, they also grow broken their dependence subsequent monitoring Women comprise only Coffee workers are another an increased awareness in confidence and enjoy on unreliable middlemen, of those standards which 14% of the membership group that deserves of the growing process, a more positive self the so-called ‘coyotes’. are often supplemented within certified-coffee attention. Small-scale by tutorials from organizations, according to farmers are usually limited external organizations. the most recent Fairtrade to family labour, but some Stay or Leave Transparency – International report.36 hire extra hands during achieved through good In several cases, the harvest time. Research administration and clear Fairtrade premium has shows that these workers In many regions, it’s Several studies found that Members of Fairtrade- communication – allows been dedicated to income- profit little from Fairtrade common for coffee farmers this temporary migration certified organizations members to help make generating activities benefits. Therefore, to work elsewhere for has virtually stopped were also found to invest joint decisions about the for women. However, Fairtrade stipulated in part of the year in order among Fairtrade farmers. more in their homes and in cooperative’s business. researchers acknowledge its most recent edition to supplement the family With the extra income durable goods than other Members appear to value a risk: women’s workload of standards for small income. In Ecuador, from Fairtrade, families farmers. They also spent this highly and were can become even heavier farmers that at least one coffee farmers often offer could keep their heads more on education and generally very satisfied if a project isn’t focused chosen expenditure of the themselves as labourers to above water without they coped better with the with their organization.34 on coffee.37 The study in Fairtrade premium must large banana plantations. additional work. costs of healthcare.40 Research conducted in 2012 Peru shows that women also benefit these workers. concluded that Fairtrade were heavily involved in Representatives for the clearly helps to strengthen deciding how the Fairtrade workers have the right organizational structures.35 premium would be used.38 to discuss this expenditure But a clear ‘gender plan’ with the general Studies on women’s was mostly absent in assembly. role within cooperatives cooperatives, even though provide a mixed picture. Fairtrade International Sometimes, their encourages cooperatives to representation has consider this topic when increased and sometimes deciding how Fairtrade no change has been premiums will be spent. 34 Understanding the Impact of Fairtrade, Sally Smith, April 2013. observed. Women do much Women’s weak position is 35 CEval (2012), p. 49. of the necessary work in deeply rooted in social and 36 Monitoring the scope and benefits of Fairtrade, FI (2012), p. 29. coffee production, but it’s cultural beliefs. Changes 37 NRI (2009), p. 35. 38 CEval (2012), p. 30. The Impact of Fairtrade mostly men – the head of occur slowly and can 39 CIRAD notes this effect in 20% of the reviewed studies. 40 NRI (2009), p. 9. 50 51 How families in Peru solve money problems41 Regional prices

COCLA- Member Non-Members The higher prices farmers prices farmers received in in times of higher prices, received through Fairtrade, a particular region were Fairtrade’s influence was Temporary migration 4% 22% could also compel other 5% to 15% higher than the noticeable. Research from Credit from their cooperative 92% NVT buyers in a given area to prices for similar coffees 2012 in Peru notes that Credit from traders 0% 35% adjust their prices. Then, in neigbouring regions. traders felt compelled to Selling their labor 0% 0% the general price level for Research conducted in offer social projects in Other 12% 30% an entire region went up other coffee-producing order to compete with and other farmers also countries have produced Fairtrade buyers.48 benefitted. In Ecuador, the comparable results.47 Even Still, many farmers were to the more prosperous recent research conducted forced to stop altogether Spain. Other research in Peru notes that the with coffee production suggests that higher children of coffee farmers Community Development around the turn of the incomes were the main want to stay so that they century. In Ecuador, for impetus for leaving: young too can later become coffee example, many families – people moved away to farmers.43 including farmers affiliated pursue further education The Fairtrade premium, rights, the environment despite these gains, with Fairtrade – migrated elsewhere.42 However, more currently at $.20 per pound, and tourism. In Bolivia, many residents still left has been used for a wide coffee cooperatives the region during the range of projects. It has organized services such coffee crisis to seek their Effecten op regionaal en benefited members and as a pension fund, sewing livelihood elsewhere. nationaal niveau their families, but also workshops, shops and Extensive research in the wider community.49 ecotourism.50 These kinds Peru from 2012 attributes Beleidsinvloed Cooperatives have of projects created extra contributions made to contributed to the funding employment. Research rural development to of social programs in the from Bolivia states that the Fairtrade premium. Fairtrade coöperaties hoord door lokale overhe- belangen van hun boerenle- region, such as COCLA’s Fairtrade is the most Funds were invested in wonnen ook in eigen land den en andere organisaties den te behartigen, ook in de involvement in projects in important engine for the construction of roads aan invloed, zo blijkt uit zochten samenwerking om politieke arena. Ze raakten Peru related to health, radio powering development , which made health vele studies in zowel Afrika regionale projecten uit te beter vertegenwoordigd in communication, women’s in the region.51 However, clinics more accessible to als Latijns-Amerika.44 De voeren. Onderzoek in 2012 nationale en zelfs interna- successen van de boeren- concludeert dat koffieboe- tionale instituties en lieten organisaties bleven niet ren serieuze invloed kregen vaker hun stem horen.46 onopgemerkt. Het bracht op de planning en vorm- Veel meer dan voorheen hen meer legitimiteit en zo geving van ontwikkelings- wisten ze zo landelijk be- 44 Fairtrade Foundation (2010), p. 4. meer contacten met andere projecten in hun gemeen- leid mee te bepalen. 45 CEval (2012), p. 59. 46 Fapecafé in Ecuador en COCLA in Peru are examples. organisaties in de regio. schap.45 Koffie-organisaties 47 See NRI (2010), CIRAD (2011) and Summary Max Havelaar France (2009). De coöperaties werden ge- slaagden er beter in de 48 CEval (2012), p. 62. 49 For example, in Kenya the money has been put into renovating classrooms and healthcare centers, 41 Max Havelaar France (2009), p. 11. see Africa Now (2010). 42 AVSF (2005) and Jaffee (2008) reach these conclusions in, for example, 50 Summary Max Havelaar France (2009), p. 28. The Impact of Fairtrade their studies conducted in Peru and Mexico. 51 NRI (2009), p. 8. 43 CEval (2012), p. 62. 52 CEval (2012), p. 20. The coffee cooperative constructed 280 kilometers of roads. 52 53 everyone. This also applied increased. The Fairtrade This study suggests that a Fairtrade s Impact to schools, making village premium made it possible population’s high level of schools a more attractive to set up programs that participation is a crucial place for teachers to come strengthened social bonds prerequisite for achieving work. The study found and gave farmers a sense rural development. that the influence of of ownership and pride – farmers in shaping their after all, they had earned community was greatly this means themselves.

Environmental Impact

Broadening income sources

53 Higher prices There is still little research of educating farmers. In of Fairtrade-certified in the region self confidence illustrating the effects Guatemala, non-Fairtrade coffee organizations and of the Fairtrade coffee farmers seemed to use about half of all Fairtrade higher trade on the use of natural twice as much chemicals, coffee is also certified resources. while in Mexico almost organic.55 However, a

Switching to organic farming prices all Fairtrade coffee is number of studies also Cover basic needs of life Continuation of Farming existence more spending A study in Kenya also certified organic.54 indicate that some farmers’ Democratization showed that Fairtrade’s Fairtrade benefits have organizations experience environmental made the switch to Fairtrade’s environmental Community Development requirements guided the organic farming possible, requirements as too Trust in banks policies of the cooperative. according to research in harsh.56 effective

The Fairtrade premium Peru, Ecuador and Bolivia. financing support of women More stable income access to credit organization partly covered the costs Meanwhile, nearly 70% Pre Education on agriculture participation of members higher income investmentStop temporary Opportunities migration Stronger bargaining position Quality improvements the cooperative Loans from Increase productivity Representing Less interests vulnerability Influencing policies

53 Africa Now (2010). 54 NRI (2009), p. 18. The Impact of Fairtrade 55 Based on details from FI en FLO-Cert 2012. 56 NRI (2009), p. 19. 54 55 “Coffee is one of the most traded commodities, but also a product that many people have in their hands every day. I truly believe that if you know your coffee is responsibly produced and marketed, it tastes better. But sustainability and fairness are concepts that are constantly in motion. Organizations such as Fairtrade should continuously raise the bar. That’s the power of progress!” Samuel Levie, founder Youth Food Movement Cooperative development Two profiles THE

Fairtrade has an impact do these effects mean in cooperatives in Latin of Prodecoop on the development of practice? The following America and Africa. own about farmers’ organizations stories illustrate the members and their income. What development of two 2300

Prodecoop Nicaragua 8.000hectares of land Prodecoop is an umbrella organization received a farmers could expand their organization in Nicaragua massive blow from the knowledge of production. comprised of 40 different effects of Hurricane Mitch, In this way, the cooperative Every year they coffee farmer cooperatives. which wreaked enormous could guarantee the quality export about In 1993, small cooperatives destruction in Nicaragua of the beans and could enter from the poor northern and its neighbours in the market for high-quality regions of Estelí, Madriz 1998. Beginning in 2000, coffees (the ‘specialty 30.000 and Nueva Segovia united Prodecoop developed market’) in the United of green to become Prodecoop. They into a strong professional States and Nicaragua. Fifty- coffee beans became Fairtrade certified organization with six percent of the coffee is 60-kgbags to customers that same year. Their goal? Fairtrade’s help. Farmers grown organically. in Europe the To export their coffee were able to focus on United States themselves. Individually, improving the quality of In addition to improving and Japan the cooperatives were too their coffee and making the quality of its coffee, small to achieve this aim. their coffee production the cooperative is also Now, Prodecoop has 2,300 more sustainable. a pioneer in the field individual members, of Prodecoop made it possible of social development. which almost 30% are for its affiliated cooperatives The cooperative invests of these farmers grows women. to work effectively with about a quarter of its 87% Nicaragua is one of the each other. Fairtrade premium into their poorest countries in Latin Since 2000, Prodecoop is education, health care coffee on America. The country is processing its beans for and guaranteeing food less than largely dependent on the export as much as possible supplies. Moreover, export of coffee. More than at a central location. Prodecoop spends 10% of half of that coffee is grown By using the Fairtrade the development premium 4 hectares by small-scale farmers. premium, the cooperative to improve the position of of land The first years Prodecoop built a factory during that women and strives to have focused mainly on year to ready the coffee women hold at least 40% increasing sales and beans for export. Prodecoop of the positions within the securing relationships with also used the premium to organization.

Cooperatieve ontwikkeling twee profielen customers. The still fragile provide training so that

58 59 Gumutindo Uganda

On the slopes of Mount farmers are trained to be More landslides also took 13% of the cooperative’s production of coffee, Elgon in southeastern able to assess the quality place in 2011 and 2012. membership. In an attempt Gumutindo has introduced Uganda, the farmers of of their coffee themselves. Gumutindo used part of its to give more attention a coffee line entirely Gumutindo cultivate their In 2004, the cooperative Fairtrade premium to plant to women’s role in the produced by women. coffee. For years, coffee attained the Eco-Cert label forests in order to prevent has been Uganda’s main and since a few years is further disasters. export product. After producing 100% organic Ethiopia, Uganda is the coffee. In addition, these farmers largest African exporter. Gumutindo’s production have used the premium The country has a long volumes have significantly to lay electricity lines, started in tradition of cooperatives: expanded over the years to construct cooperative already in the 1940s and much of its coffee buildings and to Ugandan coffee farmers can now be sold on the improve sanitation and had united together into Fairtrade market. This water supplies. In 2010, village cooperatives to provides the farmers with Gumutindo built a prevent the exploitation of some extra benefits and factory where the coffee Umbrella organization is prepared for export. 1998Certified in coffee traders. they feel a high level of commitment and loyalty to The final film is removed Gumutindo emerged in the cooperative. Although from the beans and the 2003 from a partnership the umbrella organization remaining poor quality affiliated between the Ugandan has grown into a thriving beans are removed 10cooperatives umbrella organization business, a number of the manually as they pass by Bugisu Cooperative Union affiliated cooperatives still on a conveyor belt. The 2003 (BCU) and the UK Fairtrade need to take important coffee then receives its organization Twin Trading. steps towards improving quality classification. The When BCU collapsed in their cooperation with the factory was a major step 2003, four of the member other members. forward for the cooperative cooperatives decided to by removing the need to take over the export of Since 2010, the cooperative outsource this process. 6294 high quality coffee. They has had to deal with Gumutindo is also members in 2010 became certified under the consequences committed to social the umbrella organization of environmental development. The Gumutindo – Ugandan for degradation. In March cooperative aims to ‘very good quality’. Ten of that year, a landslide strengthen the position cooperatives have now took place on Mount of women within the Product joined Gumutindo. Elgon which resulted in organization. Although arabica Quality is, indeed, first the deaths of 300 people half of the work of coffee 1748 coffee and foremost in the and the devastation of cultivation is done by hectares in 2010

Cooperatieve ontwikkeling twee profielen organization. Affiliated hundreds of farmers’ fields. women, they comprise only

60 61 Fairtrade Facebook Fans: “Stay cool : trade fair” Thea Prickett “Recommended ice cold, with a “Fairtrade warm heart for coffee farmers.” Frappuccino: Yvonne Helms The new standard” Felix Zekveld “Delicious/Fair “Fair frappachino: ice cold the most coffee on the rocks.” fair/delicious!” Marja Remesar Judith Schaaf “Real enjoyment!” Christa Visser-Timmerman “To be honest, this coffee is better than the rest…” Marrig van der Werf “Fairtrade iced coffee, cool by being honest ” Fleur Reuvers “Don’t let the coffee farmers out in the cold: drink Fairtrade!” Sandra Niks Fairtrade continues the significance of buying change are hard for small have reduced their CO2 Fairtrade. Through the farmers. Their harvests are emissions in the coffee advocacy of the Max under pressure because chain. The remaining Havelaar Foundation and Mother Nature doesn’t emissions are compensated Development is a process Netherlands. It’s important The people active at a local its partner organizations behave like she used to. when roasters purchase of small steps and to maintain this trend, even level play a key role in this in 30 countries, a small Some climate studies carbon rights from coffee perseverance – especially during years of crisis. support. Together they initiative has grown into a predict that certain areas farmers in Ethiopia at a fair for people who have had In order to achieve form a new global Fairtrade global organization – one will eventually become price. This is fair emissions few opportunities and growth, Fairtrade will movement. Their passion that works with almost structurally unfit for coffee trading - when the benefits have had to start from further intensify its extends to others, in places all multinationals and cultivation. end up precisely where they the bottom. Research of cooperation with industry. where a difference can be supermarket organizations. should. Fairtrade’s impact on the In 2012, Dutch sales made. These are people High volume growth is the All the more reason to coffee market shows just of Fairtrade certified in countries around the goal as this is largely what support farmers in taking The farmers earn these how much small farmers products increased by world, including our owny. determines the impact on measures to increase emissions rights through can accomplish on their 38%. Supermarkets and For example, in 2012, the farmers. their resilience to climate activities that help prevent own when they cooperate their suppliers led this Dutch ‘Fairtrade Town change, to add value to deforestation and by and when they’re supported growth. There are also Campaign’ counted a All of Fairtrade their coffee production working on increasing by fair trading conditions. still many opportunities total of 32 municipalities International’s affiliates and to diversify their the sustainability of their These are results to cherish with international coffee in its ranks. It’s also a pay close attention to income. For example, coffee crop. In this way, when celebrating 25 years roasters to have their high priority for the the costs they incur in farmers can vary their they kill several birds with of Max Havelaar. product certified as coming years to facilitate achieving Fairtrade’s economic base by planting one stone. This coffee and But it goes further – 25 Fairtrade and discussions the network of all those desired volumes. The new crops or learning these fair emission rights years is just a midpoint. are already underway energetic supporters who financial performance of other farming activities are available for purchase There are still many with several of them. make Fairtrade a success. these affiliates is monitored focused on producing food for anyone – businesses, opportunities and That large international through pre-defined – or perhaps even working organizations and challenges. Fairtrade’s companies are interested New markets are opening indicators. Knowledge is outside of agriculture consumers -- who want to three top priorities for in Fairtrade’s human- up mainly in India and power, so this monitoring altogether. fight against poverty and the coming years are as centered business model is Brazil. This is due to their helps ensure that quick Max Havelaar has a new for a better climate. follows: made clear by Fairtrade’s rapidly growing middle adjustments can be made initiative in which everyone partnership with Starbucks class, in which group as needed. can participate. In 2014, Continued Growth and Nespresso (since July the interest in fair and climate-neutral Fairtrade Innovation The more coffee sold under 2013). More players in the sustainable products is coffee will appear on the Climate Change the Fairtrade label, the industry are recognizing increasing. Dutch market. To begin more farmers benefit from the importance of working The effects of climate with, coffee roasters Fairtrade and the more with farmers and ensuring System costs reduced they can invest in new a good standard of living Every euro spent in the initiatives. A growth in for them in order to also Netherlands on Fairtrade The future begins today. Together with consumers, volume is a prerequisite for ensure a good quality doesn’t find its way to a further growth in reach and product. developing country. At social organizations, government, business, and, impact. Fairtrade has seen the same time, Fairtrade- positive growth for many Fairtrade’s success is based certified products can of course, the farmers themselves: Max Havelaar consecutive years, both on its strong support only be sold if the public Foundation is looking forward to many more years Fairtrade continues internationally and in the among the population. and industry understand of Fairtrade. 64 65 “Twenty-five years ago, Max Havelaar was a lone voice in the wilderness. Now, Fairtrade is a normal part of everyday life and socially-responsible concerns operating everywhere. Max Havelaar has made a huge contribution to these achievements and that’s something they can be proud of.” Jos Harmsen, Producer Relations, Max Havelaar Foundation Sources Used

Africa Now, Fair Trade Im- Eberhart, Nicolas (AVSF), FLO-Cert, Internal presenta- Stichting Max Havelaar, pact Assessment of Gikanda Sunthese d’etude d’impact tions and data (2012 en 2013). Ontwikkeling in eigen hand Farmers Cooperative Society du commerce équitable sur – De impact van Fairtrade Ltd (2010). les organisations et familles Hoff, van der, Frans & (2010). paysannes et leurs territoires Roozen, Nico, Fair trade AVSF, Síntesis del estudio dans la filière café des Yungas (2001). Stichting Max Havelaar, 18 sobre el impacto del comercio de Bolivie (2005). jaar Max Havelaar – Fair- justo en la Central Piurana de Jaffee, Daniel, ‘Better, but trade Labelling wordt volwas- Cafetaleros (Cepicafé) (2005). Fairtrade Foundation, How not great: The social and sen (2007). businesses are going further environmental benefits and Center for Evaluation, to make international supply limitations of Fair Trade for Stichting Max Havelaar, Saarbrücken, Assessing the chains work for smallholder indigenous coffee producers in Handel onder voorwaarden Impact of Fairtrade on Pover- farmers (2013). Oaxaca, Mexico’, in: Ruben, – 15 jaar koffie met het Max ty Reduction through Rural Ruerd, The Impact of Fair Havelaar Keurmerk (2003). development (2012). Fairtrade Foundation, A Trade (2008). review of the impact of Fair- Stichting Max Havelaar, Duval, Lise (Oréade- trade over the last ten years Natural Resources Institute Max Havelaar, koffie met Brèche), Estudio de los efectos (2010). (NRI), The last ten years: A toekomst (1989). y del impacto del comercio comprehensive review of the justo certificado en el Perú Fairtrade International, literature on the impact of Stichting Max Havelaar, y en República Domínica – Monitoring the scope and Fairtrade (2009). Statuten Max Havelaar (1988, Estudio de la organización benefits of Fairtrade (2012). 1996, 2007). de productores COCLA, Perú Max Havelaar France, The (2008). Fairtrade International, impact of Fairtrade labeling Stichting Max Havelaar, Internal presentations and on small-scale producers – Annual reports (1988 t/m Eberhart, Nicolas & Smith, data (2012 en 2013). Conclusions of the first studies 2012). Sally, A methodological guide (summary) (2009). for assessing the impact of Fair Trade Original, Veertig Ruben, Ruerd, The impact of Fairtrade (2008). jaar eerlijke koffie: verleden Smith, Sally, Understand- Fair Trade (2008). heden en toekomst, gebaseerd ing the impact of Fairtrade Eberhart, Nicolas (AVSF), op gesprekken met koffieboer- (Bijdrage aan Impact Day Vagneron, Isabelle & Impact du commerce équi- en en coöperaties van koepe- Stichting Max Havelaar, Roquigny, Solveig (CI- table chez les producteurs de lorganisatie Fedecocagua in April 2013). RAD), What do we really café en Equateur – Fapecafé Guatemala (2013). know about the impact of fair (2007). trade? (2011).

gebruikte bronnen

68 69 fairtrade Coffee Partners fairtrade Coffee Partners

70 71 Thanks to Two for Joy in Amsterdam and the baristas Mahir, Hanna and Andy for the delicious Fairtrade coffee and for the Colophon use of your location.

Concept and coordination Judith Verkuil Jenna Heysters Mirjam Groten

Text Jos Harmsen

Editorial Sanne Groot Koerkamp Bente Meindertsma

Design & graphics Diewertje van Wering

Photographs Tessa Jol

Styling Roos Rutjes Lisette Kreischer

This is a publication of the Max Havelaar Foundation, September 2013 Printing Colophon www.maxhavelaar.nl Wilco Printing & Binding

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