Sunday, July 06, 2003

A new version of fair trade coffee is trying to go mainstream. The Utz Kapeh Foundation, a spin-off of Dutch grocery giant Ahold, thinks it can provide both for "basic standards for poor peasants hit by rock-bottom prices and inhumane living and working conditions" at a cost that will not make the coffee any more expensive than Maxwell House and Folgers. How does this magic work? Ahold "absorbs the slightly higher prices it pays to farmers."

"Slightly higher"? When the giants are paying slave wages or depression-era prices to peasant farmers, Ahold is going to make a difference through "slightly higher"? Currently the fair trade movement pays coffee farmers $1.26 per pound; composite coffee prices on July 3, per the International Coffee Organization, stood at $0.51 per pound. Utz Kapeh suggests it gives a "sustainability differential" of $0.07 per pound, raising the current market price to a whopping $0.58 per pound -- less than half what fair trade pays.

It was only five years ago that the market paid over $1.26 per pound. This is hardly a ridiculous price.

Some in the fair trade biz think this is at best "greenwashing" -- setting up a little Potemkin Village and trotting stockholders and consumers through it to convince them the corporation is a good citizen -- and at worst an attempt to undermine the ability of fair trade coffee to find a broader clientele. Funded as it is by Ahold, this scheme smells worse than the "NGO-industrial complex" outlined by Gary Gereffi, Ronie Garcia-Johnson, and Erika Sasser.

Is it better than nothing, however? Probably. But remember, Dean's Beans is better than Utz Kapeh every day of the week!

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