Does Fair Trade Coffee Really Help the Poor?

In his letter to the Philippians, Paul prayed that the Philippians’ love would abound “with knowledge and all discernment” (Phil 1:9) so that they would be able to “approve what is excellent, and so be pure and blameless for the day of Christ, filled with the fruit of righteousness that comes through Jesus Christ, to the glory and praise of God” (Phil 1:10). Paul’s ultimate concern was the purity and fruitfulness of Christ’s people, and love that was characterized by knowledge and discernment was a central aspect of this concern.

But Isn’t Love Enough?
We might be tempted to take Paul’s prayers in this passage as slightly, shall we say, superfluous? If we have love, then we’re good, right? Not necessarily. Without knowledge and discernment, our love can become misguided, misdirected, unhelpful, and actually work at cross-purposes with Christ and his will for the church. Without knowledge and discernment, we may set out to do some self-perceived good to another person that turns out to be useless at best or harmful at worst. Poverty care seems to be a field that is always fertile with this kind of unindented abuse.

Christians have a particular interest in poverty care. All throughout the Bible God commands his people to take care of the poor within the community and outside the community. It seems to go without saying that God’s commands coupled with our Spirit-wrought love for fellow image-bearers should compel us to give sustained thought and emotional energy to the topic of caring for the poor. When we hear that fair trade coffee is a means by which we can help relieve the financial burdens of the global poor, it makes sense that some of us would turn an interested ear to the conversation.

What is Fair Trade Coffee?
In your weekly (daily?) visits to Starbucks or your local roaster, you have probably encountered advertisements for fair trade coffee. Fair trade coffee costs a little more than your usual cup, but it’s worth it because your purchase is helping coffee growers throughout the world escape poverty. It just sounds good, too. I mean, even if you don’t know the first thing about economics, you’re pretty sure you believe in fair trade. What kind of jerk would promote unfair trade?

So, what is it? Fair trade coffee is a product that has been guaranteed by the Fair Trade Labelling Organization (FLO) to have met certain production standards. By placing their fair trade label on a bag of coffee beans, FLO is saying that this particular bag of coffee has been produced by individual or family growers that belong to a fair trade collective.

As members of this collective, these growers receive a guaranteed minimum price per pound of coffee produced as well as an extra fixed premium. If the world price of coffee falls, the growers in the fair trade collective still receive the fixed price plus the premium. If the price of coffee rises, the growers receive this higher price plus the premium. Fair trade has gained considerable social traction precisely because it is “perceived as a market-orientated solution to the problem of extreme global poverty” (Victor Claar, Fair Trade?, 29).

So, when you sip your fair trade brew, you are not only enjoying an excellent cup of coffee; you are, by paying a little extra, helping the global poor make their way out of poverty and attain a higher standard of living for themselves and their family. Sounds pretty good, right?

Well…

Is Buying Fair Trade Coffee an Act of Justice? 
One of the arguments that advocates make in favor of fair trade coffee is that it is an act of justice. You can feel the power of this assertion. If someone thinks they can actually effect justice in their choice of coffee, businesses have found that they are likely to pay a little extra for the fair trade option.

The moral force of this argument can constrain the consumer from the opposite direction as well: if I don’t buy fair trade coffee, I have rejected the opportunity to act with justice toward the global poor. Imagine the social pressure you might feel as you stand in line at Starbucks! Negatively: “What will the man behind me think if I order something other than fair trade coffee?” Positively: “The person behind me will admire my moral acuity and courage if I go with the fair trade coffee. That’s definitely worth the extra $0.75.”

But perception is one thing; reality is another. Is purchasing fair trade coffee really an act of justice? Some economic experts have argued that buying fair trade coffee is probably, at best, an act of kindness rather than an act of justice. In order for the purchase of fair trade coffee to be an act of justice, some specific injustice has to be repaired.

But there is nothing inherently unjust about “buying goods from someone selling them at a price the seller willingly accepts” (Claar, 31). The claim that the mere act of buying fair trade coffee repairs an inherently unjust situation among the poor appears to me to indict the entire global market; a problem that purchasing a certain kind of coffee simply cannot correct. Ironically, as we will see, the fair trade trend may actually be responsible for promoting injustice in its pursuit of correcting global inequities.

Keeping Poor Farmers Poor: The Law of Supply and Demand
Beyond this, it has been argued that the fair trade movement actually serves to keep poor farmers poor because it entices them, through the minimum payment guarantee, to remain in an industry that is now saturated with other coffee growers. Seeing the significant financial gain to be had in coffee production, countries once aloof this market have recently added it to their list of exports, thus increasing the amount of coffee available on a global scale. The truth is that global coffee prices have plummeted due to a massive growth in world-wide coffee production.

But remember what you learned in your college economics class? When the worldwide amount of coffee produced overshoots the amount of coffee people currently want (or can consume), prices go down. This worldwide phenomenon is “not because of injustice,” Jay Richards notes, “but because of supply and demand” (Money, Greed, and God, 41). When coffee prices dip, however, proponents of fair trade use this downturn as evidence that we need fair trade “now more than ever” (see Richards, 41). 

But this is to miss the point. If the market is saturated with growers and forcing prices down, it’s better to help poor coffee farmers find a different industry in which to prosper rather than enticing them to remain in a line of work that will keep them in the clutches of poverty.

Conclusion
I am not an economist by trade or by training, but as a Christian and a pastor, I am concerned with how the church responds to the call to care for the poor and how Christians can be most effective with the resources they’ve been entrusted. The fair trade movement appears to me to be a trendy, noble-sounding yet inherently wrong-headed attempt to care for the global poor. Many churches and individual Christians have linked themselves with this trend out of, I trust, a genuine desire to do some good in the world. I don’t doubt the sincerity of their intensions; but I wonder if the money and effort expended here could be better spent elsewhere.

Finally, it is best to remember that Scripture calls us to follow the priority of proximity when it comes to caring for the poor. In the case of fair trade, it is up for debate how much of your coffee purchases really make its way to coffee growers oversees. Anyway, you don’t know them, and you’ve never seen them, so it’s hard to know how much good you are actually doing. In the end, that doubly warm feeling you get when you sip on a fresh cup of fair trade coffee may be nothing more than physical enjoyment and emotional sentiment. Whatever the case, it is a poor substitute for genuine, hands-on love for one’s neighbor.

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