The Fair Trade system seeks to provide small coffee farmers a livable wage.

Coffee is the second most traded commodity in the world. However, unlike #1 Oil, coffee producers live in harsh poverty. Coffee farmers on average make less than $500 per year from their once-a-year harvest.

Economic conditions are so bad that farmers are often forced to pre-sell their coffee to so-called coyotes for a fraction of it’s worth or borrow money at exhorbinent interest rates.

Recently, coffee farmers have been hit especially hard with low prices. Basic coffee prices are set by trading at the New York Stock Exchange. The so-called C market for coffee sets a price for basic unroasted coffee. Specialty coffee (the type sold at most quality coffeehouses) sells for a premium above the C market.

Thus, speculators decide whether a Guatemalan farmer with less than an acre of coffee trees will be able to feed his family for the upcoming year. The market works efficiently to produce perverse results. When Vietnam — which was barely a player in the coffee market until a few years ago — suddenly flooded the market with coffee, prices dropped dramatically. The C price fell from a high of $2.00 per pound to a low of 30 cents.

The results of falling coffee prices have been dramatic on small farmers around the world: millions have fled their fields, others have stopped carrying for their crops while a few try to survive.

The term Fair Trade has become the politically correct buzz word in the coffee industry. On one hand, this is good because it brings attention to the difficulty small coffee farmers have in making a living. On the other hand, many talk more about Fair Trade than actually do anything about it.

We believe there is a difference between roasters who promote Fair Trade because it’s good marketing and those who support Fair Trade because it’s a good idea.

Many roasters (including most of the very big companies who make a big deal about their Fair Trade practices) only buy a fraction of their coffee at Fair Trade prices.

We believe there is a big difference between those who buy a token-amount of their coffee at Fair Trade prices and those who buy most or all at Fair Trade prices under Fair Trade principals.