What does LeafUp have to do with Fair Trade?
Reflections from a conversation with Daniel Fireside of Equal Exchange
The Context
I’ve had some conversations with roasters recently who have said that for them, “Fair Trade is dead.”
But, when I say that I’m working on a coffee sustainability startup to someone who doesn’t work in coffee, I often get this response: “Sustainability and coffee…you mean like Fair Trade?”
“Not exactly,” I say. “LeafUp helps coffee sellers become carbon neutral by reforesting smallholder coffee farms. Fair Trade does…a whole lot of other stuff.”
Beyond a price premium and a well known label, what is that other stuff? Is Fair Trade really dead? As a young organization looking to make a big impact in coffee sustainability, what should LeafUp’s position about Fair Trade be?
To answer these questions, I sat down with Daniel Fireside, Capital Coordinator of Equal Exchange. Fireside has been at Equal Exchange for over a decade, and was active within the Fair Trade movement long before that, so he has seen firsthand how it has changed and grown over time.
What I Learned
- Fair Trade has a lot of spillover benefits to farmers that are often misunderstood by critics. One of the biggest is strengthening smallholder cooperatives.
- Cooperatives can do a ton of good for smallholder farmers.
- As LeafUp scales, we will increasingly rely on strong cooperatives, and by extension the ecosystem that Fair Trade helps create.
Fair Trade Strengthens Cooperatives
To understand the role Fair Trade coffee can play in strengthening cooperatives, let’s take a quick trip to the world of cacao production in the Dominican Republic. According to Fireside,
“The Dominican Republic used to have four families that controlled all cacao exports, enforcing low farmer prices, with no organic production. Over the past two decades, with the support of Equal Exchange and other Fair Trade buyers, a 5th “family” has been created. It’s the CONACADO cooperative made up of thousands of smallholder farmers. It broke up an oligopoly, gave smallholders — even ones not part of cooperatives — real bargaining power, vastly increased organic farming, and has helped democratize the cacao economy there.”
The ecosystem of buyers, lenders, consumers, and other actors brought together through the Fair Trade system empowered smallholders, who were then able to disrupt an unreasonably consolidated market. It is no accident that almost all Fair Trade coffee is sourced from smallholder cooperatives as opposed to larger estates.
Good Cooperatives are a Great Thing for Farmers
Speaking to both farmers and cooperative administrators at origin, I’ve come to believe that there are good cooperatives and bad cooperatives. Some truly act in the best interests of smallholder farmers, while others end up becoming just one more middle man. Fireside walked us through what well-run, Fair Trade certified cooperatives were able to do for farmers during the Leaf Rust crisis a few years back. He said,
“Farmers who were part of well-run cooperatives were largely able to keep their kids in school thanks to scholarships from the co-ops. This was not at all the case for other farmers. It was pretty amazing. Co-ops provided extensive agricultural extension services to farmers like how to fight the fungus without violating their organic certification, new hardier trees that could still meet the specialty coffee market demands, and loans and grants to get through the 3-to-5 year period before those trees started producing coffee.”
LeafUp’s Position
So, after talking to Fireside, what is LeafUp’s position on Fair Trade? Personally, I was left wondering how something like LeafUp would function in a world where Fair Trade didn’t exist. Our mission is to help 1 million smallholders convert their farms to shade coffee systems by 2030. To reach that many farmers, we will rely on partnerships with strong, well run cooperatives. Without the market and supporting services created by the Fair Trade ecosystem, would cooperatives be as strong as they are today? Likely not.
Most criticisms of Fair Trade I’ve heard focus on the Fair Trade Standards themselves. “Is the price premium high enough?” “Is enforcement of the standards trustworthy and strict enough?” “Are the most vulnerable farmers really benefiting?” For LeafUp, these are still valid questions that need to be answered. However, on a more basic level, if we ask ourselves “Are things better on the whole for smallholder coffee farmers because Fair Trade exists,” the answer is overwhelmingly “YES!”
