Fair trade research

Fairtrade research to go towards the body copy.

Coffee is big business and remains one of the most valuable primary products in world trade. However, for many of the world’s 25 million coffee farmers, coffee is a labour intensive crop that frequently yields very little financial return.

Coffee is also enormously valuable to the economies of many developing countries.  For some of the world’s Least Developed Countries, such as Burundi, the cultivation of coffee accounts for the majority of foreign exchange earnings, up to 80%.  Most of the coffee-dependent workers worldwide are in developing countries, especially Brazil, Vietnam, Colombia, Indonesia and Mexico, the largest exporters of coffee.

The history of coffee on the world market has always been characterized by its high price volatility.  This volatility prompted international governments to negotiate the first International Coffee Agreement to stabilize the coffee market in 1962.  Quotas were introduced so that excessive coffee supplies were withheld from the market and coffee consumption was promoted.

Fairtrade Standards for coffee act as a safety net against the unpredictable market. They provide security to coffee producers so that they will get a price that covers their average costs of sustainable production.

Fairtrade coffee producers are small family farms organized in cooperatives or associations which the farmers own and govern democratically.

Fairtrade Impact: 

The Fairtrade Premium is the sum of money paid on top of the agreed price for investment in social, environmental or economic development projects that meet the needs of producer groups.

Neknasi achieved Fairtrade Certification in May of 2011, and in December 2011, they received AUD 8,000 in Fairtrade Premium. The Board members report that Neknasi is developing a plan to use its first Fairtrade Premium to expand and improve its current water supply system to include coffee gardens close to members’ villages. In the near future, the cooperative will increase production levels as a result of their recent vehicle purchase and improvements in sustainable farm management practices such as weeding and pruning. The Board also reports that Neknasi has plans to increase association membership.  

Currently, Neknasi’s only export crop is coffee, however it is developing its vanilla production and hopes to export vanilla under Fairtrade Certification in the future.

In the future Neknasi plan to use the Premium to invest in the following problem areas::

•   High levels of illiteracy among farmers due to expensive school fees and the remote location of primary and secondary schools.

•   Endemic health issues such as malaria and complications during childbirth, and the corresponding  lack of sufficient medical supplies and convenient health centres.

•   Remote mountainous locations, which translate into high transport costs, lower prices to producers, and difficulties in achieving access to markets.