South African tea farmers, who formed the Heiveld co-operative in the Suid Bokkeveld, are among the Africans who have learned to play the game. Not satisfied with the low prices middlemen brokers paid, and the subsequent low wages they received for the long hours (up to 10-12 hour days) they worked on tea plantations, they formed a co-operative to sell directly to Fairtrade importers who pay fair prices. Their incomes tripled by dealing with companies, such as Lemonaid & Chari Tea.
Fairtrade certified co-operatives are a good fit with companies formed to satisfy health conscious consumers who are willing: 1) to pay a slightly higher price for products that use natural ingredients and 2) to treat all farmers fairly and with dignity. In the case of Lemonaid & Chari Tea, the company also set up a foundation which uses per bottle contributions from its specialty drinks to finance solar energy and education projects for co-operative members.
For coffee bean farmers, current conditions are not this favorable. Rising temperatures and, in some areas, unusual drenching high altitude rain associated with climate change have caused a decline in harvests and an increase in pests and widespread roya, a leaf rust fungus, in Central America and Africa. While several big coffee companies are helping farmers move to higher ground, move away from the equator, develop more resilient coffee plants, and diversify crops, most coffee growers are poor small scale farmers unable to mill and market their own coffee beans.
Since worldwide coffee demand is growing and coffee yields are shrinking, criminal gangs in Kenya and elsewhere have an incentive to overpower private security guards, pay off police guards, steal entire harvests from storage facilities, and sell stolen bags of beans to unscrupulous or unsuspecting middlemen.
Coffee plantations also have an incentive to scam coffee certification systems that are designed to recognize farms for good environmental, social, and economic practices. Inspectors for the Rainforest Alliance, the Netherlands' UTZ seal, and the Fairtrade International seal have failed to spot problems in Brazil, the world's largest coffee producer. When confronted, farm owners have been known to claim violations were corrected before a deadline, labor issues were resolved, and information about code non-conformities and improved conditions is confidential. Noted certification violations include: false pay deductions for absences, for pay advances and for days off and a failure to register seasonal workers and provide their required medical exams.
In some counties, government regulations requiring coffee marketers to provide sizable bank guarantees and to obtain export licenses have hampered the formation of coffee co-operatives that can sell directly to companies, such as Starbucks.
(An earlier post, "Coffee Prices Going Up; Allowances Going Down?" also addresses the coffee shortage.)
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