A Tale of Two Villages

15 Oct 2009

On the steep and rugged hillsides surrounding the neighbouring villages of Yagavila and Teotlasco in southern Mexico, farmers are growing coffee. Low prices have forced many families off the land, but many stay on producing coffee as their main cash crop, growing it alongside corn and other crops on their small family plots. There is nothing at all unusual about the setting; a typical coffee farm in this area is right on the national average size (2.5 hectares per family). Some of the families in the district have joined fair trade coffee producer co-operatives in a bid to improve their incomes and their lives, and many have not.

In their very ordinariness, the people of Yagavila and Teotlasco have become the central characters in the most comprehensive study into the impact of fair trade I've yet seen.

In a comprehensive four-year research project which has recently been concluded, American researcher Daniel Jaffee compared the financial, social and environmental situations of families in these two towns who have chosen to either join, or to remain outside of, co-operatives which sell coffee to the international fair trade market. The results of his research have been written up into Brewing Justice, an important resource book for anyone wishing to better understand the complexities of coffee production and of international trade.

Farmers in the area have two ways to sell their coffee; either they sell it to their co-operative (which in turn sells as much of it as it can into the certified fair trade market) or else they sell it to a local coyote, or street trader. Jaffees research blows away any simplistic comparison of cash-in-the-hand prices received by farmers through these two different channels by asking much deeper questions. Does it cost farmers more to produce fair trade coffee, and if so is this additional cost adequately offset by higher prices? Does selling coffee to fair traders help keep farmers on the land? Do fair trade farmers do a better job of protecting their environment than their non-fair trade neighbours?

Studying 50 families half of which are members of fair trade co-operatives, half of which are not Jaffee has reached a number of conclusions which reinforce the benefit of fair trade but also challenge fair trade to deliver more significant improvements to the farmers the system is designed to support. He found, for example, that all the farmers lost money during the study period the fair trade farmers were better off, but they made a loss all the same.

One example of the complexity of the situation: fair trade farmers are usually also organic certified, and in order to satisfy their organic requirements, they have to do a lot more work around their plots than do non-certified farmers; building walls that help to retain soil, weeding their plots, etc. Much of this work requires the help of paid labourers, and fair trade farmers pay triple the amount that those outside of fair trade do for this extra help. Fair trade farmers still receive a higher net income, despite these higher costs.

But nearly half of the non-fair trade farmers gained more income from a source other than their coffee; they got paid more for working as hired labourers on other peoples farms (presumably, largely from working on the farms of their fair trade neighbours). The net result? More money is flowing back into these communities through fair trade, but once within those communities it moves around more than many of us had appreciated. It helps to provide more local employment, even for farmers with no direct personal connection to fair trade.