Fair Trade USA freezes coffee prices and premiums until the end of 2023

Fair Trade USA’s minimum pricing will remain $1.40 per pound for arabica coffee and $1.05 per pound for robusta | Photo credit: Katya Ross

Fair Trade USA has controversially announced a freeze on its current minimum pricing and premiums for all coffee sold under its Fair Trade Certified label through 2023. 
 

Founded in 1998, Fair Trade USA operated under the Fairtrade International umbrella until 2011, when it branched off to grow ‘the impact of the fair trade movement to new products, geographies, and producers’. 

In March 2023 Fairtrade International announced it would increase its Minimum Price for coffee from August 2023 to offer a ‘safety net’ for coffee farmers grappling with high inflation, rising production costs and erratic market prices. 

Fairtrade International’s baseline price for arabica coffee, which represents more than 80% of all Fairtrade coffee sold, will increase 29% to $1.80 per pound, while the price of robusta will rise 19% to $1.20 per pound.     

The additional price of organic Fairtrade coffee will increase 33%, from $0.30 to $0.40 per pound.   

However, Fair Trade USA said it had previously adopted the same price model as Fairtrade International on a ‘voluntary’ basis and is not required to follow its lead. 

The non-profit’s minimum pricing will remain $1.40 per pound for arabica coffee and $1.05 per pound for robusta. Fair Trade USA’s social premium ($0.20 per pound) and organic differential ($0.30 per pound) will also remain the same. 

Following Fairtrade International’s announcement, Fair Trade USA conducted its own stakeholder consultation in April 2023, the findings of which will be released in the coming weeks. 

“Through our recent listening tour, we heard clearly from stakeholders that to grow our impact for farmers, workers, companies, and consumers, we need to innovate and renew the Fair Trade coffee model. The time is now,” said Paul Rice, Founder & CEO, Fair Trade USA. 

However, more than 600 Fairtrade coffee producer organisations from around the world have appealed to Fair Trade USA to reconsider its decision. In a joint statement they said the ‘deeply regretable’ move will force producers to sell coffee below the cost of production. 

“As producer organisations and networks, we always have accompanied fair price setting with programmes and projects, but fair purchasing practices and prices are the basis and condition for social and environmental justice,” said Marike de Peña, Chair of the Latin American and Caribbean Network of Small Producer Organizations (CLAC).

“Projects and programmes are no substitute for sustainable pricing. Both are key in achieving our ambitious 2030 goals,” she added.

While not ruling out a Minimum Price increase next year, Fair Trade USA said it will instead focus on building a ‘more scalable, higher-impact Fair Trade Certified programme’. 

The California-based non-profit has launched a multi-stakeholder Innovation for Impact Initiative which it said places a more holistic focus on the well-being of coffee farmers and the value of fair trade to the wider coffee industry. 

To ‘guide and support’ the initiative, Fair Trade USA will form a Coffee Impact Advisory Board. Confirmed members include Rüdiger Meyer, the founder and former CEO of FLOCERT, as Chair, alongside Lindsey Bolger, former Managing Director of Keurig Trading, Carlos Vargas, General Manager of CoopeTarrazú, the largest fair trade coffee cooperative in Costa Rica, and Guido Fernandez, Executive Vice President of the Colombian Coffee Federation.  

Many of the producers that sell fair trade products to Fair Trade USA affiliated buyers in the US also sell products to Fairtrade International buyers.