The Difference Alternative Trade Makes
Coffee as an agent of change? You mean it's not just a hot, mildly addictive brew?
That's what coffee becomes in the hands of alternative trading organizations (ATOs). The same goes for tea, bananas, and chocolate - as well as a growing variety of products traditionally grown only in the Third World, or South. Throughout the world, these small organizations are challenging how international trade is conducted - sometimes at the risk of lives and livelihoods.
Historically, developed countries have set the terms for how world commodities such as oil, minerals, and tropical foods are traded. Developing countries, as well as small-scale producers in those countries, had little choice but to accept the terms offered. Alternative trade is a way to address that inequity, not through charity but through the daily practices of international business. It's a way of using consumers' buying power to help producers help themselves.
Alternative traders have focused on coffee as their lever of change, a commodity in which setting up fairer trading relationships can make the most difference. Until 1989, when the world coffee price crashed to a 60-year low, coffee was the second largest commodity in the world after oil, and the industry was a major employer throughout Latin America, Asia and Africa. Now most farmers who have stayed in the coffee must struggle to cover their costs of production. Even though prices have risen in the past year, the producers can neither expect to see any benefits, nor count on prices staying high.
Meanwhile, in developed countries, consumers are more willing than ever to pay premium prices for high-quality coffee. Where does the money go? To retailers, roasters, exporters, processors, taxing agencies, creditors, and to a cast of middlemen known derisively as "coyotes". Speculators in the world's money markets also take their cut, as they bet on swings in coffee prices that have ranged from US$1.15 a pound in January of 1997 to $3.00 by the spring, and down to $1.90 by August. Less then ten percent of that price s goes to the farmers, upon whom coffee quality depends. And it's clear that they can't count on high prices to remain high long enough to break their cycle of poverty.
Alternative trade cuts out the middlemen in the export country. By setting up direct trading relationships with coffee-farming co-ops, ATO's can pay farmers a fair price: a price that guarantees farmers a living wage for their labour. Alternative trade is a radical departure from the way international trade has been conducted for centuries, and it is radically different from the usual solution offered up to help charity.
Alternative trade goes far beyond charity. Instead of making one-time donations that provide temporary assistance consumers create a stream of economic assistance by buying alternative-trade products when they shop. They use their dollars to vote for fair trade. Rather than making a donation to charity after the company's costs are covered after the sale is made and after profits are secured. ATO's give up-front in the form of premium prices for farmers' crops. Over time, the premiums pay farmers up to twice what they would have received n the open market. And that's the difference alternative trade makes.
