chapter  4
21 Pages

Comparing fair and responsible coffee standards in East Africa: Ruerd Ruben and Simone Verkaart

ByRUERD RUBEN, SIMONE VERKAART

The last few decades have seen numerous efforts to introduce social justice and sustainability dimensions into international trade networks. Following initial steps to label Fair Trade products taken at the initiative of Northern civil society agencies, private companies have increasingly responded with efforts to include social, environmental and human rights concerns in their corporate business operations. Some critical voices claim that such corporate social responsibility (CSR) is merely ‘window dressing’ or a ‘green washing’ of a company’s image (Utting 2005; Doane 2005). Nonetheless, the acceptance and consistent enforcement of standards has effectively embedded CSR criteria within core corporate activities and entrepreneurial values. Coffee is one of the first commodities for which collective efforts were made to develop process standards that address socio-economic and sustainability concerns. The collapse of the International Coffee Agreement (ICA) in 1989 broadly coincided with a reshaping of the power balances within the coffee sector due to a rapid transformation towards an increasingly buyer-driven supply chain (Kolk 2005). Though some 70 per cent of coffee production is managed by smallholders, and approximately 25 million coffee farms in developing countries (involving up to 125 million people) are dependent on coffee, more than half of the world market is controlled by only five large roasters (Kraft, Nestlé, Proctor and Gamble, Sara Lee and Tchibo). While the value and prices of coffee in consuming countries has risen, the income of coffee-producing farmers in the South has plunged. Increasing public awareness of this situation paved the way for fundamentally challenging the existing coffee market configuration. In several countries, alternative trade organizations emerged in the late 1980s. These aimed to develop support systems and certification regimes to enhance direct access of smallholders to the market, reducing their dependency on intermediaries and guaranteeing a minimum selling price that covers production costs and ensures decent livelihoods. In addition, premiums were paid for investments in community activities. Fair Trade (FT) certified coffee volumes rapidly grew to reach 78,000 tonnes in 1990, representing roughly a quarter of all FT sales. However, Fair Trade coffee sales thereafter levelled off in most countries at no more than 2-3 per cent of the domestic market (Raynolds et al. 2007).