Fair trade coffee

Fair trade coffee is coffee that is certified as having been produced to fair trade standards.

Fair trade organizations create trading partnerships that are based on dialogue, transparency and respect, that seeks greater equity in international trade. These partnerships contribute to sustainable development by offering better trading conditions to coffee bean farmers. Fair trade organizations are engaged actively in supporting producers and sustainable environmental farming practices. Fair trade practices prohibit child or forced labor.

Prior to fair trade, prices were regulated by the International Coffee Organization according to the regulations set forth by the International Coffee Agreement of 1962. The agreement, which was negotiated at the United Nations by the Coffee Study Group, set limits on the amount of coffee traded between countries so there would be no excess supply and consequent drop in price. The ICA existed for five years, and then was renewed in 1968.

The agreement was renegotiated in 1976 due to increasing coffee prices, largely a result of a severe frost in Brazil. The new agreement allowed for the suspension of price quotas if the supply of coffee could not meet the demand, and enabling them if prices dropped too low.

In 1983, the agreement was again redrawn, this time creating a database on coffee trade, and implementing stricter import and export regulations.

Fair trade certification was then introduced in 1988 following a coffee crisis in which the supply of coffee was greater than the demand; since no price quotas had been reimplemented by the International Coffee Act, the market was flooded. Launched in the Netherlands, fair trade certification aimed to artificially raise coffee prices in order to ensure growers sufficient wages to turn a profit. The original name of the organization was "Max Havelaar", after a fictional Dutch character who opposed the exploitation of coffee farmers by Dutch colonialists in the East Indies. The organization created a label for products that met certain wage standards.

Quotas remained a part of the agreement until 1989, when the organization was unable to negotiate a new agreement in time for the next year. It was decided that the 1983 agreement would be extended, but without the quotas because they had not yet been determined. A new agreement could not be negotiated until 1992.

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