A Better Price for Coffee Farmers

The Fair Trade Labeling Organization International (FLO) has increased the price for Fair Trade Coffee! FLO sets the minimum price for Fair Trade coffee and, effective this June, increased the price to $1.25/lb. The price increase is the result of extensive field research into the real costs of sustainable coffee production, which indicated that an adjustment was needed. The research phase was followed by a review process through which feedback was provided by representatives of producers, consumers and industry from more than twenty countries around the world.

In addition to this base price for a pound of coffee, a $.10 per pound social premium is given back to the coffee cooperative for community projects like health and education. Also, a $.20 per pound premium is added for organic coffee to cover the higher costs of organic production.

Here’s the breakdown:

Former Fair Trade Per Pound Coffee Price

$1.21 coffee price

.10 social premium

$1.31

.20 organic premium

$1.51

June 2008 Coffee Price Increase

$1.25 coffee price

.10 social premium

$1.35

.20 organic premium

$1.55

It’s great to see the increase in the minimum price, but it’s also good to remember that it is a “minimum” price. Should the world market price rise above $1.25, the Fair Trade minimum price rises accordingly and becomes the world market price. While the world market coffee price can be volatile, the Fair Trade price minimum offers greater price stability and a sustainable income for farmers.

This entry was posted on Thursday, June 5th, 2008 and is filed under Certification, Coffee, Fair Trade . You can leave a response, or trackback from your own site.

A Better Price for Coffee Farmers

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