Peru’s Fairtrade coffee in question

This article was adopted from a Financial Times report by Hal Weitzman published September 10.

(LIP-nk) – Farmers in Peru — the world’s number one exporter of Fairtrade coffee — are not properly following the label’s ethical guidelines, according to an article by the Financial Times.

Fairtrade coffee accounts for 2% of the global coffee trade, and is supposed to be produced following environmental, social, and labor standards set by the international certification body, Fairtrade Labeling Organizations International (FLO).

But the Financial Times (FT) found that four out of five FairTrade farms it visited in Peru are paying their workers substandard wages.

In addition, industry insiders told the UK-based newspaper that not only is some non-certified coffee being exported as Fairtrade, but some certified coffee is being planted in rainforests protected by the law.

"No certifier can guarantee they will purchase 100% of a cooperative’s production, so how can they guarantee that every bag will be produced according to their (Fairtrade) standards?" a board member of one Peruvian Fairtrade-certified coffee producer told the FT.

Certified coffee has become a hit with large companies like Starbucks and McDonald’s, but this report casts the popular label in doubt.

In response to FT’s September 10 article by Hal Weitzman, the UK’s member of the 20-country Labeling Organization FLO, the Fairtrade Foundation, issued a brief statement last week.

"The Fairtrade system takes very seriously the issues raised by Hal Weitzman," but believes the article overstated the extent of the problem, said Harriet Lamb, executive director of the Foundation.

The Foundation also sent a request to the FT asking for the more information about the farms visited by its reporter so that it could investigate the issue in-depth.

According to Weitzman’s article, each of the five farms he visited hires 12 to 20 casual coffee pickers during the harvest season. All house and feed their workers, which allows them to deduct 30% from their wages.

After that reduction from the legal daily minimum wage for casual agricultural workers of 16 soles (about $5), farm owners are still obliged to pay at least 11.20 soles a day. In four of the five farms visited, pickers received 10 soles a day, while the other farm paid workers 12 soles a day.

Luuk Zonneveld, managing director of Fairtrade Labeling Organizations International, the Bonn-based body that sets fair trade standards, said the certification system "is not fool- and leakproof" but said the problem should be put in context.

"Poor farmers often struggle to pay their workers fairly," he said. "Why are casual laborers there at all? There are wider issues here. We need to ask why this goes on and what we can do to help."

A number of industry insiders said they had also witnessed fraud within the certification system that resulted in coffee from uncertified sources being exported as Fairtrade.

The Financial Times has also been told of Fairtrade coffee being planted in national forest land in the Peruvian jungle.

Using satellite mapping, a Canadian nongovernmental organization found that about one-fifth of all coffee production in one Fairtrade-certified association was illegally planted in protected virgin rain forests.