National Public Radio Weekend Edition
April 28, 2001

ANCHORS: SCOTT SIMON

REPORTERS: DANIEL ZWERDLING

SCOTT SIMON, host:

This is WEEKEND EDITION from NPR News. I'm Scott Simon.

When you drop by your local coffee shop...

Unidentified Man #1: Hi, how are you?

SIMON: ...do you ever think about farmers who grew that coffee thousands of miles away?

Unidentified Man #2: I need a grande mocha, non-fat, extra hot.

Unidentified Man #1: Grande mocha with whip and a non-fat mocha without?

SIMON: Or when you pay the bill...

Unidentified Man #1: $ 8.29.

SIMON: ...do you ever wonder how much of that money goes to those coffee farmers and their families?

Unidentified Man #1: What can I get for you?

SIMON: An international network of activists wants to see that wealth spread more evenly among coffee vendors, distributors and growers. And they say they've discovered a way for coffee drinkers to affect the global economy and transform farmers' lives, coffee with a special label marked Fair Trade. Daniel Zwerdling has this story for NPR News and American Radio Works.

DANIEL ZWERDLING reporting:

Let's go right to coffee country. Let's head to the mountains of Guatemala.

(Soundbite of horse hoof beats and horse whinny)

ZWERDLING: They grow some of the best coffee you can drink. It's late afternoon. The sun's already sinking behind the peak, and farmers are shuffling back down the slopes after a whole day picking beans.

(Soundbite of horses' whinnies)

ZWERDLING: So many pack horses. They're mangy animals; you can count every single rib. The farmers tie the reins to trees next to the village warehouse and they unload their burlap sacks.

(Soundbite of muffled conversations)

ZWERDLING: A lot of farmers can't afford a horse. One man's staggering down the dirt path. He's lugging more than 50 pounds of coffee on his own back. My interpreter translates.

Unidentified Man #3: (Through Translator) Sometimes we do a hundred pounds or more. You come here sweating, really sweating.

ZWERDLING: You don't have to be an economist to see that growing coffee here doesn't buy much of a life. Picture the farmers' homes on the hillsides. They're shacks. The floors are bare dirt. There's no running water or electricity. The outside walls are thin wooden planks, and it gets cold here up in the mountains.

The world's coffee prices go up and down, depending partly on supply and demand and speculation by big investors. But these farmers are stuck in poverty. They sell their beans to local businessmen whom they derisively call 'coyotes,' and the coyotes pay them less than 50 cents per pound. At that price, the farmers can barely make a few hundred dollars a year.

Unidentified Man #4: (Through Translator) I mean, to produce coffee it's expensive. It's a lot of work, and sometimes we can't even cover our costs.

ZWERDLING: Can I ask all of you something? Do you know how much somebody like me pays for your coffee when I go to my local coffee shop in Washington, DC?

(Soundbite of unidentified men speaking in Spanish)

Unidentified Translator: No, we don't know.

ZWERDLING: So I tell them the foreign stores typically sell Guatemalan coffee for at least $ 9 per pound, compared to the 50 cents they get for growing it; and the farmers just stand there, looking puzzled. Then one of them pulls a calculator out of his pocket. It's so dirty and scratched you can hardly see through the screen. And the interpreter helps him convert dollars into local quetzals. The farmers gasp when they hear the price.

Unidentified Translator: They're just amazed at how much a consumer pays for it, and they keep just saying, 6,600-something-something quetzals, like they're repeating it over and over again. It's an enormous difference from what they actually get. It's a huge amount of money.

ZWERDLING: These farmers are the poorest and most powerless part of the global coffee trade, and it's a massive industry. The world trades more coffee than any commodity except petroleum and illegal drugs. But the farmers say they don't know what happens to their beans once they sell them to the coyote.. They don't realize that he sells them to a processor, then the processor might sell them to an exporter. The exporter ships the beans to an importer in another country like the United States. The importer sells them to a roaster. The roaster sells them to a coffee shop, which sells the coffee to you; and everybody makes a healthy profit along the way, except the small farmers who grow it.

(Soundbite of horse whinny)

ZWERDLING: Now activists have devised a cure that they call the Fair Trade system. They say it can help farmers make more money than ever before and flex some power over their lives.

(Soundbite of moving vehicle)

ZWERDLING: On a recent morning, we join one of the system's organizers, a man named Guillermo DiNouks(ph). He's heading to a meeting with some Fair Trade farmers to see how things are going, and that means that his four-wheel-drive car is straining to climb an insane path next to a cliff way up in Guatemala's mountains.

'See that peak?' he says, and he points to a range that's all jungly and partly hidden by clouds. 'The farmer's village is in those clouds.'

Mr. GUILLERMO DiNOUKS (Fair Trade Organizer): It's the end of the world. There is no more village further away; it's impossible.

ZWERDLING: A group of European activists founded Fair Trade in the late 1980s. The program spread to the United States a few years ago. And here's how it works. First, they've signed up roughly 300 groups of coffee farmers from Indonesia to Peru. They'll only sign up small family farmers who'll market their coffee together in community co-ops; no corporate plantations allowed. Second, they figured out how much money a typical farmer needs to support a family of five: decent food, clothes, kids in school, health care. And then the system basically guarantees that the farmers can sell their coffee for enough money per pound to achieve that.

How? Well, the companies that sell Fair Trade coffee to you at your local cafe buy it almost directly from the farmers who grow it. DiNouks says the network cuts out the middlemen who traditionally siphon off farmers' profits.

Mr. DiNOUKS: Their whole lives they depended on the intermediaries to buy the coffee at the very low price. So once you can become independent of those intermediaries and the money they normally earn from your coffee, get it in your own pocket, for them it's very important.

ZWERDLING: Still, the Fair Trade network can't raise all the money that farmers need just by cutting out middlemen. Consumers have to help, too. You pay at least 10 percent extra for Fair Trade brands.

(Soundbite of muffled conversation in Spanish)

ZWERDLING: But now DiNouks has finally arrived at the village of Penglo Nueva(ph), behind the clouds. He's three hours late, but dozens of farmers and their wives are waiting in the meeting hall at the edge of a dirt clearing next to a tiny pink church. They form an impromptu receiving line to shake his hand.

(Soundbite of talking in Spanish)

Mr. DiNOUKS: (Spanish spoken)

ZWERDLING: The villagers are Mayans, and the women are wearing their traditional riot of colors, woolen skirts and blouses and jackets embroidered with orange flowers and pink trees and purple birds. DiNouks walks to the front of the room next to the big wooden crucifix and he begins the meeting.

(Soundbite of applause)

Mr. DiNOUKS: (Spanish spoken)

Unidentified People: (Spanish spoken)

ZWERDLING: After he loosens up the crowd, Guillermo DiNouks reminds them what he does.

Mr. DiNOUKS: (Spanish spoken)

ZWERDLING: He comes from Belgium, but he spends his life going from village to village. He signs up farmers in the Fair Trade system and then inspects them every year to make sure they're following the system's rules, which is why he's here today. These farmers tell him they like Fair Trade. They're getting twice as much money for their coffee as regular farmers are getting down the road.

Mr. SOKA YIM (Coffee Farmer): (Spanish spoken)

Unidentified Translator: Soka Yim(ph) is asking, 'So how is it possible, you getting double? Who's paying for you? Someone has to pay for this.'

Mr. YIM: (Spanish spoken)

Unidentified Translator: 'What I want to know is who's helping? Who's the fool who's paying more?'

(Soundbite of talking in Spanish)

Unidentified Translator: So the man says the truth is really that we don't know who's paying more.

ZWERDLING: DiNouks will tell you privately that farmers can't control their lives until they understand how their business works. So he goes to a white plastic board on the wall. He picks up a black marker, and he draws the Fair Trade system with circles. Farmers here, consumers there, the network in between. And DiNouks tells the farmers, 'Consumers who buy Fair Trade coffee are willing to pay you more because they want you to have better lives.' He tells the farmers, 'So that means you have to run your business right.'

Mr. DiNOUKS: (Through Translator) So one little question: Are you keeping your books? Or do you work without books? No, I'm serious. Do you have your accounting books?

ZWERDLING: As it turns out, no, they don't keep accounting books. Traditionally, corruption has plagued every level of business in Central America, and the Fair Trade system wants to teach farmers to fight that. The members of this co-op have elected some managers. They're the ones who actually take in the coffee money and hand it out to the farmers. DiNouks tells everybody, 'Look, I'm sure your managers are honest, but you have to be able to prove it..'

Mr. DiNOUKS: (Spanish spoken)

Unidentified Translator: Guillermo asks, 'So isn't it important for you to know your expenses? Where has the money gone? Don't you want to know that?' And several responded, 'Yes. Yes, we want to know.' So Guillermo says, 'But nobody knows. You have to know.'

ZWERDLING: In fact, the Fair Trade system kicked out a group of farmers last year because they didn't keep good books. Finally, the farmers say they understand. They'll ask somebody who's been to school to help them start an accounting system. And the meeting's over.

(Soundbite of applause)

ZWERDLING: The activists who run the Fair Trade network don't have rules about how the farmers spend their extra money. The farmers in this co-op are funding a business project for their wives so the women can raise livestock and make clothes and sell them. It's the first time that women in this village have ever earned and controlled their own money. Farmers in another co-op have just built their own coffee factory. They're planning to use the profits to build a health clinic and a school. And a lot of Fair Trade farmers are joining the world of consumers.

(Soundbite of pounding)

ZWERDLING: We meet Ramondo Nicholas at his coffee farm just after sunrise.

(Soundbite of child crying)

ZWERDLING: His wife has been up since 4 AM slapping out the day's tortillas.. As soon as Nicholas and his two sons have eaten a stack, along with some black beans, they head down the hill into their trees. Each coffee tree is about 12 feet high. They're dense with shiny green leaves and the branches are covered with clusters of bright red berries. The little coffee beans that you'd recognize are hidden inside that red pulp. Nicholas snaps the berries and tosses them into a bucket. He says now that he's making more money selling Fair Trade coffee, he's buying things that his family never dreamed possible. They just got their first television. They live close enough to town to get power.

Mr. RAMONDO NICHOLAS (Coffee Farmer): (Through Translator) It's a big TV. It's about 20 inches. It's a color TV.

Unidentified Translator: (Spanish spoken)

Mr. NICHOLAS: (Through Translator) I also bought my bed, the bed where I am sleeping now. I was able to buy all these things.

ZWERDLING: The Fair Trade system never could have existed a dozen years ago in Guatemala or most of Central America. This is a grassroots campaign to give poor farmers more power, and the dictators who ruled this region have activists tortured and killed for less. These days the civil wars are over. There's basically no more terrorism, so there's room for Fair Trade to take root, but there's at least one big obstacle that's preventing more farmers from getting involved.

Unidentified Man #5: You all ready...

ZWERDLING: Coffee companies in the United States aren't selling much Fair Trade coffee.

Unidentified Man #5: You all ready to let Starbucks know that we're here and we ain't going away?

ZWERDLING: A few dozen chanters have gathered on the sidewalk in downtown Seattle outside Symphony Hall. Inside the auditorium, executives of the Starbucks chain are holding their annual shareholders meeting. They're celebrating the fact that the company's stock has tripled in the past five years, but these protesters are threatening to pop the company's bubble.

Unidentified Man #5: Now I want to hear everybody singing. In unity there's strength. Together we're beautiful, OK?

(Singing) We shall not, we shall not be moved.

ZWERDLING: Early last year just after riots almost shut down the World Trade meeting in Seattle, a group of activists went to Starbucks and said, 'Either start selling Fair Trades coffee or we'll boycott all of your stores.' A few days before the boycott was supposed to begin, Starbucks executives suddenly said, 'OK, OK, we'll do it.' And Starbucks began carrying Fair Trade coffee. In fact, the company's planning to launch a special ad campaign to promote it in the next few weeks. But these protesters say that's a public relations gimmick.

Unidentified Woman #1: I was at Starbucks this weekend, and the Fair Trade coffee was tucked away in the back almost out of sight. Does Starbucks ever intend to comply?

Group of Protesters: No!

ZWERDLING: So now consumer activists around the country are talking boycott again unless Starbucks sells a lot more Fair Trade coffee.

(Soundbite of drum beat and applause)

ZWERDLING: The president of Starbucks says this is nonsense. His name is Orin Smith. We talk in his office, which looks out at Seattle's entire skyline and look down at its harbor. Smith says he supports the Fair Trade philosophy, partly because it feels right. He's visited coffee country. He says he's seen that hardly any of the money Starbucks pays for its beans ever trickles down to the farmers.

Mr. ORIN SMITH (President, Starbucks): The hardest thing to see are the little kids. There's not a lot for them to look forward to. The people in these countries are challenged to feed themselves, to clothe their family, to give them any kind of an education. This is an incredibly marginal existence that these people live. And I think that anyone who sees that kind of a situation has to be really torn.

ZWERDLING: And Smith supports the Fair Trade idea, partly for business reasons. He says small family farmers produce most of the coffee that Starbucks buys, so if they can't make a living and stop growing it, what'll happen to Starbucks?

So it might sound contradictory when Smith concedes that the protesters do have a point. He says it's true, Starbucks buys a miniscule amount of its coffee from the Fair Trade system, less than 1/10th of 1 percent of everything Starbucks buys. But he says don't blame the company for that. He says the problem is Fair Trade activists are trying to sell coffee that's not always very good.

Mr. SMITH: And I would challenge them: They provide us with the quality of coffee that we're looking for instead of blowing their horns, we'll take it. There is no logical reason why I would turn down Fair Trade coffee. That makes no sense because I have no motive.

ZWERDLING: And some Fair Trade organizers concede they do have problems with quality. Some of their farmers are still learning how to wash the beans after harvest and then ferment them and dry them just right so they get that deep flavor.

In a way, all this sounds like the debate you used to hear in the supermarket industry about organic vegetables. The best organic farmers grew great-looking lettuce, though worm-eaten stuff made executives cautious. Still, the Fair Trade philosophy is slowly joining the mainstream. Almost a hundred companies have begun selling small amounts of Fair Trade coffee here in the United States, including some Safeway supermarkets and Sara Lee. You know Sara Lee, that's the company that sells Chock Full O'Nuts. And stores in Europe are selling Fair Trade bananas and sugar. Coffee is just the beginning.

(Soundbite of coffee beans being ground)

ZWERDLING: Eventually, the biggest stumbling block in the Fair Trade movement might be consumers. They have to make the final choice when they step up to the coffee counter, like this one in a building lobby in Seattle.

Unidentified Woman #2: Hi. Can I have a tall, non-fat...

ZWERDLING: Are you familiar with Fair Trade coffee?

Unidentified Man #6: No, I'm not. Is that a new brand?

ZWERDLING: When I asked one woman, 'Is it important to support Fair Trade coffee? Do you feel concerned how farmers live?' She shrugs.

Unidentified Woman #3: One needs to choose--you have only so much time in your life, and so you need to choose your issues. You need to choose the things that you want to be passionate about, the things you want to care about, give your money to, give your attention to. And quite honestly, this is not one of those issues.

ZWERDLING: Daniel Zwerdling for NPR News and American Radio Works.

(Soundbite of coffee machine)

SIMON: American Radio Works is the documentary project of Minnesota Public Radio and NPR News. This is WEEKEND EDITION. I'm Scott Simon.