ARTICLES

Don't Roll Over on This Stuff

Fair Trade -- A Way to Fight World Poverty

BY CHRISTOPHER ZEHNDER

It seems a noble endeavor, and like most noble endeavors, it is unprofitable and apparently insignificant. But God, who chooses the humble to confound the strong and raises the poor man from the dung heap may yet use it to help end poverty in the Third World.

I am speaking of selling coffee.

Not Starbucks selling coffee, nor Peet's, but a fellow in Gilroy who doesn't even own a café. Until very recently, few would have associated Mike Malone with the coffee trade, wholesale or retail. Until last year, even Malone, who operates his own courier service, did not see himself as dealing in beans of any kind. But then he heard that Catholic Relief Services was linking up with a group called Equal Exchange, which deals in Fair Trade products, to bring those products to Catholic parishes and organizations. One of the Fair trade products is coffee.

But what is Fair Trade coffee?

Malone said that when he first heard of the Catholic Relief Services/Equal Exchange partnership, he did some research on Fair Trade. "I thought it was such a great idea and such a noble cause, because it directly ties into Catholic social teaching, in terms of environmental stewardship, in terms of trying to promote the dignity of each person." Fair Trade, said Malone, seeks to address injustices often brought about by free (not fair) trade in Mexico and Central America, where small, family coffee growers receive very low prices for their harvests. These farmers often lose their land to foreign corporate interests or those in their own country; and, with no other alternatives, they either swell the population in the cities or emigrate to the United States.

Fair Trade seeks to assure these farmers just prices for their harvests. First, Fair Trade importing companies in Europe and North America help farmers in developing countries to organize themselves into cooperatives. "These cooperatives, said Malone, are "like a corporation where the members are like shareholders." The members elect a board of directors, which appoints its officers. The cooperative also establishes its own rules and guidelines. "It's not that a Fair Trade company comes along and says, well, here's how you have to operate," Malone said. "But the concept is that the individual farmer by participating in a Fair Trade co-op has more economic umph as an association as opposed to the farmer himself individually trying to sell his product, for which, unfortunately, he has to take what's given to him."

Another advantage of the cooperative system for the farmer, Malone said, is that since coffee harvests happen only a couple of times a year, "the farmer needs to have credit to tide him over from when the crops aren't being harvested, and that's what Fair Trade also does. They can assist the farmer with short term credit to get him from one harvest to another, as opposed to a feast or famine type approach."

On its part, the Fair Trade importer assures the farmer a certain base price, so that the farmer and his family can make enough money to live. "Typically," said Malone, "the price paid by the Fair Trade importer is much higher than the world market price." According to David Funkhouser, strategic outreach coordinator for TransFair USA, a Fair Trade distributor, for coffee, farmers in Central America, Mexico, and Africa are guaranteed $1.26 per pound of coffee; but if it's grown organically, they get $1.41 per pound -- both about twice the current market price. Farmers in South America and the Caribbean receive, respectively for conventional and organic coffee, $1.24 and $1.39 per pound. If, on the rare occasion, the market price equals or exceeds the Fair Trade price, a Fair Trade company will pay five cents a pound above the prevailing market price for conventionally grown coffee, but for organic coffee, 15 cents per pound over and above the fixed five cent premium for conventionally grown coffee.

The money is paid directly to the cooperative, whose members vote on how to distribute the profits. Some, of course, goes to the farmers themselves, but the cooperative may vote to use the money it earns in building clinics, schools, or other projects from which the members of the cooperative can benefit.

In this country, Fair Trade products (which include more than coffee -- chocolate, pineapples, tea, bananas, and others) are marketed through groups like Equal Exchange. The distribution, however, is not done on the open market but through churches and organizations like Audubon. In its partnership with Catholic Relief Services, Equal Exchange sells coffee, for instance, to parishes or Catholic organizations, who then, in turn, sell it to their members.

Malone said he promotes the Catholic Relief Services Fair Trade program "through the participation of parishes, youth groups, campus ministries, or schools. I encourage those entities to check out the Catholic Relief Services website and purchase through the program directly. The program was set up basically so that the product goes from the cooperative to the importing company (Equal Exchange), then directly to an end user." The fact that some organizations would not want to "tackle the Internet ordering" gave Malone the idea to start Integrity Express. For these groups, Integrity Express "would order the coffee also and have it available for them. If they want to order by the pound, they can do that, rather than ordering by the case, with the lag time and all that. So I wanted to make it convenient for them."

And Malone also offers other Fair Trade products besides coffee -- those "not necessarily related to Catholic Relief Services," Malone said. "Coffee is easy to talk about, because it is a big product, but I get involved in olive oil and cashews, and a lot of chocolate."

But is Malone making any money off of Integrity Express? "No. Maybe someday," he said. "There's enough volume, even in the coffee sector, that someone can make a living off it. It's a venture that I hope will become profitable. But the more important thing for me is making people aware of what's going on out there. If I am able to make people aware of issues around the world, how they can do something... The small things we do can make a difference. We can't let the next generation say, 'we don't have enough economic power to do anything, so we're just going to roll over on this stuff.' We just can't allow that to happen."

Malone said, what is "going on out there" is poverty. "How do you break the cycle of poverty?" he asked. "In Catholic teaching, we encourage people to be charitable, in terms of our abundance in the United States. But also we encourage people to do advocacy. It's O.K. to write a check, but you also have to understand why people are in poverty; how can they break this cycle of poverty. That's more a structural issue. The two pillars of social justice are the charitable side and the advocacy side. It's great that we are able to help out the Haitian people, for instance; but they've had poverty down there for years and years. How do you address those longer-term and more entrenched issues? Fair Trade is an idea that does structural change. It provides these folks with incentives to produce good quality products and receive a reasonable rate of return for their efforts. The concept is to try to get these people into a system where they are not as individuals or small families just basically hanging on by a thread."

To further address these structural issues, Malone has joined a group called Coffee Kids. This organization, he said, works to keep families in Third World countries together. "What happens," said Malone, "is that in coffee and chocolate growing countries, if families are not making it economically, a lot of times they fall apart. In the case of Central America, sometimes the dad or the sons or the whole family try to immigrate to the United States. Or, the biggest problem in Central America is gangs. Kids are just disillusioned; there is so little hope for them making it financially that they get involved in drugs. There's money, and they can get some products and live a higher lifestyle if they get involved with the drug trade. Coffee Kids stresses that the goal is to keep the family sustainable, and they [Coffee Kids] do that not only by encouraging Fair Trade pricing, but also by encouraging the farmers to grow alternative products so that they are not so reliant on just one thing. If the coffee is destroyed, they have an alternative -- maybe a craft system, maybe they've made enough money that they are able to open a little general store, etc."

I spoke to Thomas Storck, a Maryland-based writer known for his articles and books (such as Foundations of a Catholic Political Order) on Catholic social teaching. Since Storck has especially defended the economic idea of distributism -- a system based on the widespread ownership of private, productive property (farms, stores, manufacturing concerns, etc.) I asked him how or whether Fair Trade falls within the distributist paradigm. Storck said it does, since it "entails the ownership of the means of production (farms and the cooperative) by the producers."

Storck said he sees distributism, which was promoted by the Englishmen Hilaire Belloc and G.K. Chesterton among others, as "one application of Catholic social teaching that emphasizes certain aspects of that teaching." But there have been other schools of thought. For instance, there was the Jesuit Heinrich Pesch and the whole 20th century continental school that, said Storck, "did not emphasize well-distributed property so much as just wages and worker participation in management." But neither did they deny the importance of well-distributed property -- "there is a wonderful passage from Pesch on that subject," said Storck.

Neither did the English distributists deny the concerns of the continental school; they simply "emphasized well-distributed property and the ideal of everyone being a sole proprietor." Further, Belloc in Restoration of Property, said Storck, "talks about the necessity of establishing occupational groups -- guilds --when you have a distributist order in place." As it existed in medieval Europe, a guild was an association governed by its members, the small proprietors who comprised it. The guild oversaw such concerns as just price, product quality, provision for members when sick or for families when a member died, as well as promoting the religious life of its members.

A cooperative, to some degree, fits the character of a guild, except that, in guilds, profits flowed not to the guild and then to its members, but directly to the members themselves. But, Storck pointed out, communal property is not foreign to a Catholic ethos; in the Middle Ages, property on a manor was often held collectively. And, Pope Pius XI, in defending private property in his encyclical Quadragesimo Anno, noted that private property has taken many forms throughout history. "How varied are the forms which the right of property has assumed!" Pius wrote. "First, the primitive form in use amongst the rude and savage peoples ... then that of the patriarchal age; later came various tyrannical types (We use the word in its classical meaning); finally, the feudal and monarchic systems down to the varieties of more recent times."

In addition, given that the modern economy is based on trade between countries, "you would certainly want to have fair trade," Storck said. "The market is not the reliable interpreter of anything, except who has power." But Fair Trade, where farmers rely on international trade, is imperfect from a distributist perspective. As long as farmers are dependent on one crop for export, Storck said, "we have to give them fair trade; but in the long run it would be better if they turned some of that land into growing [other crops], so they wouldn't have to be dependent on exporting coffee."

And, so they can have a more locally-based, self-sufficient economy.

"I remember [E.F.] Schumacher [author of the book, Small is Beautiful] says one should try to see how much can be produced locally, rather than how little. I think that's true," said Storck. "I think you should see if you could make a region self-supporting, more or less."

But, for Storck, there is a role for trade, albeit a limited one. "St. Thomas Aquinas says that differences of climate, soil, weather, and the fact that certain things won't grow in certain places, indicates God ordained a certain role for trade." However, St. Thomas held trade under some suspicion, not only, said Storck, because "it is not primarily productive, but because it's a tremendous temptation. Just like the possession of riches, though it is not in itself an evil, is always an occasion of sin; similarly with trade, you can make big profits, but there's always a temptation to engage in shenanigans and make bigger profits, and profits you have no right to." Besides, reliance on trade ties a country to the "vagaries of the market," which can be highly unstable, especially for poorer countries.

Mike Malone to some extent seemed to share Storck's concerns about trade. Free trade, at least, Malone said, "is where the big guys tell the little guys how the game is going to be played." Fair trade, however, is the attempt to "even up this relationship."

But Malone also sees Fair Trade as a way to call people's attention to greater local self-reliance. He invoked a principle enunciated by the popes -- subsidiarity -- which, Malone called "the idea that decisions that can be made at the smaller, more local level should be made at that level. What's happening in our culture is that more and more decisions are being made up the ladder." We need to reverse this trend, Malone said. "In agriculture, we need to support our farmers markets. It doesn't make sense for people to buy, say, apple juice from Washington state when we have just as good organic apple juice out of Watsonville."

Malone said that in promoting Fair Trade, he uses the principle of subsidiarity "to encourage people to support local businesses and suggest that our food distribution is kind of wacky -- for instance all these subsidies for cotton or corn farmers in the U.S., whose products we then dump on other countries." And what benefits local business and local communities, benefits all. "The way to achieve world peace, the way to achieve more harmony in our world," Malone said, "is through relationships [between nations and people] becoming more harmonious and right. Until these relationships are brought into more balance, we will always have situations of strife and domination."

Integrity Express may be reached by e-mail at integrityex@aol.com, by telephone at (408) 234-6377 or at the soon-to-be-constructed website, www.integrityexpress.us. In a future issue, the Faith will explore another way Catholics are working to advance social and economic justice today.

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