Fair Trade cocoa price, 1996-2006

You can see from the above graph that fair trade certifiers aim not just to raise, but to raise and stabilise the price a farmer or cooperative receives for produce.

Fact: There are many fair trade certifying bodies, this data comes from Flo-CERT GmbH, a non-profit based in Bonn. Flo-CERT pays X employees to verify that cocoa, coffee, and other popular consumption products are farmed and sold according to Fair Trade standards.

How much extra are you willing to pay these people (their efforts are part of the extra cost of fair trade goods) so that the farmers are guaranteed predictable revenues?

Fact 2: The loathèd corporation Starbucks has been paying stable above-market rates for their coffee for years.

Fact 3: The charts above depict a one-dimensional price. Of course each coffee/cocoa bean is unique; so is every farm and every farmer. For a commodity to be traded from hand to hand to hand, it needs to be standardised. But a big buyer like Starbucks which deals through its own channels with farmers might pay a higher price simply because it’s also requiring a higher grade of beans — thus leaving the middle quality ones to be sold at the regular market rate.

Conclusion: Nothing is as simple or clear-cut as it at first seems.

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