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Published on Just Things (http://justthings.info)

FLO continues to postpone raising its minimum price

By editor
Created 2007-01-31 00:54

Looks like certified fair-trade coffee price of $1.26 or $1.41 for organic will stay where it is for at least another growing season. I can't seem to find out when that was set, but by all standards, including TransFair's [1], it's been a very long time.

The Latin American and Carribbean Coordinator on Fair Trade (better known as CLAC [2]) submitted a report to FLO on how the minimum price that its certification guarantees isn't cutting it any longer. After thinking about it for several months, FLO's Standards Committee decided unanimously [3] not to raise the price:

The Standards Committee based its decision on a lack of consensus among the different stakeholders as well as on the lack of key data of production costs and market impact for coffee. The Committee noticed the “wide variety of views among stakeholders about the need to increase the price, and the rationale, timing and wisdom of doing so”, and in particular the view held by many stakeholders that “the result of a rapid or large increase of the price would be to significantly reduce sales or limit growth, which would actually harm producers most.” The Standards Committee members identified the need to obtain more extensive cost and market data on coffee, currently not available.

Basically, they're saying this needs further study. Kind of the way the Bush administration says global warming needs further study. But, could someone else at FLO make them see the light? Probably not:

The Chair of FLO’s Board, Barbara Fiorito supports the decision taken: “The Board recognizes the essential importance of the process and decisions taken by the FLO Standards Committee. The producer’s request has been very seriously considered by the Board and the Standards Committee. I am encouraged that this request will be taken forward in an inclusive, robust and timely manner with the aim to reach as constructive a broad stakeholder consensus as possible.”

But, hey, it's all still about the producers:

FLO: a truly multi-stakeholder association

Unlike other certification systems, FLO guarantees the producers a Minimum Price for their produce, which takes into account the costs of sustainable production (COSP). Producers also receive the ‘Fairtrade Premium’, which is invested for the benefit of the producers, their organizations or their communities, and an extra payment for organic production.

When a group of stakeholders notify the need to review a Standard or the Fairtrade Minimum Prices and Premium, FLO Standards Unit studies the proposal and initiates a broad consultation process involving all Fairtrade Labelling stakeholders. FLO actively encourages all its stakeholders to take an active role in the development of Fairtrade Standards and Prices for the benefit of producers in the South.


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