Coffee and café culture has reached unprecedented popularity in the Western world and coffee drinkers tend to be passionate about their beverage of choice. Given the level of emotional commitment, it’s not surprising that coffee drinkers would also be increasingly concerned with the welfare of the farmers, as shown by the rising prominence of schemes such as Fair Trade.

Black Gold, a new feature documentary on the subject of the vast chasm between the incomes of coffee farmers and the profits of large coffee companies, screened on More 4 last night. I missed it but it’s playing again this Saturday and I hope to see it as I find coffee a truly fascinating subject. I worked as a volunteer in a coffee growing region of Costa Rica when I was 20 and in my travel writing career I have visited coffee farms in Uganda, Tanzania and Papua New Guinea (you can see some of the resulting articles on my travel site Roaming Tales). There is no doubt that coffee can be an immensely powerful social force and that more can be done to encourage this.

Millions of people around the world make their living in some way from coffee (such as this family in the PNG Highlands, pictured left). It’s the lifeblood of communities in many developing countries, even when it’s not the biggest export. (Coffee is tiny in PNG compared with mining or logging, for example, but it’s actually ordinary people who benefit). The average person with a small plot of land will grow food for the family and a few coffee trees to bring in cash for school fees, medicine and so on. In the 1980s, when coffee prices were high, small growers could even send their children to private school and university on the proceeds from coffee. Now there is greater global competition and prices are much lower but it’s still a crop of immense social significance.

I am curious to see what the documentary itself is like because quite honestly, I find the arguments put forward by producers on The Guardian’s Word of Mouth blog to be somewhat simplistic.

“Farmers we’ve spoken to find it patronising that huge corporations give money to charitable projects while they pay farmers an extremely low price. ‘Why not pay us a decent price’, they say, ‘and we’ll decide where to spend our money’.

Real change will only come when countries like Ethiopia capture the value-chain of coffee. Not just growing and picking beans but processing, roasting and exporting the finished product on to the shelves of our supermarkets.

Until then, the only way to make informed choices is to know how much is going back to the grower.”

Well, yes and no. Coffee companies spend money on aid and charity is because it’s tax deductible and it makes a nice corporate social responsibility story. However, it’s also because it’s practical and possible. Coffee is a commodity traded on an exchange so the base prices are not directly under the control of anyone, from coffee exporter to coffee shop chain. There are circumstances when it is possible to pay higher prices but it’s not easy to do.

There is no doubt that it would be nice for farmers to get a better deal but it’s also important to recognise the reasons why they don’t. You can’t change something without properly understanding the nature of the problem.

1. Moving up the value chain is not easy

It’s true that most coffee exporting companies are foreign owned and I would welcome it if countries such as Ethiopia started their own. It would benefit the Ethiopian economy, though it would not necessarily mean a better deal for farmers, unless the export company was actually owned by a farmers’ co-operative and the co-operative was actually well run.

It’s not practical to say that Ethiopian companies set up as roasters - and this is the most profitable part of the chain. Coffee loses flavour after roasting so this needs to be done as close to the consumer as possible. Also roasters are usually buying coffee from multiple sources, not just one country (single origin coffee is a niche).

2. The actual bean is only a small part of the value

It’s also true that to make an informed choice you need to know how much is going back to the grower. But you also need to know how much should go back to the grower. What are the beans actually worth, given how vastly different they are to an actual cup of coffee?

How much should the coffee exporter get for their work in travelling all over the country to buy the coffee, then the wet processing, the drying, the sorting, then selling to buyers abroad? Bear in mind that they employ a lot of local staff (such as these women at an export company in Uganda, pictured left) and take the business risk because if they can’t sell the coffee, they lose money.

How much should the roaster be paid for sourcing the beans, roasting them, packaging them, marketing and advertising, liaising with retailers and coffee shops, not to mention the higher overheads that come with a base in Europe or North America?

How much should a coffee shop in London get, bearing in mind profits will only come once they’ve covered the extortionate cost of rent in this city, electricity, insurance and wage costs?

3. Coffee is a commodity

It’s a phrase that’s often bandied around but I mean that in the literal sense. The price of coffee fluctuates according to commodity traders on the coffee exchanges in New York or London (depending on whether you are talking about Robusta or Arabica). It’s exactly the same process that sets the price for wheat and oil, for example. When coffee prices collapse it’s usually because of over-supply - countries that never previously grew coffee such as Vietnam now produce vast quantities of the stuff.

4. Don’t blame the coffee exporter

I have been privileged enough to meet coffee growers, coffee exporters and roasters and understand a bit about the economics of each piece of the puzzle.

If you are a coffee exporter it is very difficult to offer a higher price than the market rate because you have to be able to sell the beans on to a roaster in Europe or the US or wherever the end market is. You probably have a competitor just down the road more than willing to undercut your prices. Coffee exporters don’t make huge margins - the roasters (who brand and sell the coffee) sit at the most profitable part of the value chain.

However, in order to convince the roasters to pay more for their coffee, there needs to be an assurance that the money would benefit growers not just exporters, and that it could pass the cost on to consumers in some way, either through a quality premium or through an appeal to the social conscience. Certification schemes play a valuable role on both counts.

5. Quality premiums are hard to get

Coffee exporters can sometimes attract a premium - which is passed on to growers - for coffee of a particular quality but that means hard work and risk for both the coffee exporter and the grower. The export companies have to work with farmers - visiting farms all over the country in person to teach them pruning, harvesting and drying techniques. They have to convince the farmers that it’s worth their while to make the extra effort. They run the risk that another exporter or a middleman will buy the crop before them and cash in on the work. They also run the risk that they will pay the premium to farmers and then the roasters will reject the coffee and not pay the promised price, leaving them out of pocket.

If the premium is specifically for organic coffee there is also the risk the farmers breaking the rules and being de-certified. (Aid organisations can also be incredibly unhelpful here - I know of a case in Mount Elgon in Uganda where after several years of hard work on the part of farmers and a local cooperative, the area had been collectively certified for organic. Apparently USAid then showed up and, rather than go around the other side of the mountain where the coffee farmers were not yet organised, they muscled in and drove around handing out free chemicals to organic coffee farmers).

The best quality coffee comes when red cherry is picked off the tree and sent to the factory for processing on the same day. It ensures the coffee is fresh and the processing is controlled and consistent. But most coffee farms are remote and it can take days for the coffee to reach the exporter. So farmers need to dry the coffee cherry to parchment stage themselves - we’re talking smallholders with a family to feed and the coffee is exposed to the elements and often dried on the ground - if they’re really lucky they might have a tarpaulin, which reduces the contact with the ground but does nothing to protect it from the chickens and small children running across the beans or the rain and wind. It’s going to be a hard sell to get a premium price for this coffee!

6. Growing coffee is not a full-time job

The prices that coffee farmers get vary wildly. In Uganda, where land pressure is high, a farmer (such as this one, pictured left) might only have half an acre of land and he has to grown food to feed his family as well as coffee. He might earn $US200 per year from coffee to support a family of nine - although he is likely to own his land and grow enough food to feed his family, that still does not leave much surplus for school fees, medicine, clothing, mosquito nets and so on. In PNG, a vast country with only five million people, the income from coffee is closer to $US2,000 per year for an individual farmer, though he might be supporting his brothers’ families as well.

However it is worth pointing out that nowhere, except on the large corporate estates, is coffee the main activity. Coffee farmers spend most of their time growing food and generally only grow as much coffee as they can personally cope with. The annual income is low but it’s not a fair comparison to look at it as a wage as it’s not a full-time job.

7. Certification schemes do work

The main problem with certification schemes is that there so many of them. In the UK we’re most familiar with Fair Trade and organics, but there’s also Rainforest Alliance, Utz Certified (formerly Utz Kapeh), and a host of others.. Certification pays off with higher prices but it costs time and money to get certified and you have to take a punt on which scheme is best. Fortunately, if you meet the standards for one, it’s usually fairly easy to meet the standards for another, and increasingly you can get the same inspector to conduct multiple certifications.

Fair Trade focuses on the social side. The idea is that it pays a minimum that is above the cost of production so that even if commodity coffee prices fall dramatically, the farmer is guaranteed an income. The rest of the time, the Fair Trade price is always a certain margin above the traded price - and there is also a social premium that is invested back in the community (and the community decides where it is spent).

Rainforest Alliance has some social criteria but is also very concerned with the environmental side. Deforestation is a big issue in countries such as Uganda, mostly because of land pressure, and Rainforest Alliance is concerned to ensure that coffee farmers keep shade trees that provide bird and wildlife habitat.

Utz has similarities to both but is a bigger name in mainland Europe than the UK.

Finally, organic certification is primarily about how the coffee is grown rather than social justice, though many organic products are also Fair Trade and vice versa. To be certified organic, the grower has to show not just that they don’t use chemical fertilisers and pesticides but also that they are improving the soil naturally. (Organic farming is a great way to lock carbon into the soil for exactly this reason). I was really impressed with the small organic farm I saw in Uganda - it had nothing to do with my hosts, but was just a small farmer with a few coffee trees who used manure from the cows and droppings from the rabbit hutch (pictured) as natural fertiliser, and also had lots of leaves to mulch the ground, which locks in water and soil nutrients. Elsewhere I saw lots of farms where the soil was overly weeded and quite bare so it was quite a striking difference.

Choosing certified coffee is a great way to ensure that more of the money goes back to the farmer and also that communities and the natural environment also benefit. However, there are some concerns about quality - my favourite coffee shop in London is Monmouth Coffee Company, which is also a roaster. They don’t buy certified Fair Trade because they have been unhappy with the quality of samples in the past, but they have their own rigorous standards. At the other end of the scale, Nespresso, which is the premium brand of Nestlé, also does not embrace Fair Trade but has its own AAA programme, focusing on both quality and sustainability. The problem is that an internal scheme is not as transparent and accountable for consumers, but it’s a case of deciding whether you trust the companies in question.

The Black Gold post is highly critical of chains such as Starbucks. So am I, but for different reasons.

“These companies fail to disclose how much they pay the coffee growers and attempts by the media to find actual prices have largely failed. But they continue to hi-jack the language of fair trade and sustainability.”

The reason I don’t like coffee chains is because they generally sell overpriced crappy coffee. Starbucks buys some of the best coffee in the world but as far as I’m concerned they don’t make it well - you have to order a double just to get any taste at all. And Starbucks is miles better than some of its chain competitors like Caffe Nero and Costa.

But say what you like about Starbucks and their ilk, I don’t think they should be criticised for their stance on fair trade and sustainability. They don’t “hi-jack” the words - they sell certified Fair Trade coffee and the fact that they do this benefits farmers and educates consumers at the same time.