Starbucks, Walmart and The $4 cup of coffee

Back to the question of "fair trade" coffee.

Here is the scoop.

When you buy that $4 cup of Starbucks fair trade coffee, where is your money going?

Well...the truth is that most of your money does not go into the beans. In fact the coffee beans actually seem to be a minor element in the whole "coffee experience". And after all, that is what we buy these days isn't it? We buy "the experience".

In the average $4 cup of fair trade coffee, about 5 cents covers the beans. And that is after the beans are roasted. So the farmer of those beans (who sells before roasting) is getting only a few cents for every $4 drink. (This info is from a very interesting book entitled Starbucked)

Is this marginally better than the farmer would get for non-fair trade coffee? Yes. Does that explain why you are paying $4? Probably not.

Essentially this is the problem, as many of you pointed out. With fair trade products, many times the producer is getting a few extra cents, while the retailers are charging way more. Fair trade products (along with "green" products) are becoming a great way to inflate your profit margin.

I have to say, I tend to side with "Podge" on this. I'd rather buy local. That way I know my purchase is making a difference to someone...that is...to an individual...not to some mysterious corporation. In the end I have more faith in the small business owner, that local coffee shop owner who is trying to make a go of it (despite overwhelming odds), than in the most philanthropic corporation in the world. This may not help get my money back to the coffee farmer, but at least my money is going back into the community.

Maybe this is wrong. I suppose there are lots of very philanthropic corporations. I suppose I should support them. Certainly there are corporations that should be rewarded and those that should be punished. Take Starbucks for example, in some ways they do deserve to be rewarded. They have been a pioneer in offering health insurance to part-time workers, while the majority of fast food companies go out of their way to avoid this. I still haven't figured out all the secrets of fair trade coffee, but providing health benefits for part-time wokers...this is something I can support. In fact, I could use some myself.

But corporations, even the best of them, rub me wrong. They are just so.....big. And I am so... small. And I am simply not sure that I want to live in a world that is quite so full of corporations.

Of course, in full disclosure, I must admit that I believe all of these things in abstract. Everything always seems much easier in the abstract. Let's take that great symbol of American corporations...Walmart. Walmart has certainly not been a pioneer in offering any kind of benefits to its workers. Nor does it treat its suppliers well. And yet I wandered in there just the other day and I must confess I went through the check-out lane. It's the prices, who can beat the prices?

But every time I go in there it blows my mind. Literally, I went to a Good Will thrift shop first and bought some clothes. I then went to Walmart and discovered that I could have bought similar clothing FOR LESS at Walmart. How is it possible that Walmart can sell new clothing for less than Good Will can sell used clothing? How do you sell t shirts for $4 and jeans for $10? Do I really want to live in a world where this is possible? Having seen first hand the amount of work that the SHONA craftspeople put into our clothing, I have absolutely no faith that the producers of the $4 T shirt are receiving anything close to a just wage. The math just doesn't work.

Yet still, those $4 t-shirts caught my eye. And when I go to Starbucks those $4 coffees catch my eye for a whole different reason.

So we live in a land of extremes. Where we can buy so many things for far less than they should cost, and so many other things for far more than they should cost. But the question remains, does it matter whether we pay $4 or $40? Where does our money go? Who can tell me? As long as the world remains so separated, with the producer and the consumer so very far apart, with lines of corporations and stock holders in between, I have the sinking feeling that very little of what I spend actually returns to the producers, fair trade or not.