Fair trade certified coffee was created to promote economic incentives and healthy working conditions for coffee farmers, and is often purchased directly from coffee growers or independent coffee retails. Customers typically pay premium prices as opposed to standard coffee prices. Farmers producing fair trade coffee must belong to a cooperative establishing themselves as local growers. The cooperatives determine how the allocations from higher priced coffee sales will be spent after the grower receives a predetermined minimum price from sales.
Initially, fair trade certified programs originated in the 1940s; however, it was not enacted until 1988 in the Netherlands when coffee prices continued to drop worldwide. Supplies of coffee were greater than the demand, thereby flooding the market. As poverty among coffee growers increased, the fair trade certified coffee program was established to offset their losses. The Fair Trade Foundation set fair trade standards and continues to inspect and certify eligible growers to ensure healthy working conditions among coffee farmers. Fair trade certified coffee is distinguished by a certification label.
Standards for fair trade certified coffee require that coffee farmers receive a minimum for each pound of raw coffee beans. The worldwide market average is nearly half this amount. Incentives for coffee growers also include a premium for organic products.
To qualify as a certified grower of fair trade certified coffee, farmers must meet minimum standards, such as providing safe working conditions and fair wages. In addition, local growers must be active in community development by working with the community to develop health care services and scholarship programs. As a result, fair trade certified coffee growers are allowed to compete in the global market and provide input on how fair trade revenues will be spent.
Since its inception, fair trade certified coffee has grown in popularity and is available at most grocery stores, independent coffee shops, and restaurants. Many retailers also offer additional incentives for customers when purchasing it, such as donations to charitable organizations assisting local farmers. Advocates for fair wages and healthy working conditions have promoted it to the general public, often citing the need to reduce poverty in destitute countries worldwide through sales of fair trade certified coffee. As a result, fair trade products have evolved, such as fair trade clothing, fair trade art, and fair trade tea.