Beyond Fair Trade

by Mark Pendergrast

  The Dark Side of Coffee

  UNFORTUNATELY, COFFEE BECAME associated with slavery and oppression. Slaves had initially been brought to the Caribbean to harvest sugarcane, and the history of sugar is intimately tied to that of coffee. Sugar made coffee palatable to many consumers and added a quick energy lift to the stimulus of caffeine. When the French colonists first grew coffee in Saint-Domingue (Haiti) in 1734, it was natural that they would require additional African slaves to work the plantations.

  By 1788 Saint-Domingue supplied half of the world’s coffee. The slaves on the island lived in appalling conditions, housed in windowless huts, underfed, and overworked. They revolted in 1791 in a struggle for freedom that lasted twelve years, the only major successful slave revolt in history. Most plantations were burned to the ground and the owners massacred. Haitian coffee eventually reentered the international market, but it never regained its dominance.

  The Dutch jumped into the breach to supply the coffee shortfall with Java beans. Though they did not routinely rape or torture their laborers, they did enslave them. In Brazil, slavery was not abolished until 1888, later than any other country in the western hemisphere, because of coffee. Although some Brazilian plantation owners treated their slaves decently, others felt free to do as they pleased. Slaves were regarded as subhuman, “forming a link in the chain of animated beings between ourselves and the various species of brute animals,” as one slaveholder explained to his son.

  In Central America, the indigenous peoples such as Mayans were not technically enslaved, but the system of forced labor (mandamiento) and debt peonage amounted to the same thing. For a Mayan in Guatemala in the 1800s, for instance, the only alternative to being dragged off to work on a farm (or to the army or gang labor on a road) or to going into debt to a coffee farmer was flight. To maintain order, the government instituted a large standing army and militia. Thus, coffee money funded a repressive regime that fostered smoldering resentment among the indigenous people. Sometimes they rebelled, but such attempts only resulted in massacres. Instead they learned to subvert the system by working as little as possible, by taking wage advances from several farmers simultaneously, and by running away.

  So, in the history of the coffee industry, oppression and poverty have been associated with coffee cultivation, and inequities remain embedded in the global coffee economy, with most of the profits made near the consuming end in wealthier countries, not in the countries where coffee is grown.

  The Blight and the Boom-Bust Cycle

  BY THE LATE nineteenth century, coffee had become a global, semi-industrialized industry. Green coffee beans from remote areas around the world arrived via steamships in major consuming countries in North America and Europe and were roasted in factories, then sold in branded packages. The ground canned coffee wasn’t great, since it had to be exposed to oxygen and pre-staled before packaging. Because freshly roasted coffee produces carbon dioxide, it cannot be put immediately into an airtight container—the releasing gas would cause a rupture. Still, the canned coffee was convenient and well advertised.

  The market dominance of coffee from the East Indies was broken by a fungus, Hemileia vastatrix, the coffee leaf rust blight, which first appeared in Ceylon in 1869. It was called rust because of its initial yellow-brown stain on the underside of the coffee leaf, which eventually turns black, producing the spores of pale orange powder that rub off and spread. The blotches gradually enlarge until they cover the entire leaf, which then falls off. Finally, the entire tree is denuded and dies. The fungus effectively destroyed the coffee plantations of Indonesia for many years. Eventually, many farms in the East Indies began to grow robusta coffee (Coffea canephora), an inferior variety native to West Africa. It can withstand greater heat in the lowlands and is resistant to rust, but it has a harsher taste and contains twice the caffeine of arabica. Consequently, it has been used primarily in cheap blends, instant coffee and in many espresso blends to produce a foamy crema on top.

  Various theories held that the coffee leaf rust was caused by the shade trees then in use, or that too much dampness encouraged the disease. It does appear that the fungus thrives in moist environments. The real villain, however, is monoculture. Whenever man intervenes and creates an artificial wealth of a particular plant, nature eventually finds a way to take advantage of this abundant food supply. The coffee tree is otherwise rather hardy.

  The decline of coffee in Indonesia coincided with its explosive growth in Brazil and elsewhere in Latin America. Three importers in the United States, a syndicate nicknamed the Trinity that had controlled the majority of the crop from the East Indies, struggled to keep coffee prices high, even as Brazil flooded the market with beans. Finally, in 1880, they were unable to maintain the artificial price, and the market fell disastrously. “There was no attempt to do business, everyone being suspicious of his neighbor,” recalled one veteran coffee man. The losses for coffee amounted to nearly $7 million in 1880.

  In an attempt to stabilize the market, a coffee exchange was begun. Though complex in execution, a coffee exchange is a relatively simple concept. A buyer contracts with a seller to purchase a certain number of bags at a specified time in the future. As time goes by, the value of the contract changes, depending on market factors. Most real coffee men used the contracts as hedges against price changes, while speculators provided the necessary liquidity, since every contract requires a willing buyer and seller. While a speculator may profit, he also may lose his shirt. Essentially he provides a form of price risk insurance for coffee dealers.

  But the C-market, as the exchange has come to be called, has not stabilized prices to any great extent, and various coffee quota schemes in subsequent years all failed as well. The crash of 1880 was the beginning of a boom-bust cycle that continues to this day.

  The Specialty Coffee Revolution

  WICHA LEARNED ALL of this rather disturbing history as he read and talked to Patchanee and her colleagues. And in 2001, the world was in the middle of the worst bust cycle ever experienced, due in large part to overproduction of cheap robusta in nearby Vietnam. Yet there was hope. He also learned about the specialty coffee revolution.

  In the USA, by the 1960s, coffee had become a mediocre product, blended with inferior robusta beans, and served diluted in bottomless mugs to make it palatable. Per capita consumption declined, as baby boomers turned to soft drinks for their caffeine hit. In 1966, however, Alfred Peet, a Dutch immigrant and coffee trader dismayed by what had happened to his favorite beverage in the United States, opened Peet’s Coffee and Tea in Berkeley, California. He soon had a cult following for his dark-roasted single-origin arabica beans. This was the start of what came to be called the specialty coffee movement.

  Throughout the country a scattered, disparate band rediscovered or maintained a tradition of fresh-roasted, quality coffees. Many had roots in small, old-style family coffee businesses. Others were hippies who had hitchhiked through Europe and discovered the relaxed pleasures of café life and decent coffee. In 1971, three such men, inspired by Peet’s, founded Starbucks Coffee in Seattle. It was just one of many such grassroots roasters. Starbucks eventually came to dominate the new specialty movement, although some critics complained that the chain was too big, slick, and standardized. Nonetheless, Starbucks was astonishingly effective at reintroducing coffee as a high-end product, similar to wine in terms of its terroir—the unique taste that results from a particular microclimate and type of plant.

  At the same time, consumers became more aware of the inequities built into the coffee system, where the laborers who did the hardest work often received the lowest pay. In November 1988, Max Havelaar Quality Mark coffee was introduced in the Netherlands. Taking its name from the 1860 Dutch novel that protested the inhumane treatment of Javanese coffee growers, this Fair Trade coffee garnered enormous publicity and grabbed a small but significant market share. Within a few years, the Max Havelaar seal had appeared in Switzerland, Belgium, Denmark, and France. In Germany, Austria, t
he US, Canada, Japan, and other countries, where the Dutch name did not resonate, it became Transfair or Fair Trade coffee.

  The bureaucratic headquarters moved to Bonn, Germany, and the Fair Trade Labeling Organization (FLO), was established, later renamed Fairtrade International. In order to qualify for Fair Trade status, farmers had to own only a few acres, join together in a democratically run cooperative, and pass an annual audit. In return, beans labeled Fair Trade were guaranteed a minimum selling price set somewhat above the C-market—if they could find a market for them. Critics of Fair Trade pointed out that its certification did not cover well-intentioned estates that treated workers well, because by definition they were too large. As a result, the US organization split off from FLO in 2011 in order to redefine the guidelines and accept larger farms. Regardless, Fair Trade beans came to represent an important principle: people should be concerned about the farmers who were producing the product they drank every morning.

  Coffee in Thailand

  BY THE TURN of the twenty-first century, the specialty revolution had spread around the world, including the Pacific Rim. Starbucks opened its first store in Tokyo in 1995 and in Bangkok in 1998. While mostly tourists were attracted to upscale cafés at the onset, the coffeehouses also became trendy, hip destinations for businessmen and young Thai, for whom they symbolized one of the good things in life appreciated by Western culture.

  Arabica coffee cultivation had been introduced to Thailand in 1954, when the Thai Department of Agriculture brought in several varietal lines from Brazil, but they suffered from leaf rust. In 1961, Baptist agricultural missionary Richard Mann gave the Karen tribe of Huey Haum village in Mae Hong Son Province enough Caturra and Catuai coffee hybrid seedlings for commercial production. Although more tolerant of the fungal blight, they were still affected by it. Huey Haum farmers were able to sell their beans for a small profit and so continued to grow coffee. Mann worked with UN crop replacement programs for the next two decades, encouraging coffee cultivation along with other fruits and vegetables.

  In 1991, Richard Mann’s son, Mike, also a Baptist agronomist and missionary, started the Lahu Irrigation Project in Chiang Mai, which soon expanded into the Integrated Tribal Development Program (ITDP). “At first we focused on family gardens, latrines, water supply and irrigation, and a few crops, including fruit, coffee and macadamia trees,” Mann recalled. “But we didn’t do any marketing, and we weren’t thinking that coffee would take off as a cash crop.”

  That changed in 1997, when Richard Mann notified his son that a Japanese Christian organization, the Wakachiai Foundation, was interested in helping hill tribes market their coffee. With funding from Wakachiai, Mann organized a coffee cooperative, the Thai Tribal Arabica Coffee Production and Marketing Cooperative, and, using the foundation’s connections, got the first Fair Trade certification in Thailand through Transfair Japan. The first few villages Mann recruited included Huey Haum, as well as Goshen and Payang, two villages on the mountain of Doi Tung in the north of Thailand near the Burmese border. By the next year, two dozen villages had joined the cooperative, which sold beans to Japan and the Netherlands.

  That Doi Tung villages were growing coffee was thanks to King Bhumibol’s aging mother. A Bangkok slum orphan who became a nurse and married a king, Princess Sangwal Mahidol, known as the Princess Mother, had a long-standing concern for the hill tribes. She had established a program for medical volunteers, landing with them in remote villages in helicopters, which earned her the nickname Mae Fah Luang—Royal Mother from the Sky—among the tribes. She had also helped sell tribal crafts in Bangkok.

  The Princess Mother used to visit Switzerland every year for a ski trip. When she could no longer do so, she identified Doi Tung, which she had visited with her volunteer doctors, as an alternative vacation spot. The Doi Tung Royal Villa was built there, but she also wanted to help reforest the area and relieve tribal poverty. Thus began the Doi Tung Development Project under the direction of the Mae Fah Luang Foundation. Three Akha and Lahu villages had to relocate nearby, but otherwise the villages in the area were able to remain where they were.

  The Princess Mother died in 1995, around the time that Nestlé, the Swiss-based largest coffee roaster in the world, donated coffee seedlings to the project. A coffee expert from the Kona region of Hawaii was hired to help launch the project. At first, the Mae Fah Luang Foundation tried to grow and market coffee on government-owned plantations, but things worked better when farmers owned their own trees (though they didn’t own the land). Doi Tung eventually became a well-known Thai coffee brand, sold in Doi Tung coffeeshops in Bangkok, Chiang Mai, and Chiang Rai.

  Creating Doi Chaang Coffee

  BY 2001, WHEN Wicha focused on it as the possible salvation for the village of Doi Chang, coffee was becoming more popular in tea-drinking Thailand. He thought how great it would be if he could help position Doi Chang as the premier source of top-notch coffee in Thailand, produced and roasted inside Thailand. Not one to limit his vision, Wicha concluded that the name Doi Chang would come to stand for quality coffee and for the Akha tribe. In 2001, he made a research trip to Italy, home of espresso. At the Thai Embassy, an employee told him, “Oh, you must see my friend Chai in Bangkok.” So Wicha sought out Phitsanuchai Kaewphichai, a consultant to hotels and restaurants, who became “Brother Phitsanu,” a friend and advisor to Wicha, though he consistently turned down Wicha’s repeated offers to take an official position in the new business.

  Wicha’s vision continued to grow. Not only would the Akha grow superior coffee, eventually, the beans would become as well known and sought after worldwide as Hawaiian Kona and Jamaica Blue Mountain beans. The Akha would not be subservient peons working for others. They would not be like the coffee slaves of the past. They would take charge of their own coffee, their own destiny.

  Wicha now lived much of the time in a small thatched hut built for him in Doi Chang, as he and the Akha created their coffee enterprise. His wife and children, down in Chiang Rai, missed him, but they had grown used to his long absences.

  Discussing his vision with Adel, Miga, Lipi, Akong, and the other young Akha, Wicha waxed lyrical, and his enthusiasm was catching. The Akha could do this! They were hard workers. They just needed to know the right way to do things. First, they needed a name. That didn’t take long. They would call their coffee Doi Chaang, adding an “a” to the village name to make it distinctive and to imply that the coffee was of double-A quality. It was also common for the Thai to double vowels to indicate that the syllable would be drawn out, pronounced “Doy ChAAHng.” Wicha and the small band of Akha registered the Doi Chaang Coffee Company Original on March 11, 2003.

  On the package they decided to put a line drawing of Adel’s father, Piko, wearing a traditional turban. Piko looked like a respected elder statesman, with his rugged, handsome features and the determined set of his mouth. It was appropriate to honor him, because he had stuck with coffee after most other farmers had given up on the crop. The Akha were still an egalitarian society, but Piko was nonetheless pleased at this honor.

  The next problem concerned how the coffee would be grown. Wicha hated the chemical pesticides and fertilizers that the Akha had been sold to grow vegetables, because such products put them into an endless cycle of debt and harmed their health and the environment. The chemicals also flowed in water down the mountain and affected other villages. He wanted the Akha to grow organic coffee. Patchanee taught them to plant taller shade trees among the coffee plants not only to provide the shade required to allow the beans to develop properly, but also to “fix” nitrogen by taking it from the air and converting it to ammonium to enrich the soil. The falling leaves from the trees would provide humus, and many of them, such as macadamia or banana trees, were themselves cash crops.

  The coffee had to be carefully harvested, with only the ripest red or yellow cherries picked, and then processed that same day or the next. Patchanee emphasized that the wet process method generally yielded superior, reliable resul
ts with fewer defects, producing a drink with bright acidity and full, clean flavor. It is also far more labor-intensive and requires sophisticated machinery and infrastructure and an abundant supply of fresh running water at each processing facility. The springs on the mountain above Doi Chang provided plenty of water, but there was obviously no processing machinery.

  Consequently, the Akha initially pursued the wet process by hand. They removed the skin from the ripe coffee cherries with a mortar and pestle, then put the pulp-covered beans in a bucket full of water to ferment for up to forty-eight hours, checking them frequently, since it was important to stop the process at just the right point to prevent over-fermentation. As the mucilage decomposed, it loosened from its sticky binding on the parchment. The process also gave a subtle flavor to the inner bean. Then the farmers took the beans, still covered in parchment, and spread them out to dry in the sun on clean surfaces (some farmers built small bamboo platforms), turning them every few hours. They threw out any beans that were cracked or discolored.

  Wicha drove the dried beans to Chiang Mai, where a small coffee business removed the parchment and roasted the beans in a machine that held only one kilogram (half a pound) at a time. When properly roasted and brewed, the beans made superb coffee—a sweet, balanced cup, with a hint of roasted almonds, chocolate, and jasmine, and a syrupy-smooth mouthfeel. In terms of balance and versatility, the Doi Chaang offerings were comparable to the best Kona or Costa Rican beans, and they could be roasted medium or dark for different characteristics. The small Chiang Mai roaster wanted more, although its roasting methods were uneven.