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Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers

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Abstract

This article analyzes the distribution of benefits from Fair Trade between producing and consuming countries. Fair Trade and conventional coffee production and trade were examined in Nicaragua in 2005–2006 and 2008. Consumption of the respective coffees was assessed in Finland in 2006–2009. The results indicate that consumers paid considerably more for Fair Trade-certified coffee than for the other alternatives available. Although Fair Trade provided price premiums to producer organizations, a larger share of the retail prices remained in the consuming country relative to conventional coffee trade. Paradoxically, along with the certified farmers and cooperatives, Fair Trade empowers roasters and retailers.

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Abbreviations

FLO:

Fair Trade Labelling Organizations International

ICO:

International Coffee Organization

UNDP:

United Nations Development Programme

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Authors and Affiliations

  1. Development Studies, Department of Political and Economic Studies, University of Helsinki, P.O. Box 26, 00014, Helsinki, Finland

    Joni Valkila

  2. Department of Economics, Aalto University School of Economics, P.O. Box 21240, Economicum, 00076, Aalto, Finland

    Pertti Haaparanta & Niina Niemi

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  1. Joni Valkila
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  2. Pertti Haaparanta
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  3. Niina Niemi
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Correspondence to Joni Valkila.

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Valkila, J., Haaparanta, P. & Niemi, N. Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers. J Bus Ethics 97, 257–270 (2010). https://doi.org/10.1007/s10551-010-0508-z

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