Hi Joachim, thanks for this question. In short, Fairtrade helps coffee farmers by setting standards to pay higher prices. Along with higher income, Fairtrade aims to empower farmers through cooperative organizations, training, and facilitating knowledge sharing.
Overall, coffee pricing is a challenging topic to handle. As you may know, coffee is a commoditized good, which means that pricing can be a nightmare. Many people complain about the steep prices when they get their favorite drinks at some coffee shops, but the truth is that farmers get very little money from their work.
Fairtrade started as a way to address the income gap in commoditized industries. Curiously enough, although this philosophy has been applied in other sectors, Fairtrade started to help Mexican coffee farmers who got stroked by a price crisis in the late 1980s.
The Fairtrade organization aims to provide a better price for coffee beans, so it's easier for farmers to cover their operational costs and sustain their businesses. So, the organization works together with companies, cooperatives, and other institutions to provide more resources, both monetary and intellectual, to help farmers.
Arguably, millions of people depend on coffee as their primary source of income; if prices go up or down too far, they can lose out financially - which means less food onto tables across several countries in Africa, Asia, and Latin America.
Fairtrade critics claim that it has limited impact and, at the same time, the standards the organization promotes aren’t necessarily better. Alternatives like direct trade between roasters and producers have gained momentum over the years, but the income gap is still there.
But, most urgently than unequal income distribution, coffee farmers are still making too little money, which means they might switch to more profitable crops or businesses.
Many young people are abandoning their homes in coffee-producing countries, looking for better opportunities, getting more money in other businesses, or pursuing professional careers. So, as much as Fairtrade is helping many farmers and has impacted have had some impact on the status quo, there is still plenty of work to be done.