Coffeehouse Chatter: One large latte to go, please.
SAUL GONZALEZ: Visit any busy, upscale coffeehouse in America -- where mochas regularly sell for $3 and more a cup -- and you might think the world's coffee economy would be booming.
But around the globe, 25 million poor coffee farmers, whose livelihoods depend on coffee, are getting poorer as prices on the international coffee market plummet, reaching their lowest level in decades. One of the countries hardest hit by the coffee crisis is the Central American nation of Nicaragua, where one job in three depends on the coffee economy -- from harvesting to processing to exporting.FRANK LANZAS (Coffee Farmer): Coffee has been the number one commodity in Nicaragua for many years.
GONZALEZ: Frank Lanzas is one of Nicaragua's best known large coffee producers. Like many in his business, he blames a global coffee glut for his industry's troubles.
Mr. LANZAS: It is serious because of the overproduction of coffee. For example, right now this year, coffee production will be about 120 million bags, while consumption will be only 110 million bags. So there is a surplus of 10 million bags.GONZALEZ: Lanzas says that oversupply was partly created by international development policies that encouraged other countries to grow coffee -- lots of it -- thus flooding the market with coffee beans and driving prices down.
Mr. LANZAS: It is the law of supply and demand. If the supply is way over what the offer is, then coffee prices have fallen to about $40 a bag and our cost of production is about $45 a bag. So we are losing about $5 a bag.
GONZALEZ: The falling price for coffee on the world market translates into greater hardship for thousands of Nicaragua's small coffee farmers. However, they see no other agricultural alternative to growing the crop.
ANTONIN GARCIA (Coffee Farmer) (Through Translator): We don't live well. Life is so hard. We get paid so little for our crop that it's hardly possible to survive. We are suffering here. I don't know what it's like for the rich, but here we are trying to make do with so very little.
GONZALEZ: Workers who find jobs harvesting beans on large coffee plantations earn only $2 to $3 a day. That's less than the price of a large latte in many American coffee bars.Many of the workers in the coffee fields are children, harvesting and sorting the beans to help their families survive.
For many organizations fighting for social justice, including religious groups, the human misery created by the international coffee economy has become too enormous to ignore. In response, they are promoting a new way to buy and sell coffee, one which they claim is more ethical and could improve the lives of countless coffee farmers around the world, including here in Nicaragua. It's an idea called fair trade.
HEATHER PUTNAM (Fair Trade Activist): Fair trade is when the consumer makes a voluntary decision to buy coffee at a higher price to directly support small producers that produce that coffee.GONZALEZ: Heather Putnam is an advisor to CECOCAFEN. It's a Nicaraguan agricultural cooperative made up of over 2,000 coffee farmers who sell their beans exclusively on the fair trade market. Fair trade, Putnam says, has brought tangible benefits to some of this country's poorest coffee-growing communities.
Ms. PUTNAM: They are able to invest in schools. They are able to invest in community houses and infrastructure and improving the roads, in transporting the coffee during harvest time.There are lots of advantages.
SEGUNDO MEMBRENO (Coffee Farmer) (Through Translator): The importance of fair trade for small producers is it, of course, pays you a better price for your coffee, but that better price brings you so many other benefits -- you can fix a leaky roof, improve your home, and buy medicine for your kids when they are sick.
GONZALEZ: In recent years, numerous fair trade coffee brands, which sell at a slightly higher price than conventional non-fair trade labels, have been introduced in the United States, Canada, and Europe. They are all identified by the fair trade label. Seeing a market develop of socially conscious consumers, Starbucks and other large coffee retailers have also started selling fair trade coffee in their stores.
KATHLEEN RUDRUD (Fair Trade Activist): It is personal coffee. So when I drink a cup of coffee, I know the person behind the coffee. I know the person who created this coffee, and it gives me a better feeling that I contributed to a little bit of well-being for them.
GONZALEZ: In the U.S., many in the coffee business say the importance of fair trade has been exaggerated, noting it only accounts for about one percent of the global coffee economy. Its market share, they argue, will always be modest, they say, because most consumers don't want to pay extra for anything.
Mr. LINGLE: While there is a great deal of empathy for the plight of the farmer, and many consumers recognize it, when it comes time to part with the dollar in your wallet, that is not a strong enough motivation for them to purchase the product.
Mr. MEMBRENO: We, the small farmers, produce great-quality coffee. I ask them to drink it so they can help the farmers and their families. They have to understand that their support really helps us here.
