How does Fair Trade affect the global coffee market?

How does Fair Trade affect the global coffee market?

Coffee is one of the industries that has perhaps benefited the most from Fair Trade. The growers in the coffee industry have benefited substantially from Fair Trade because it is such a largely traded commodity - second only to oil on international markets. The growth in Fair Trade coffee has had a huge impact on those growers who are able to get in on growing Fair Trade coffee and are getting paid. Fair Trade coffee sets a minimum price for coffee growers in that with Fair Trade coffee, the minimum price is $1.26 per pound, and then on top of that there is a social premium, and then if it is organic coffee there is another premium. What it does is encourages coffee growers who are growing Fair Trade coffee to work towards sustainable and organic growing methods. It focuses on small scale coffee growers who are often left with whatever the market price of coffee ends up, and sometimes that dips below even the price of production. By setting a minimum price, Fair Trade ensures that coffee growers are being paid at least what it costs to sustainably produce the coffee.