Fair Trade USA will maintain its current minimum prices and premiums for all coffee sold under its Fair Trade Certified label to the end of 2023.
It is also launching the Innovation for Impact Initiative, which aims to build consensus between industry and producers around a redeveloped Fair Trade Certified program.
The initiative will use input from the industry and producers to renew the Fair Trade Certified coffee program for impact through volume and scale.
Fair Trade USA consulted with more than 500 roasters, importers and retailers as well as nearly 400 producer organisations. These participants represent more than 84 per cent of all Fair Trade Certified coffee sold in the US market.
The majority of these warned that an increase in price in the current economic environment would significantly lower demand and volume over the next 12 to 24 months, reducing overall producer impact.
Fair Trade says that while many producer leaders interviewed supported the price increase in principle, they also expressed concerns about the magnitude of the increase, the timeline for implementation, and the risk of reduced market impact.
The group intends on designing and developing the new program over the next three to four months with implementation of program improvements in 2024.
To guide the new initiative, Fair Trade USA is creating the Global Impact Advisory board, with the founder and former CEO of FLOCERT Rüdiger Meyer as its chair.
Fair Trade USA says little will change in the months ahead for importers, roasters, and retailers currently working with them. The minimum price of US$1.40 per pound for washed Arabica, US$1.05 per pound for washed Robusta, a social premium of US$0.20 per pound, and organic differential of US$0.30 per pound will all remain the same.
On 30 March, Fairtrade International (FLO) announced it will raise its coffee minimum price and organic differential, effective 1 August. This decision was aimed at addressing the rising cost of production for producers.
New guidance on contracting and reporting will be issued in the next few weeks.
Fair Trade USA will publish a report on the findings of its consultation and listening tour in the coming weeks.
For more information, visit Fair Trade’s website.