#2 - Market Access & fair wages
April 17, 2019
Why do we pay our partners in Guatemala over twice the local market rate for their coffee?
Because it is the fair price to pay.
Market access and “fair” wages for green coffee in Guatemala is complicated to say the least. Many regulatory, cultural, and and physical barriers exist when it comes to exporting to the United States. While this might not be a new idea in the realm of international trade, it is particularly important when discussing the need for market access and fair wages in the coffee industry. Radical learned of this importance while on the ground in Guatemala during our 2018 and 2019 visits.
On average, the market for coffee in the community where our partners are located is $1.36 per pound. That’s assuming the farmers are selling directly to their buyers and not to a local middleman - who often go by the English translation of “Coyote.” The market for selling to coyotes is “much, much worse.”
We keep throwing all these numbers around, so I want to take a step back and provide some perspective. Say you pay, on average, $2.00 per 12oz cup of coffee every morning. Usually one can get around 24 12oz cups per 1lb of coffee. Which translates to around $46.64 profit per bag ((24*$2.00)-$1.36)). Meaning those at the end of the supply chain (whomever you directly buy your coffee from) are making a 97% margin on that coffee - ignoring overhead and other expenses, admittedly.
Does this seem fair to you? Would you be willing to swap places with one of the farmers knowing you’d receive a 3% share of the profits?
At Radical, we believe that those growing, harvesting, and processing the coffee deserve to keep the economic value of their work. And I’m sure you do too.