Journal of Business Ethics

, Volume 97, Issue 2, pp 257–270 | Cite as

Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers

  • Joni ValkilaEmail author
  • Pertti Haaparanta
  • Niina Niemi


This article analyzes the distribution of benefits from Fair Trade between producing and consuming countries. Fair Trade and conventional coffee production and trade were examined in Nicaragua in 2005–2006 and 2008. Consumption of the respective coffees was assessed in Finland in 2006–2009. The results indicate that consumers paid considerably more for Fair Trade-certified coffee than for the other alternatives available. Although Fair Trade provided price premiums to producer organizations, a larger share of the retail prices remained in the consuming country relative to conventional coffee trade. Paradoxically, along with the certified farmers and cooperatives, Fair Trade empowers roasters and retailers.


coffee consumers cooperatives Fair Trade farmers Finland labor Nicaragua retail prices value chain 



Fair Trade Labelling Organizations International


International Coffee Organization


United Nations Development Programme


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arnot, C., P. C. Boxall and S. B. Cash: 2006, ‘Do ethical consumers care about price? A revealed preference analysis of fair trade coffee purchases’, Canadian Journal of Agricultural Economics 54(4), 555–565.CrossRefGoogle Scholar
  2. Bacon, C.: 2005, ‘Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Small-Scale Farmer Vulnerability in Northern Nicaragua?’, World Development 33(3), 497–511.CrossRefGoogle Scholar
  3. Bacon, C., V. E. Mendéz and J. A. Fox: 2008, ‘Cultivating sustainable coffee: Persistent paradoxes’, in C. Bacon, V. E. Mendéz, S. R. Gliessman, D. Goodman and J. A. Fox (eds.), Confronting the Coffee Coffee Crisis, Fair Trade, Sustainable Livelihoods and Ecosystems in Mexico and Central America (MIT press, Cambridge, MA), pp. 337–372.Google Scholar
  4. Daviron, B., and S. Ponte: 2005, The coffee paradox: Commodity trade and the elusive promise of development (Zed Books, London).Google Scholar
  5. De Neve, G., P. Luetchford and J. Pratt: 2008, ‘Introduction: Revealing the Hidden Hands of Global Market Exchange’, in G. De Neve, P. Luetchford, J. Pratt and D. C. Wood (eds.), Hidden Hands in the Market: Ethnographies of Fair Trade, Ethical Consumption and Corporate Social Responsibility (Research in Economic Anthropology), vol. 28, pp. 1–30.Google Scholar
  6. Fairtrade Finland: 2009, Reilun kaupan edistämisyhdistyksen 10-vuotisraportti 19992009 (Reilun kaupan edistämisyhdistys, Helsinki).Google Scholar
  7. Finnish Coffee Roasters’ Association: 2009, ‘Kaikki kahvista’, Accessed 18 Aug 2009.
  8. Finnish Customs: 2009, ‘Uljas Database’,
  9. FLO (Fairtrade Labelling Organizations International): 2007a, ‘FLO Standards Announcement: Fairtrade Coffee Prices, March 30th, 2007’, Accessed 4 July 2007.
  10. FLO (Fairtrade Labelling Organizations International): 2007b, ‘FLO Standards Announcement: Coffee Minimum Prices, December 12th, 2007’, Accessed 15 Jan 2008.
  11. Flores, M., A. Bratescu, J. O. Martínez, J. A. Oviedo and A. Acosta: 2002, Centroamérica: El impacto de la caída de los precios del café (Comisión Económica para América Latina y el Caribe, México D.F.).Google Scholar
  12. Gilbert, C.: 2006, ‘Value Chain Analysis and Market Power in Commodity Processing with Application to the Cocoa and Coffee Sectors’, Proceedings of the FAO Workshop on Governance, Coordination and Distribution Along Commodity Value Chains (The Food and Agriculture Organization of the United Nations, Rome), pp. 267–297.Google Scholar
  13. Guthman, J.: 2007, ‘The Polanyian way? Voluntary food labels as neoliberal governance’. Antipode 39(3), 456–478.CrossRefGoogle Scholar
  14. Hudson, I. and M. Hudson: 2003, ‘Removing the Veil? Commodity Fetishism, Fair Trade, and the Environment’. Organization & Environment 16(4), 413–430.CrossRefGoogle Scholar
  15. ICO (International Coffee Organization): 2003, Impact of the coffee crisis on poverty in producing countries (ICO, London).Google Scholar
  16. ICO (International Coffee Organization): 2009a, ‘Letter from the Executive Director, June’, Accessed 15 Aug 2009.
  17. ICO (International Coffee Organization): 2009b, ‘Retail Prices of Roasted Coffee’, Accessed 20 Sept 2009.
  18. ICO (International Coffee Organization): 2009c, ‘Indicator Prices, Monthly and Annual Averages’, Accessed 20 Sept 2009.
  19. Kilian, B., C. Jones, L. Pratt, and A. Villalobos: 2006, ‘Is sustainable agriculture a viable strategy to improve farm income in Central America? A case study on coffee’, Journal of Business Research 59(3), 322–330.CrossRefGoogle Scholar
  20. McCalla, A.F.: 2009, ‘World Food Prices: Causes and Consequences’, Canadian Journal of Agricultural Economics 57(1), 23–34.CrossRefGoogle Scholar
  21. McMurtry J. J. (2009) ‘Ethical Value-Added: Fair Trade and the Case of Café Femenino’. Journal of Business Ethics 86(s1):27–49.CrossRefGoogle Scholar
  22. Mendoza, R., and J. Bastiaensen: 2003, ‘Fair Trade and the coffee crisis in the Nicaraguan Segovias’, Small Enterprise Development 14(2): 36–46.CrossRefGoogle Scholar
  23. Miller, R.: 2005, ‘Moral closeness and world community’, in D.K. Chatterjee (ed.), The Ethics of Assistance: Morality and the Distant Needy, (Cambridge University Press, Cambridge), pp. 101–122.Google Scholar
  24. Muradian, R., and W. Pelupessy: 2005, ‘Governing the coffee chain: The role of voluntary regulatory systems’, World Development 33(12), 2029–2044.CrossRefGoogle Scholar
  25. Murray, D. L. and L. T. Raynolds: 2007, ‘Globalization and Its Antinomies: Negotiating a Fair Trade Movement’, in L. T. Raynolds, D. L. Murray and J. Wilkinson (eds.), Fair Trade: The Challenges of Transforming Globalization (Routledge, London), pp. 3–14.Google Scholar
  26. Narlikar, A.: 1999, ‘Developing Countries and the WTO’, in B. Hocking and S. McGuire (eds.), Trade Politics (London, Routledge), pp. 133–145.Google Scholar
  27. Nielsen: 2008, ‘Päivittäistavarakaupan myymälärekisteri 2007’,
  28. O’Neill, O.: 2005, ‘Global justice: whose obligations’, in D.K. Chatterjee (ed.), The Ethics of Assistance: Morality and the Distant Needy, (Cambridge University Press, Cambridge), pp. 242–259.Google Scholar
  29. Ponte, S.: 2002, ‘The ‘Latte Revolution’? Regulation, markets and consumption in the global coffee chain’, World Development 30(7), 1099–1122.CrossRefGoogle Scholar
  30. Ponte, S. and P. Gibbon: 2005, ‘Quality standards, conventions, and the governance of global value chains’, Economy and Society 34(1), 1–31.CrossRefGoogle Scholar
  31. Raynolds, L.T., D. Murray and A. Heller: 2007, ‘Regulating sustainability in the coffee sector: a comparative analysis of third-party environmental and social certification initiatives’, Agriculture and Human Values 24(2), 147–163.CrossRefGoogle Scholar
  32. Renard, M.-C. and V. Pérez-Grovas: 2007, ‘Fair Trade Coffee in Mexico, at the Center of the Debates’, in L. T. Raynolds, D. L. Murray and J. Wilkinson (eds.), Fair Trade: The Challenges of Transforming Globalization (Routledge, London), pp. 138–156.Google Scholar
  33. Singer P.: 1972, ‘Famine, Affluence, and Morality’, Philosophy and Public Affairs, 1(1), 229–243.Google Scholar
  34. Talbot, J.M.: 1997, ‘Where does your coffee dollar go? The division of income and surplus along the coffee commodity chain’, Studies in Comparative International Development 32(1), 56–91.CrossRefGoogle Scholar
  35. Taylor, P.L.: 2005, ‘In the market but not of it: Fair trade coffee and forest stewardship council certification as market-based social change’, World Development 33(1), 129–147.CrossRefGoogle Scholar
  36. UNDP (United Nations Development Programme): 2006, Human development report (UNDP, New York).Google Scholar
  37. Valkila, J.: 2009, ‘Fair Trade Organic Coffee Production in Nicaragua – Sustainable Development or a Poverty Trap?’, Ecological Economics 68(12), 3018–3025.Google Scholar
  38. Valkila J. and A. Nygren: 2009, ‘Impacts of Fair Trade Certification on Coffee Farmers, Cooperatives and Laborers in Nicaragua’, Agriculture and Human Values. doi: 10.1007/s10460-009-9208-7.
  39. Vogel, D.: 2009, ‘The Private Regulation of Global Corporate Conduct, Achievements and Limitations’, Business & Society. doi: 10.1177/0007650309343407.
  40. Wilson, B. R.: 2009, ‘Indebted to Fair Trade? Coffee and Crisis in Nicaragua’, Geoforum. doi: 10.1016/j.geoforum.2009.06.008.
  41. World Bank: 2007, World Development Report 2008, Agriculture for Development (The World Bank, Washington D.C.).CrossRefGoogle Scholar
  42. Zehner, D. C.: 2002, ‘An Economic Assessment of “Fair Trade” in Coffee’, Chazen Web Journal of International Business Fall 2002.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  1. 1.Development Studies, Department of Political and Economic StudiesUniversity of HelsinkiHelsinkiFinland
  2. 2.Department of EconomicsAalto University School of EconomicsAaltoFinland

Personalised recommendations