Tapping intíl markets with fair trade coffee
Rural Thai coffee goes global
By Burmese Journalist
Hilly, beautiful Som Poy village was once famous for its high quality opium. Now the village is known on the world market again – this time for its coffee.
“After growing coffee, our standard of living is better than before, because people go to work and we do not care about people who use drugs,” said Ta Jabranaprivan, who has never used opium.
Sitting in a small cottage, Ta said villagers now have better infrastructure, a new water supply, a smooth road and more income. During the past, he said, many people were addicted to opium and didn’t want to work. Even housewives and teenagers took the drug.
Som Poy is a village more than three hours south of Chiang Mai, up a sometimes slippery road through thick forest and moving clouds. All the villagers are Karen, and 57 households grow coffee on about 400 to 500 rai.
It is unbelievable that coffee from a remote, small, undeveloped Thai village is gaining a foothold in world markets in such a short time. The truth is that a non-profit organization called Integrated Tribal Development Program (ITDP) is helping the farmers tap international markets by fair trade standards. With the help of ITDP, Som Poy coffee is now sold by Starbucks, a major US corporation, and a Japanese company called ION.
According to Boonchoo Klerdoo, agricultural extension officer for ITDP, each Karen family can produce a maximum of five coffee bags per year, with each bag equaling 1.5 kilograms. Besides coffee, the local farmers grow rice, cabbage, kidney beans and some vegetables.
“Now we’ve got a secure market in the US and Japan. Soon we will expand the market,” explained Boonrat Kijaroonchai, manager of the Thai Tribal Arabica Coffee and Marketing Project for ITDP. “ASEAN countries and New Zealand are included on our list of potential markets. Eight countries in Asia, including Malaysia, Singapore, Hong Kong, Indonesia, Taiwan and Korea, comprise ITDP’s targeted market area.”
Som Poy has its own brand name, Muan Jai, which means “happy heart” in Thai. European countries like Netherlands, Switzerland, France and Australia have become new clients.
“Before Starbucks, we sold coffee berries for 6 baht per kilo,” said villager Nam Malakir Khao, 45, who grew opium for 20 years before switching to coffee. “And then Starbucks came in 2003 with the help of ITDP. We got a skyrocketing price and sold at 12 baht per kilo and now 15 baht per kilo. Starbucks is good for us. I got a total income of 10,000 baht last year.”
Tachou Boranath Prayvan, 59, has had similar success.
“In the opium age, I earned a total income of 10,000 per year,” he said. “Now, in the coffee age, I get a yearly total income of 13,000. But neither coffee nor opium is my main source of income. Actually, we grow rice to eat.”
How fair trade works
ITDP was launched over 16 years ago by an American agricultural expert named Richard Mann. He worked with the Thai government to create alternative crops to opium for ethnic Karen minorities residing there.
ITDP was also lending a hand to other villages in this region to grow opium-substitute coffee. The region has nine villages – eight Karen and one Hmong – constituting a total population of 675, according to the data provided by Starbucks and ITDP. Ethnic groups from elsewhere across northern Thailand are also working together to grow coffee with the help of ITDP.
The hill tribes are also aided by Lanna Café, which kicked off in 2001 thanks to the Wakachiai Project, another NGO that has been exporting coffee in accordance with fair trade standards since 1997. It aspires to launch high quality Thai highland coffee worldwide and to assist the coffee producers of the Thai Hill tribes who do not have direct access to the market.
In developing countries, farmers’ livelihoods hinge on the rise and fall of crop prices. Fair trade promise farmers fixed prices for their products, whatever the fluctuating prices in world markets. Fair trade guarantees a minimum price.
Starbucks started to buy Som Poy coffee in 2003. Three thousand kilograms of coffee berries were exported by plane to Seattle, where the publicly listed US company is based. Starbucks bought 33 tons the following year. Small coffee shops in Bangkok and Chiang Mai also buy another four to five tons of Som Poy coffee.
Practically, customers don’t know what fair trade is.
“Customers come here because ours is a big well-known [shop],” said Archarawan, 28, supervisor of the Starbucks coffee shop on Nimmanhemin Road in Chiang Mai. “Customers know that Starbucks maintains excellent coffee quality. Starbucks coffee shops in Thailand keep the same quality as those in US. I never heard of customers asking about fair trade coffee. I think most Thai customers don’t know about fair trade coffee.”
A quick survey of customers proved this to be true.
“I don’t know fair trade coffee,” said a young man who didn’t want to give his name. “I just want to sit with my sweetheart at a prestigious coffee shop like Starbucks.”
Coincidentally some villagers from Som Poy said they had never heard of Starbucks. All they know is that their lives seem better at the moment.
“Now coffee is more profitable than opium,” said villager Pri Khri Kasai. “We have enough food to eat and we will have a health center soon.
Facts & Figures about Starbucks Coffee Company
Founded In -1971
Headquarters -Seattle, Washington, USA
Revenue -US $7.786 billion (2006)
Things to know about coffee: 1kg of coffee berries = 100 cups of brewed coffee