How much is the farmer paid?
At Coffee Collective, we trade our coffee directly with producers. By eliminating the expensive middlemen, we are able to ensure that the payment for our coffee goes directly into the hands of the ones who produced it. This way, when you purchase your coffee from us, you know how much actually ended up in the hands of the producer, something that, if you ask around, is not commonly transparent within the coffee industry.
The system of trading coffee can be complex, which is why we have narrowed it down to one factor: The price we have paid, in comparison to the market price, which we have termed Quality Bonus.
When we buy coffee, we always evaluate its quality first. From this evaluation, we negotiate a price with the producer, recongnizing the extra work and resources they have implemented to create this quality. We always pay more than the market price, and how much more we pay, reflects how good we find the quality – i.e the producer gets a Quality Bonus on top of the market price.
The actual price we pay is agreed at Export level as well as at producer level for smaller producers. The Export level is the comparable level and what is often called FOB.
Transparency in coffee prices
The lower graph displays the Export price we have paid for Rosas coffee as well as the market price, and the Fairtrade price. The difference between the market price and what we have paid is the Quality Bonus. The actual FOB price we paid was 5,5 USD/lb.