In the highlands of Guatemala, indigenous Tzutuhil Mayans in the La Voz cooperative are sending local kids to college for the first time. In Papua New Guinea, the AGOGA cooperative is investing in a medical team to meet the health care needs of its isolated rural community. In Chiapas, Mexico, ISMAM farmers are learning to manage risk by diversifying their crop to include products like honey and chocolate. Near Lake Titicaca, in Peru, the CECOVASA cooperative is assisting members from Quechua and Aymara indigenous groups in transitioning to certified organic production and raising coffee quality.

These achievements are the fruits of the farmers’ hard work, their organization into cooperatives, and their participation in Fair Trade markets. The voices and stories in these pages are just a few examples of how Fair Trade is helping farming communities promote self-reliance, sustainable agriculture, improved social services, and women’s empowerment.

In 2001, TransFair inspired dozens of new coffee roasters and importers to join the Fair Trade movement. By year end, 120 coffee companies and an estimated 8,000 retail stores across the country were carrying Fair Trade coffees certified by TransFair USA.

Consumer access to Fair Trade Certified products expanded dramatically, with distribution through independent groceries, natural food stores, and food co-ops nationwide, along with a growing number of national supermarket and café chains, including: Safeway, Trader Joe’s, Starbucks, Seattle’s Best Coffee, Borders Books and Music, Whole Foods, and Wild Oats.

TransFair provided companies with marketing, promotional and public relations support to ensure the success of their Fair Trade Certified products.

Thanks to TransFair’s efforts, Fair Trade has a strong and growing presence within the Specialty Coffee Association of America. In 2001, the SCAA strengthened its Fair Trade Task Force and signed an unprecedented Memorandum of Understanding with TransFair, making a commitment to actively support Fair Trade through consumer education and industry advocacy. Also, SCAA members elected TransFair’s Kimberly Easson to serve on the association’s Board of Directors.

For the last three years, TransFair has hosted a large booth at SCAA’s annual trade show as a way to bring roasters and retailers together with representatives from producer cooperatives in Latin America, Asia and Africa. In 2001, Fair Trade was represented on several conference panels, and TransFair sponsored a lively reception for Fair Trade producers, buyers and allies. This event resulted in new sales and contacts for participating farmers, as well as growing industry awareness of Fair Trade.

TransFair and participating roasters and importers represented Fair Trade at several other important industry events, including Seattle’s Coffee Fest, Natural Products Expo, and annual conferences of the National Restaurant Association and the National Coffee Association.

Our rapid growth in the specialty coffee industry inspired Granum, Inc. to launch Fair Trade Certified tea in early 2001. Today, five tea blenders sell Fair Trade Certified tea. Fair Trade Certified chocolate and other products are coming soon.

Market growth for Fair Trade Certified Coffee in the United States

Campaigns To build consumer awareness and demand for Fair Trade Certified products, TransFair coordinates consumer education campaigns in key regional markets across the country. In 2001, we collaborated with the Songbird Foundation and the Northwest Shade Coffee Campaign on a nine-month initiative in the nation’s coffee capital, Seattle.

TransFair organized a speaking tour for Nicaraguan Fair Trade farmer Alexa Marin; trained dozens of volunteers; spoke before churches, unions, student groups and non-profit organizations; tabled at numerous community events; and helped convene an ongoing working group of Seattle-area Fair Trade advocates. A series of bus and billboard ads and a benefit concert by Bonnie Raitt, Jackson Brown and Keb ‘Mo (all sponsored by the Songbird Foundation) further encouraged Seattlites to buy shade-grown, organic and Fair Trade Certified coffee. Eight Seattle area coffee roasters began offering Fair Trade Certified coffees during or shortly after the campaign. Several regional and national supermarket chains now carry organic Fair Trade Certified coffee from Seattle’s Best Coffee.

Capitol Hill and City Halls Fair Trade Certified coffee is now being served in several locations on Capitol Hill in Washington D.C., thanks to 61 members of Congress who signed a letter to House Dining and Guest Services last summer. Efforts are underway to make Fair Trade Certified coffee available in the House and Senate dining halls as well. Also, numerous city halls across the country have passed resolutions in support of Fair Trade.

Campuses Fair Trade Certified coffee is now available at more than 200 colleges and universities across the US. Student Fair Trade campaigns are underway on at least 100 other campuses. We worked with Oxfam America to develop a Fair Trade Resource and Action Guide for student campaigns. Fair Trade farmers and TransFair staff are frequently invited to speak at campuses across the country.

Congregations Thousands of religious congregations are buying Fair Trade Certified coffee and educating their members about Fair Trade. In 2001, the Presbyterian Church (USA) joined several other denominations in launching a national Fair Trade coffee project in conjunction with roaster Equal Exchange. Several other roasters are marketing their Fair Trade Certified blends to faith communities in their areas. TransFair participated in the annual meeting of the National Council of Churches (representing 55 million members of Protestant denominations), the Leadership Conference of Women Religious and Call to Action in order to promote Fair Trade among people of faith.

TransFair USA Highlights 2001Partnering with Industry to Build the Market

The coffee crisis and the Fair Trade alternative received major media coverage in 2001. Stories appeared in USA Today,

The New York Times, The Washington Post, Newsweek International, Financial Times, Seattle Post-Intelligencer, Chicago

Tribune, Gourmet News, Supermarket News, National Public Radio, and BBC TV.

“As we help our communities understand their role in social and environmental issues, the daily ritual of drinking �Fair Trade Certified coffee or tea can serve as a concrete reminder of the inextricable link between our consumer choices and global sustainability.” Mary Ann Gaido, Sisters of St. Joseph of Orange

“We didn't know at first if our commitment to Fair Trade would result in increased coffee sales, or whether we were simply supporting a worthy cause. After selling more than twice as much Fair Trade coffee as projected in the first year, we know the difference Fair Trade is making in coffee communities and in our own business. Fair Trade is a true win-win.”Rick Peyser, Green Mountain Coffee Roasters, Vermont

“I used to be shy. I was ashamed to speak in public. Since taking courses in leadership and self-esteem through our co-op, I’ve been elected to the co-op’s Board of Directors. Now I help train other women.”Alexa Marin, PRODECOOP, Nicaragua

F A I R T R A D E M E A N S SELF-ESTEEM“It is a historic moment when the campesinos of the Grau Region sit together and confront the problems that face us. And it is a historic moment when people from the United States are here with us to find ways to protect our forests.”�Marcial Dominguez Merino, CEPICAFE, Peru

F A I R T R A D E M E A N S SUSTA INABIL ITY

Pounds Of GreenCoffee Certified

(annual)1.9 million 4.3 million 6.7 million

33 78 120

Fewer Than 1,000 3,000 8,000

Companies OfferingFair Trade

Certified Products

Estimated #Retail Outlets

1999 2000 2001

Fair TradeEmpowering Farmers and Communities

TransFair USA Highlights 2001Educating Consumers to Build Demand

Fair TradeSupporting Family Farmers, Protecting the Earth

A conversation between Kimberly Easson and Benjamín Cholotío

In May 2002, TransFair staff interviewed a number of Fair Trade farmers and co-op managers at the Specialty Coffee Association of America trade show in Anaheim, California. TransFair’s Marketing Director, Kimberly Easson, spoke with Benjamín Cholotío, General Manager of the Guatemalan cooperative La Voz que Clama en el Desierto (the Voice that Cries out in the Desert). In a conversation both sobering and inspiring, Benjamín shared the following:

Kimberly: Tell me about your cooperative.

Benjamín: At La Voz, we are all small producers, and through the co-op we export our organic coffee to international markets. The majority of people in San Juan la Laguna are coffee growers. The heart of San Juan and of Guatemala is coffee.

Kimberly: How has the coffee crisis affected farmers in your region?

Benjamín: People are desperate. The prices do not cover production costs. They are selling their land. They don’t fertilize their coffee trees. They can’t afford to send their children to school. They migrate since coffee is not profitable. They are abandoning the coffee fields. The women and children stay. It is sad that families can’t stay together and share.

Kimberly: You’ve told us that La Voz is producing organic coffee and selling it to Fair Trade markets. Tell me what impact that has had.

Benjamín: Organic production is a wonderful thing. It’s sharing the natural resources that our people have. We are interacting with nature, the shade and the birds, all of which help coffee production. Fair Trade has given us a premium over the prevailing

market price and with the extra income, we are improving the quality of our coffee. The fair price is a solution. It has given us the chance to pay a good price to our farmers. Those who are not in Fair Trade want to participate. For us it is a great opportunity. It gives us hope.

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Research indicates that small-scale farmers are the best stewards of the land. Farmers who participate in Fair Trade use traditional agro-forestry techniques and must implement additional measures to protect soils, streams and forests. Many co-ops use Fair Trade revenues to fund environmental projects, such as sustainable agriculture training, eco-friendly processing mills and organic certification.

The coffee crisis is forcing many unorganized farmers to cut down trees in order to plant food or bring in cash through timber sales. Fair Trade is helping family farmers continue their tradition of living in harmony with the land.

Fair Trade helps family farmers, like this co-op member in Peru, improve the quality of their coffee, achieve organic certification and increase shade cover on their farms.

“Ten years ago, our children couldn’t study past the age of eight because there was no bus to the school and we had no money. Now with revenues from Fair Trade, we have fixed the road and we have bus service. Our kids go to school with the help of scholarships from the co-op’s education fund. One of my kids is getting a business degree at the university and the other is in high school. This never would have been possible before.” Sabino Brenes, Coop El Dos, COOCAFE, Costa RicaBo

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Blanca Rosa Molina (center), President of the Nicaraguan co-op CECOCAFEN, spoke at events in Seattle. Here, Kari Hamerschlag (to Blanca's left) and Jeremy Simer (to Kari's left) of TransFair appear with Blanca and members of the King County Labor Council, which is promoting Fair Trade among its 100 member unions.

“Organic production is a wonderful thing. We are interacting with nature, the shade and the birds, all of which help coffee production.”

Benjamín Cholotío, La Voz, Guatemala

Shade-Grown �Nearly all Fair Trade Certified coffee is shade-grown, providing vital habitat for migratory songbirds and other wildlife, as well as a variety of food crops and medicinal plants.

Organic �Of the Fair Trade Certified coffee sold in the US over the last three years, eighty-five percent was also certified organic.

The prairie warbler migrates between

North America and coffee growing

regions in Central and South America.

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F A I R T R A D E M E A N S SCHOOLINGF A I R T R A D E M E A N S SUCCESS

�The Fair Trade Model

It is a pleasure to present you with TransFair USA’s inaugural annual report. With your help, we have achieved more than we imagined possible since we introduced Fair Trade certification to the US less than four years ago. Today, more than 140 companies sell Fair Trade Certified products in an estimated 10,000 retail outlets throughout the country. According to a 2002 Cone/Roper study, in the aftermath of September 11th, a record 81% of US consumers say they are likely to switch brands, when price and quality are equal, to help support a cause. There could not be a more compelling cause than Fair Trade nor a better time to support the growing Fair Trade movement.

Now more than ever, Fair Trade is literally a lifeline for small-scale coffee farmers. Due to global oversupply of low quality coffee, the price of coffee on the world market plummeted last year to an all-time low. The average price of washed arabica beans on the world market has declined from a 10-year average of $1.08/pound to $0.55/pound in the past year.

Small farmers and coffee pickers who are not receiving a Fair Trade price for their coffee are resorting to extreme measures to withstand the crisis — taking their kids out of school to work in the fields; selling off their farms or converting shaded coffee fields into timber or illicit cash crops such as coca and poppy; migrating to cities in search of work. One of the most tragic and widely publicized cases involved fourteen Mexican coffee pickers and farmers who fled their communities in Veracruz in May 2001 to look for jobs in the US. After a perilous border crossing, they died from dehydration and exposure in the Arizona desert.

I saw the devastating effects of the coffee crisis first-hand during a visit to Northern Nicaragua in December. In some villages, nearly all of the men had gone south to work in Costa Rica, leaving behind their farms and their families. Women who some years ago might have been war widows are now known as “las viudas del café”— the coffee widows.

The Fair Trade cooperatives I visited are faring far better. At a time when unorganized farmers are selling their coffee on the local market for twenty cents a pound, Fair Trade farmers are exporting their beans directly for $1.26 a pound. One co-op I visited was building an “eco-friendly” processing mill with Fair Trade revenues, helping to keep the forest intact and the streams clean.

Thanks to the combined efforts of participating companies, consumers, and allied organizations, TransFair USA certified more than 13 million pounds of Fair Trade coffee between 1999 and 2001, and the market expanded dramatically each year. Most important, small-scale coffee farmers earned $10 million more through Fair Trade prices than they would have received selling to local middlemen. This has enabled thousands of farmers to hold onto their farms, keep their kids in school, and afford basic necessities during this time of disastrously low prices.

We invite you to celebrate the growing success of Fair Trade in the US and to join us in redoubling our efforts to support family farmers at this critical time. Thank you for sharing the vision and helping us build this movement, �one cup of coffee at a time.

Paul RicePresident and CEOJune 2002

Board of DirectorsMichae l Sh imkin , Chai r Paul HawkenSusan MarxPau l R iceKr is ten Wol f

Migue l A l t ie r i , PhD (member 1999 - May 2002)Maureen Fen lon , OP (member 1999 - May 2002)

Staff (as o f June 2002)

Pau l R ice , P res ident and CEOHi la r y Abe l l , Deve lopment D i rec torSonia Ca l tvedt , Des ign and Market ing Assoc ia teScot t Codey, Washington DC Campaign Coord ina torKimber ly Easson, Director o f Market ingHea ther Franzese, Deve lopment Assoc ia teKar i Hamersch lag , Nat iona l Campaign ManagerDeborah H i rsh , New Bus iness Deve lopmentJade Huang, Cer t i f i ca t ion ManagerJohn Kea th ley, Opera t ions ManagerKenya Lewis , Publ ic Re la t ions ManagerNina Lut t inger, Account ManagementTish Pa t terson, Of f ice Ass is tantDav id Poh l , Ass is tant to the CEO, Spec ia l Pro jec ts Coord ina torNate Schaf f ran , Account ManagementSteve Se l le rs , Chie f Opera t ing Of f icerYami le S leb i , Producer Re la t ions Manager

We would a lso l ike to acknowledge the interns, vo lunteers , �pro bono serv ice providers and former staf f who have made invaluable contr ibut ions in the past year. They are too many �to name, but they have our heart fe l t grat i tude .

FundersTransFair USA would l ike to thank the fo l lowing people and inst i tu-t ions, who have provided cr i t ica l f inancia l resources to help Fair Trade grow. Due to space l imitat ions, we haven’ t named al l indiv idual donors , but we are grateful for support both large and smal l .

Adr ian Domin ican Min is t r y Trus tAv ina GroupAshoka: Innova tors fo r the Pub l icCa tho l ic Hea l thcare WestRebecca D iDomenico Domin ican S is ters o f San Rafae lFord Founda t ionFund for Southern Communi t iesFur thur Founda t ionGlaser Fami ly Founda t ionRichard and Rhoda Go ldman FundGreenv i l le Founda t ionIdy l l Founda t ionPau l NewmanLawson Va lent ine Founda t ionAr thur and Susan L loyd Founda t ionTimothy MaherA l lan Pau lsonSa in t Igna t ius Church (San Franc isco )Sa in t Joseph Hea l th Sys temSchwab Founda t ion fo r Soc ia l Ent repreneursh ipSh imkin Founda t ionS ins inawa Domin ican S is tersS is ters o f Char i ty o f S t . E l i zabethS is ters o f Mercy o f Bur l ingameSis ters o f S t . Domin ic o f Miss ion San JoseSis ters o f S t . Franc is o f Ph i lade lph iaS is ters o f S t . Joseph o f Carondo le tS is ters o f S t . Joseph o f Orange (Care fo r the Poor Fund)S is ters o f the Presenta t ionS is ters , Ser vants o f the Immacula te Hear t o f MaryCaro l ine Thayer B land 1990 Revocab le Trus t

Fair Trade Means Solidarity�With help from TransFair, Equal Exchange, PRODECOOP (Nicaragua) and COOCAFE (Costa Rica), the Association of Small Coffee Producers of El Salvador (APECAFE) raised $75,000 to rebuild 500 homes and vast sections of farmland that their members lost in the earthquakes in January and February of 2001. We join APECAFE in thanking the companies and individuals who contributed to TransFair's El Salvador Earthquake Relief Fund.

“Without your support, 235 men, women and

children would not have been protected from

the harshness of the weather. For them and

for us, it is invaluable to know that there are

people who are willing to open their hearts

to a noble cause. Thank you.” — A l f r e d o R u m a l d o A u s e n c i o , A P E C A F E , E l S a l v a d o r

Front cover photo credi ts : �Dav id Poh l ( le f t ) ; Bob Fan, Green Mounta in Cof fee Roasters ( r ight )

TransFair USA at a Glance �Dear Friends

FAIR TRADE

FAIR TRADE

CERTIFIEDSM

FAIR TRADE

CERTIFIEDSM

2 0 0 1 A N N U A L R E P O R TT R A N S F A I R U S A is to build a more equitable and sustainable model of international trade that benefits producers, consumers, industry and the earth. We achieve our mission by certifying and promoting Fair Trade products.

Fair Trade certification is a guarantee that clearly-defined criteria are met in the production and trade of agricultural commodities. The Fair Trade criteria for coffee, the leading Fair Trade Certified product worldwide, are:

Direct trade — market access for small-scale farmer cooperatives Fair prices — $1.26 per pound, with a $0.15 additional premium for certified organic coffee Access to credit Sustainable agriculture

Fair Trade is an opportunity for consumers to learn about the social and environmental impacts of conventional trade, and to effect change through what is for many a daily coffee ritual.

Fair Trade is a new model for business based on the “triple bottom line” — a fair deal for farmers and workers, environmental sustainability, and profitability for all parties in the chain of production.

Fair Trade is an international movement in commodities and crafts with roots going back fifty years. TransFair USA is one of seventeen national Fair Trade certification initiatives spanning Europe, North America and Japan. Together, these national initiatives make up the Fair Trade Labelling Organizations International (www.fairtrade.net).

The Fair Trade DifferenceFair Trade provides a living wage for farmers, which is especially critical during this unprecedented slump in world coffee prices.

US sales of Fair Trade Certified coffee have provided more than $10 million in additional income for small-scale farmers over the past three years. As the chart below illustrates, the dramatic decline of coffee prices on the world market has widened the gap between the market price and the Fair Trade floor price, amplifying the benefit of Fair Trade for farmers.

AverageWorld Market Price $1.20

$1.5 million $3.1 million $5.6 million

$0.80 $0.50

$0.36 - $0.60 $0.24 - $0.40 $0.15 - $0.25

$1.26($1.41 for certified organic)

$1.26($1.41 for certified organic)

$1.26($1.41 for certified organic)

EstimatedPrice Farmers Received

From Middlemen

Additional FarmerRevenues Generated By

Fair Trade in the US

Fair TradeFloor Price

1999 2000 2001

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T R A N S FA I R ’ S MISSION

T O T A L R E V E N U E S : $ 6 8 6 , 5 3 9

Interest Income�$10,217

Trade Show �and Tour Fees�$74,363

Miscel laneous�$5,507

Cert i f icat ion Fees�$307,781

Grants and�Donat ions

$288,671

Statement of Activities�FOR THE YEAR ENDING DECEMBER 31, 2001

Audi ted f inanc ia l s ta tements ava i lab le upon request .

T r a n s F a i r U S A1611 Telegraph Avenue, Suite 900 Oakland CA 94612 · 510·663·5260 office · 510·663·5264 fax transfairusa.org

T O T A L E X P E N S E S : $ 7 2 1 , 3 1 3

PROGRAM SERVICES �Market ing�

$363,234

Cert i f icat ion$87,033

Consumer Educat ion$122,968

Total : $573,235

Trade Shows �and Tours �$80,852

Administrat ion$74,856

Fundrais ing$73,222

Paul Rice (right) and Congressman Sherrod Brown

visited Fair Trade producers in Nicaragua last

December. Here, they look at parchment coffee drying

in the sun at a cooperative's processing plant.

“The more Fair Trade coffee we sell, the more stability we have in our community, and the less people are forced to migrate.”

Jorge Aguilar, ISMAM, Mexico

CECO

CAFE

N, N

icar

agua

FA I R T R A D E M E A N S STABILITY

now more t h a n e v e r