CANTON, MA—March 7, 2002—Equal Exchange, the nation's leader in fairly traded gourmet coffee, announced today record payments of $960,000 in above-market fair trade premiums to small farmer cooperatives in 2001. With coffee growing communities in many developing nations continuing to struggle with record low market prices and deepening poverty, a growing number of small farmers are benefiting from their trade partnership with Equal Exchange.

Equal Exchange's fair trade premium total is based on its 2001 purchases of 1,768,000 pounds of certified fair trade coffee - a record amount for any U.S. coffee wholesaler or retailer. The premium is the difference between the going market price and the fair trade mandated floor price of $1.26 per pound ($1.41 if certified organic). With the conventional market dropping as low as 44 cents, these above-market premiums often make the difference between a family getting by and being forced off the land.

Santiago Paz, General Manager of CEPICAFE, a small farmer cooperative in Peru, explains, "The above-market premiums earned from fair trade have enabled our members to invest in improving their farms and acquire small machinery, all of which helps to improve coffee quality. In addition, this added income allows us to fix up our homes, cover medical expenses, and provide an education for our children."

The price for green coffee beans, the worlds most widely traded commodity after oil, has hit its lowest level in 100 years. For small farmers, who grow over half of the world's crop, the situation has gone from difficult to catastrophic. A two-year slump in prices - from $1.45 in December 1999 to 45 cents today - has created an ongoing economic disaster in dozens of developing countries. While the US coffee industry saved an estimated two billion dollars in 2001 alone due to lower green bean costs, the economies of many already poor, rural areas have collapsed. Tens of thousands of farmers from Mexico to Tanzania have abandoned their farms. Farmers do not have money for basic necessities such as food and medical care, and malnutrition has skyrocketed in many regions.

Even during times of higher coffee market prices, the standard trading system works against most small farmers. The farmers often lack access to buyers within their country, to market information and to credit. These factors leave them vulnerable to exploitation by a variety of intermediaries in the supply chain. To address some of these problems, and to bring consumers closer to the source of their coffee and tea, Equal Exchange introduced the fair trade model to the US in 1991.

Equal Exchange's performance in 2001 provided continued evidence that fair trade is a viable business model. Despite paying up to three times that of its competition for coffee imports, the company met its profit goals for the 11th time in 12 years and grew total sales by 7%. To keep up with the growth in current and projected demand Equal Exchange expanded its workforce by 17% in 2001 and will grow by another 27% in 2002, bringing total staff size to over 50 employees.

The record payments to farmers were possible due to increased product sales across all sectors and the movement of Equal Exchange's products into new distribution channels. New partnerships with Presbyterian Church USA and other denominations were an important contributor to Equal Exchange's growth and helped build their public profile. Equal Exchange sees a growing desire among consumers to know the environmental and social background of the food they buy as another factor behind increased demand for Equal Exchange's fairly traded coffee and tea.

Equal Exchange, the pioneer and U.S. market leader in fair trade coffee since 1991, is a full service provider of specialty coffee and premium tea to supermarkets, natural food stores, restaurants, colleges and places of worship across North America. 100% of Equal Exchange's products are fairly traded, and the firm offers the world's widest selection of fairly traded coffee, and four varieties of organic, fair trade tea. Based in Canton, Massachusetts, Equal Exchange is also a market leader in certified organic coffee with over 20 varieties in its product line. Equal Exchange is structured as a for-profit, democratically managed, worker cooperative, owned and controlled by its worker-members.

Equal Exchange has been recognized repeatedly for the example it has set in challenging entrenched norms in commerce, and for advancing workplace democracy, organic agriculture, and the interests of small-scale farmers. Through its own success and its work in educating consumers and retailers, Equal Exchange has helped to spur the entry of other gourmet coffee companies into the fair trade coffee niche.