Fancy a cappuccino with an extra shot of conscience?

You pay £2 for a coffee, yet the farmers growing it live on beans. Not any more. Kate Watson-Smyth on why a latte needn't leave a sour taste in your mouth

When US-style coffee bars arrived in our high streets 10 years ago, the main thing you had to worry about was getting the jargon right. Did you want a "tall skinny latte with wings" or a "double dry cap to stay"? Now we've sorted out the vocabulary, more of us are starting to worry about where the beans come from and whether the farmers are getting a fair deal.

The well-documented coffee crisis has seen thousands of growers, who traditionally work on small plots of inaccessible land, struggling to make ends meet. Despite our blossoming love affair with coffee, over-production of largely low-quality beans (particularly in countries not traditionally involved in coffee-growing), has led to a 70 per cent drop in prices since 1997. For many farmers, this means the difference between their children going to school and being able to afford basic health care.

The fair trade movement, which began in Holland 14 years ago, is an attempt to address this problem. Growers of high-quality beans form themselves into co-operatives and sell directly to the supplier, thereby cutting out the middle man and so ensuring a higher price for their coffee. At the moment, farmers who are not members of the Fair Trade Organisation can expect around $70 (£38) for a 45kg bag of green coffee beans, whereas a fair trade supplier can command $126 a bag. If he is also certified organic, this price increases to $141.

Fair trade is the fastest growing segment of the UK coffee market, with consumers buying more than 2,000 tons from shops and supermarkets last year - but under 400-tons-worth in drinks from Britain's thousands of coffee bars. Well, that's all set to change.

Today sees the opening of the first of a chain of entirely fair trade coffee bars, which has been created by Oxfam to benefit growers. Progreso (progress in Spanish), is the brainchild of the British charity and a Honduran grower co-operative called La Central. Oxfam owns 50 per cent of the company, three co-operatives - from Ethiopia, Honduras and Indonesia - own 25 per cent and the remaining quarter will be held in trust and used to benefit the wider coffee growing community.

The first shop is in the Thomas Neal Centre in London's Covent Garden, with a second planned for the capital's Portobello Road before the end of the year. Oxfam, which has spent £120,000 setting up the first two cafés, is hoping to open 20 such shops during the next three years. And every cup of coffee sold is certified Fair Trade and organic. And it doesn't end there - also on offer will be fair trade smoothies, chocolate, honey and tea.

"Ten years ago it would have been very hard to set up a café like this but now the moment is right," says the chain's managing director, Wyndham James. "People want to know where their food is coming from."

And other barriers have come down too. "We know there is now enough quality coffee in Fair Trade for large quantities of it to be made, which has traditionally been the problem," explains Mr James, who is hoping that the bigger chains will see what Progreso is doing as a challenge and that it will have a knock-on effect throughout the industry. But he is clear that Progreso - which is being operated commercially and has no charitable status - is about business just as much as ethics. "This café will stand or fall by the quality of its coffee," he says. "It has to be good value, as well as being based on good values. This is not just a marketing venture. It will give the growers a place to showcase their product and prove there really is good quality fair trade coffee out there."

Although Progreso is the first chain of its kind, it is not alone in adopting fair trade coffee. Earlier this year, Marks & Spencer - which claims it has an 11 per cent share of the branded coffee-bar market and is the third largest coffee shop in the UK, following Starbucks and Costa - switched the coffee used in its 198 Café Revives to that certified by the Fair Trade mark. Serving 20 million cups of joe a year, M&S estimates its switch will increase the volume of fair trade roast and ground coffee sold in the UK by about 14 per cent. The company's head of food technology, David Gregory, says: "We are switching to fair trade coffee in response to demand from our customers."

Jimmy Navarro, the director of the Green Development Foundation and European representative of La Central, says that customers need to be more demanding if companies such as Starbucks are to be forced to follow suit.

"We need to create a demand for fair trade coffee," he says. "We want to show people that they can have a decent cup of coffee that is organic and fair trade for perhaps only 10p more than they would have to pay in the big coffee chains. (A regular latte or cappuccino is £1.90 at Progreso and a single espresso costs £1.20.) "We want to show the world that you can do business in a sustainable way, make good money and get everyone to follow suit."

In Honduras, there are around 120,000 farmers of whom only around 10,000 are members of Fair Trade co-ops. "The reason there are so few co-ops is that, during the 1970s and 1980s, the government put a lot of pressure on farmers to remain out of co-operatives," says Mr Navarro. "It told them that co-ops led to revolution and were basically a communist idea. In Nicaragua, the neighbouring country, a lot of the revolution was based around the idea of promoting co-ops. The farmers believed the propaganda and stayed with what they knew. This idea is gradually changing."

There are 12 co-ops affiliated to the Progreso movement, representing 120,000 farmers. Only three of those co-ops will supply the coffee but all 12 will profit from the company. As the chain grows, more of the co-ops will be called on to supply beans.

"When Fair Trade began, everyone said ... it couldn't work, but it has been very successful," says Mr Navarro.

Of the UK's biggest chains, Costa cafés offer fair trade coffee if you ask for it. A spokesman said the company would be keeping a close eye on Progreso. "We are keeping the whole issue of fair trade coffee, and whether we would move over to it completely, under consideration," he said.

Starbucks insists that it pays a fair price for its coffee. A spokesman said that 97 per cent of its coffee was bought for $1.20 per pound. Last year, the open market price fell to 55 cents a pound. The company also said that last year it bought 3.1 million kilos of fair trade coffee, double the amount bought the previous year.

Caffeè Nero says it buys directly from the producers, paying more than the open market price, but has no plans to change to fair trade at the moment.

But if the Fair Trade movement does take off, Oxfam is not worried about the bigger companies pushing them out of the market by copying their idea. As Mr James says: "Imitation is the sincerest form of flattery and if the big companies decide to follow our lead, that can only be a good thing for the coffee farmers.