Today’s New York Times (A Question of Fairness) discusses changes that are coming to the certification system for fair trade products sold in the USA.
Some background on fair trade: Fairly traded products sell for higher prices, but have been produced and traded under specific standards. The common understanding is that the farmers are treated fairly – that is, they receive a “fair” and equitable price for their goods. Products such as coffee, tea, chocolate, and sugar are the first that come to mind, as these are crops that are produced by small holder farmers (ie, those with little bargaining power). The standards are voluntary in the sense that there is no regulatory “bite” backing up their use or misuse.
One of the primary goals of Fairtrade is to improve the living standards of producers who raise agricultural products that are traded internationally. The main mechanism is through fair trade standards, and higher prices, which are “….designed to support the sustainable development of small-scale producers and agricultural workers in the poorest countries in the world.”(http://www.fairtrade.net/aims_of_fairtrade_standards.html). The standards lay out specific rules about farm size, minimum prices paid to farmers, and an additional premium that can be invested in the farmer’s community.
Fairtrade International administers the standards. Fairtrade International has members around the world, and the members are both producer groups and labeling initiatives. The USA branch is Fair Trade USA. According to the NY Times article, Fair Trade USA will sever its ties with the international organization at the end of this year. In doing so, the emphasis on small farmers will be dropped. The marketing logo displayed on products sold in the US will be redesigned, but will still sport the phrase “fair trade.”
In my opinion, the continued use of the phrase “fair trade,” which is already strongly associated with small scale, sustainable farming, will be deceptive. Consumers who buy fair trade products will assume they are supporting small scale farmers.
As firms grow larger, so do their quantity requirements. One easy way to meet the need is to change (or water down) the standards, so that more of the current supply meets the so-called fair trade standard. However, there are other ways to meet the greater procurement needs of an expanding market for fair trade products. One solution is for buyers of fair trade products (typically intermediaries) to actively recruit new fair trade producers and/or producer cooperatives. While this requires more effort on the part of the companies, by doing so, the firms would be truly expanding the supply of fair trade products (which is in keeping with the concept of fair trade).
I hope the main purveyors of fairly traded products – Whole Foods, Starbucks, and Green Mountain Coffee Roasters, according to the article – will take a stand. A good initial step is to refuse to display a fair trade label on products of large farms. A second step would be to engage in serious discussion with Fair Trade USA to change the standards; after all, these companies have a fair amount of clout (through quantity of product purchased).
And as consumers, we need to let these companies know that we want to keep the small-scale farm focus in the fair trade label.
I work for Equal Exchange, one of the other companies featured in this article. We were the first company to sell Fair Trade coffee and other food products in the US, starting 25 years ago. We also happen to be a worker-owned co-operative, and have been dismayed at the weakening of standards in the FT certification world. The move by FTUSA is outrageous, but not unexpected. If you look at their tax returns (available on their website), you will see that they have received millions of dollars in donations from Green Mountain, WalMart, Levis, etc. at the same time that they have moved to weaken the global fair trade standards. Paul Rice and his top aides get salaries that top $200,000, even though his non-profit lost $1 million in 2010. It’s a bit unrealistic to expect the companies that have funded this push for lower standards to now push for higher standards.
The real way to support small farmers, is to purchase only from companies that buy exclusively from small farmer co-operatives.