Fair Trade Day finds movement struggling with success

Groups jockey to certify an increasingly blurry vision of fair trade

Michael Fitzgerald By Michael Fitzgerald

Fair trade is becoming a very big deal; people in more than 70 countries on Saturday marked the 12th annual World Fair Trade Day. There was plenty to celebrate: people now buy billions of dollars of fair trade-certified goods. But the movement is also fraying in the U.S. and elsewhere, and that has some crying foul about the movement.

Coffee berries in Colombia. (Reuters)

The Fairtrade Labeling Organizations International (FLO), based in Bonn, Germany, has 25 members, including 19 organizations that license fair trade certification marks. But other groups also certify Fair Trade goods.

To complicate things further, the U.S. FLO licensee, TransFair, renamed itself Fair Trade USA, and then a year later split off from FLO, creating a name situation Abbott and Costello would love.

That’s because of an American fair trade pioneer, Paul Rice. As head of the nonprofit TransFair, Rice helped establish fair trade certifications for coffee beans, bananas, chocolate (fair trade’s Big Three) and thousands of other products, including, as of March, chewing gum (though that was not certified by Fair Trade USA). Growth has been strong — Fair Trade’s sales grew 63 percent in the U.S. last year. In New Zealand, fair trade sales grew 24 percent in 2011, hitting $45.4 million ($25 million of which was coffee). In South Africa, sales nearly quadrupled. But Rice thought the $5.7 billion fair trade movement needed to have a bigger impact, and last September he split with FLO. His stated goal is to double fair trade-certified sales in the U.S. by 2015.

To do it, he’s working on a controversial strategy to give fair trade certification to large plantations and farming estates owned by multinational companies, an approach that is leaving many fair trade advocates feeling betrayed.

Smaller farmers historically have been the backbone of fair trade efforts. Today’s movement started, after all, when a Dutch Jesuit priest working in Mexico wanted to help small farmers lead better lives. Rice himself is rooted in this tradition. He ran a coffee co-operative in Nicaragua.

Now, as Rice embarks on his new mission, smaller fair trade farmers fear they will be crushed by large companies, and advocates fear that customers might be fooled into thinking they’re not patronizing large corporations.

“Consumers think they’re buying from small farmers at a good price. That’s been the value proposition forever,” Rob Everts, co-president of Equal Exchange, a West Bridgewater, Massachusetts, distributor of more than 40 fair trade products.

Equal Exchange once sold coffee beans from Paul Rice’s Nicaraguan cooperative. But even before Rice split with FLO, Equal Exchange had moved away from the Fair Trade emblem in favor of yet another fair trade certification, from IMO, a Swiss organization.

Everts says that Rice’s creation of Fair Trade USA creates a real division in what gets called fair trade. “It will lead to confusion, or people buying something that isn’t what they think it is.” He and others see it as a death knell for small farmers.

“The small producers cannot compete…” Santiago Paz López, co-manager of CEPICAFE, a Peruvian farmer’s association, told the East Bay Express.

Unfair trade?

Fair trade already doesn’t always mean what we think. FLO-certified fair trade tea and flowers, for instance, likely come from large operations, not small farmers working in a co-op. Chocolate bars and other products can qualify as fair trade with as little as 25 percent of their content produced in a fair trade manner. Labels can claim “Fair Trade ingredients” if as little as 10 percent of the product’s dry weight is produced to FLO specifications (in January, that requirement was shifted to 20 percent, and if fair trade versions of ingredients are produced, they must be used or the label cannot be, regardless of weight).

Bloomberg News last year documented a number of instances where companies were given Fair Trade certification despite violating Fair Trade tenets, including using child labor to harvest cocoa. The article also showed that big companies like Nestle’s, the world’s largest food company, can’t yet prove that they are helping small farmers. As a result of those shortcomings, in the U.S. the movement is under fire for failing to ease poverty and for having an outdated model. 

“Narrow and Privileged”

Rice recently said Fair Trade only works for a “narrow and privileged group,” which sounds odd given that these so-called privileged people are still small farmers working in commodity crops. His argument is that “the historic fair trade model is not scalable in our view and we are not content just serving a few million farmers a year while billions of people around the world struggle with poverty.” You can read for yourself his extended thoughts on the matter, and decide whether he’s nobly misguided or breaking the mold.

Mary Jo Cook, Fair Trade USA (Fair Trade USA)

Ultimately, Rice is also trying to expand fair trade principles on labor to farm workers. Mary Jo Cook, Fair Trade USA’s chief impact officer, told Latitude News that the Fair Trade movement excludes most of the supply chain for companies like Wal-Mart and Starbucks. Fair Trade USA’s goal is to change this.

Cook says any plantation it certifies as Fair Trade would have to adopt the same environmental, workplace and farming practices that currently exist under FLO’s specifications, at least as they apply to tea, flower and banana production. Rice’s innovation is that big plantations would also have to establish worker-run, democratically organized community development programs that would be guaranteed a percentage of sales, to be distributed as voted on by the workers. An early example Cook gave is of a plantation where workers voted to spend the money on programs funding eyeglasses, dental care and computer training.

Forget fair trade; go carbon neutral

Whether big plantations will actually let workers organize in this way will be interesting to see; Cook declined to comment on whether Rice is a new Che Guevara. She does say that “this will generate more ideas and will ultimately be good for fair trade,” Cook says.

That case remains to be made. One thing’s certain: there will be more Fair Trade labels coming to the U.S., if not more fair trade. FLO, the umbrella organization Rice split away from, is setting up shop in the U.S. in 2013.

If all the machinations of fair trade are giving you a headache, relax. The argument over fair trade might be superseded by an effort to create carbon neutral food. The first carbon-neutral chocolate, transported by sail, just hit Britain.

Due to a reporting error, the original version of this story said TransFair changed its name to Fair Trade USA as it split from the FLO in September 2011. The name change happened in October 2010. Ingredient label percentages were changed from 10 percent to 20 percent in January. The story also contained language that suggested Fair Trade USA had certified chewing gum as Fair Trade. The certification was done through another organization.