The Fair Trade Movement

Great products, tremendous impact

For more than 60 years, fair trade—a trading partnership based on dialogue, transparency, and respect—has contributed to greater social and economic equity and to protection of the global environment. In the past few years, public interest in finding quality products that make this kind of impact on communities has increased steadily, offering grocers an opportunity to make even greater change by choosing fair trade.

Fair trade actors

Fair trade continues to move forward through the efforts of consumers, entrepreneurs, nongovernmental organizations, farmers, artisans, and communities. While there are many seals and systems, in fair trade there are two types of organizations:
 
Product Certification—Certification audits the supply chains of specific products from point of origin to point of sale. In North America, the best known certifiers are TransFair Canada and TransFair USA. They license cocoa, coffee, cotton, fruit, nuts, olive oil, quinoa, rice, spices, sugar, tea, vanilla, wine, and other products. Traders who purchase items under the Fairtrade Labeling Organizations International (FLO) system agree to four criteria: pay the FLO minimum price for that product; pay a premium that producers can invest in development; partially pay in advance if producers ask for it; and sign contracts that allow for long-term planning and sustainable production practices. FLO also establishes product-specific standards. Other product certification bodies, such as the Institute for Market Ecology (IMO), employ similar criteria for human rights, working conditions, and a "fair share" of the price, and they evaluate a broader list of products.
 
Organizational Evaluation—The World Fair Trade Organization  and the Fair Trade Federation evaluate organizations for their full commitment to Fair Trade. In North America, Federation members work in a broad product range from coffee, tea, olive oil, yerba mate, rice, and chocolate to stationery, baskets, soap, reusable shopping bags, housewares, and unique gifts. They commit to nine principles in all of their work: create opportunities for marginalized producers, develop transparent and accountable relationships, build capacity, promote fair trade, pay promptly and fairly, support safe and empowering working conditions, ensure the rights of children, cultivate environmental stewardship, and respect cultural identity. Each organization undergoes a rigorous process to evaluate their trading practices and the depth of their commitment to these principles. By approaching business and development in a holistic way, members work to make trade a tool to alleviate poverty, reduce inequality, and create opportunities for people to help themselves.
 
While the organizations above focus on either products or organizations, other actors expand support among consumers. The Fair Trade Resource Network (www.FTRN.org) and Fairtrade Towns campaigns provide tools to educate communities about fair trade.

Great products, tremendous impact

Whether sourcing from Fair Trade Federation members or buying certified products, grocers have the opportunity to create a tremendous impact for producers.
 
Fair trade organizations seek out producers marginalized from mainstream market access. While small farmers produce the majority of bananas, plantations have squeezed them out of much of the export market. Many Peruvian banana farmers with less than one hectare lack the volume, information, and power to negotiate with multinational companies. In 2008, 1,400 families united to create the Central Association of Small Producers of Organic Bananas (CEPIBO), and in 2010 they found their first U.S.-based partner in Equal Exchange/Oké USA. Run by the growers themselves, CEPIBO pools resources to provide access to the international market. With only a few truckloads available initially, Equal Exchange’s long-term commitment will allow CEPIBO to increase available supply in the months ahead by bringing more producers into the supply chain.
 
In the same way, fair trade works to enhance producers’ capacities. Good Paper (www.goodpaper.com) works with Cards from Africa (www.cardsfromafrica.com) in Kigali, Rwanda to break the cycle of poverty for young people orphaned by the 1994 genocide and HIV/AIDS. CfA provides job training and stable employment with the goal of teaching them the skills to one day start their own business making high-quality, handmade greeting cards. By teaching valuable skills and fostering self-worth, CfA hopes to develop leaders who will contribute to a better quality of life for all Rwandans.
 
Fair trade organizations also try to use the rich heritage that producers already possess to combat economic poverty. Eighth Wonder  partners with cooperatives in 18 communities in the Philippines to import heirloom rice. These traditional varieties are more resistant to pests and diseases, have low fertilizer requirements, and have been adapted for ease in harvesting and storing. Yet, without support, many farmers have turned away from this kind of farming, and at least 25 percent of the terraces in the region are now abandoned. Eighth Wonder supports farmers’ efforts to increase production based on traditional techniques by opening markets in North America. Through their partners, workshops are also provided to help farmers increase quality and more effectively participate in the development of their communities.
 
Through these and many other examples, certified products and Federation members act as positive catalysts for change.

Confusion, competition, opportunity

Awareness of fair trade—and a willingness to choose it—is growing in North America.
 
FTO’s sales grew by 56 percent between 2004 and 2008; globally, total fair trade sales topped $4 billion in 2009. A 2008 study by Alter Eco USA indicated that 71.3 percent of the U.S. consumers surveyed—by contrast with 47.5 percent of Europeans—were aware of the term fair trade.
 
At the same time, fair trade tries to make its voice heard in a crowded marketplace. Its distinctive characteristics remain unknown or misunderstood amid labels such as organic, green, and natural. The same study revealed that less than 6 percent of those surveyed could name a Fair Trade Organization unaided, whereas 97.2 percent believed a conventional company (with a small number of fair trade-certified products) only sourced according to fair trade principles.
 
Amid this confusion, the North American fair trade community is engaged in an ongoing debate about how to most effectively create change for farmers and artisans.
 
Some argue that mainstream vendors should not be actively engaged because they spout fair trade rhetoric without altering the practices that harm artisans and farmers in the first place. They believe that conventional companies’ support for fair trade is a gimmick, which will only be employed where it is useful, and that the impact for producers outweighs straight sales figures.
 
Others make the case that increasing volume is the best way to create impact for producers and that only by expanding connections to large-volume conventional businesses can change occur. They point to the limited size of North American FTOs and that producer organizations report underutilized capacity as evidence that supply from fair trade producers outweighs demand.
 
While both theories have merits, as different labels within and outside of the fair trade sphere compete there is a fear that concessions will be offered to entice companies to support fair trade over other systems. Some of the distinct features of the fair trade model, such as long-term investment, capacity building, empowerment, and transparency, may also be sacrificed to this effort to recruit conventional companies.

Fair trade futures

To bring together different opinions and create ways forward, the Fair Trade Futures conference is scheduled to bring together entrepreneurs, producers, students, and activists from five continents on Sept. 10–12, 2010. Debates will explore the balance between values and volume, whether certification is compatible with fair trade, and what the future holds. Workshops will explore the lessons of the organic and the union movements, how to bring more fair trade to consumers, and the practical elements of running a fair trade business. Conference participants will return to their communities reenergized and ready to create a new world through fair trade.
 
Through these and other activities, fair trade seeks to change lives by capitalizing on its history, educating consumers, and maintaining high standards in the face of growing challenges. ■

Learn More About Fair Trade

To learn more about how fair trade values live in the world, check out these great tools:
FairTradePrinciples.org—The Fair Trade Federation launched this site to explain the fair trade business model and inspire others to adopt trading practices that distribute power, risks, and rewards more equitably. It offers examples of Federation members’ best practices under each of their nine Principles.
FairTradeProof.org—Trace coffee from farmers to the roasters of cooperative coffees. The searchable website shows copies of contracts, invoices, and background information about the supplying producer co-ops and their communities.
Sourcing fair trade has never been easier. The Fair Trade Federation offers a searchable member directory,  and provides tailored lists of suppliers upon request. TransFair USA lists its licensees online; and, in Canada, licensees can be found at http://transfair.ca/en/transfair_locate.

See other articles from this issue: #150 September - October 2010
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