Flare Up in the Fair Trade World

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in: Agriculture

For consumers who want to fuse their purchasing decisions with their social consciousness, buying green and righteous just got a whole lot more confusing. There’s a skirmish going on within the fair trade community, between the good guys and, well, the good guys. When every organization involved in the controversy has a word like “fair” or “equal” in their mission statements, you know you have a problem.

Fair trade certification was born out of the concept that there is a route out of rural poverty that doesn’t require aid from donors, just better access to the marketplace by paying farmers directly and avoiding the middleman. For decades, the fair trade designation has been granted to individual rural farmers and small farmers’ co-ops that grow commodity goods such as coffee, tea, sugar, chocolate, bananas and spices and provide direct access to the marketplace. Larger estates and plantations could not be certified as fair trade, a core principle that is now beginning to change. On Jan. 1, Fair Trade USA, the largest independent certifying organization in the U.S. — with an annual reach of more than 30 million consumers — announced that it was leaving FLO-CERT, the leading international fair trade organization, and would certify products grown on plantations and estates in addition to small farmers farming co-ops.

It’s a mess in the making. Twenty-plus Fair Trade USA members resigned. Petitions were flying back and forth over the blogosphere, representatives of the Latin American and Caribbean Network of Small Fair Trade Producers (CLAC) wrote protest letters, international nonprofit membership rosters are still rattling, and globally responsible corporations such as Green Mountain Coffee Roasters, Equal Exchange coffee, Starbucks, Dunkin’ Donuts and Honest T all felt compelled to take sides.

Organic cacao grower Eusebio Laron Torres

Organic cacao grower Eusebio Laron Torres belongs to an agrarian coffee cooperative in Peru. Credit: Courtesy of Equal Exchange

A rare good-guy CEO-to-CEO fight made it out into the public sphere with a full-color, full-page advertisement in the May 20 edition of the Burlington (Vt.) Free Press.  The ad was signed by Bob Everts and Rink Dickinson, co-presidents of the Massachusetts-based Equal Exchange coffee company, and written to Larry Blanford (“& Friends”), CEO of Green Mountain Coffee Roasters, based in nearby Waterbury, Vt., urging Blanford  (“& Friends”) to leave the American-based nonprofit Fair Trade USA and rejoin the international organization, FLO-CERT. “We ask you to open your eyes to the controversy raging around you,” the public letter concluded. Rodney North, spokesperson for Equal Exchange, explained the objective behind the open letter: “We’re not actually asking GMCR to do anything new. Rather we’re urging them to return to the international fair trade system that they had always been a part of until their certifier, FT USA, left it so as to unilaterally make up a new set of rules.”  In 1986, Equal Exchange introduced the first fair trade coffee to American supermarkets and coffee shops. Today, the company is an employee-owned corporation that works with 40 small farmer cooperatives in 25 countries.

Understandably, Fair Trade USA founder and President Paul Rice has a different perspective. He characterizes the current back and forth not as a fissure in the fair trade community but as a “healthy” and necessary consequence of growth, in the tradition of the growth pains for the organic movement 10 years ago. “If fair trade stays small, its impact stays small. If we expand and adapt fair trade principles and take them mainstream to the Starbucks, the Trader Joe’s, Whole Foods, Costco, Dunkin’s — we can have a bigger impact and raise more people out of poverty.” Rice estimates that 2 billion people worldwide live in poverty, and fair trade is only affecting 10 million farmers. “It’s too tiny a fraction.”  The pressure to expand and adapt the fair trade certification, Rice says, came from rural farmers, from NGOs and from his hundreds of farmers and trading partners worldwide. Rice founded his nonprofit 14 years ago after 11 years of working and living in rural Nicaragua. What began as a “scrappy little nonprofit with a total team of one” now has 800 partners, and the fair trade certification label is recognized by 34% of Americans consumers. “But that’s not enough.”

A certified fair trade product typically sells at a premium to the consumer, a differential hopefully netting a living wage for the farmer. U.S. sales of fair trade products topped $1.5 billion last year, which yielded a $250 million premium to the farmers. Coffee beans are one of the most successful fair trade crops, with mega giants like Starbucks regularly featuring a fair trade bean option. And yet only 5% of the coffee market in the U.S. is for fair trade coffee.

Fair trade began as a social justice movement in the 1940s and has become a player in the global commodities market. The fair trade movement is a large and very international coalition. As an example, FLO-CERT, the leading international fair trade certifying body, represents 70 countries and has its headquarters in Germany with offices in India, Costa Rica and South Africa. FLO-CERT employs 100 fully   trained auditors in 50 countries. When Fair Trade USA resigned its membership in FLO-CERT, the resignation created shockwaves, Rodney North of Equal Exchange says. “FT USA sold out. One small peasant is a farmer. One thousand small farmers is an institution.” So far, Green Mountain Coffee Roasters has yet to respond to the open letter to its CEO asking him to withdraw his company from FT USA. Whole Foods, Starbucks and Coke’s Honest Tea brand have all reaffirmed their support of FT USA.

Fair Trade USA has just unveiled a new black and green logo to be displayed on the more than 100,000 food and personal-care products and ingredients it certifies in the United States. The takeaway to the socially conscious consumer? Stay tuned. It’s never easy being green. So many shades of gray get in the way.

Top photo: Organic cacao grower Julia Najarro la Rosa in a coffee cooperative in Peru. Credit: Courtesy of Equal Exchange


Zester Daily contributor Louisa Kasdon is a Boston-based food writer, former restaurant owner and  the founder and CEO of Let's Talk About Food, an organization that engages the public around food issues in our world. Kasdon was the food editor for Stuff magazine and the contributing editor for food for the Boston Phoenix.  Winner of the MFK Fisher Award for Culinary Excellence, she has  written for Fortune, MORE, Cooking Light, The Boston Globe, Boston Magazine and The Christian Science Monitor, among others.

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Ryan Zinn
on: 6/29/12
Hi Louisa, Thanks for weighing in on this complex issue. First, a few clarifications: 1) The Institute for Agriculture and Trade Policy founded what was then TransFair USA (now FTUSA) in 1997. 2) FTUSA split from Fairtrade International, also known as FLO, not FLO-CERT. FLO sets fair trade standards and provides support to producers in the FLO fair trade system. FLO-CERT is a separate organization which inspects and certifies producer organizations to FLO standards. Clearly, fair trade as a movement and market is going through a significant and necessary evolution, not to mention a rough patch of growing pains. The ethical marketplace is now overrun with numerous ethical seals and standards, with varying degrees of impact and accountability. FTUSA's split from FLO is but one more level of confusion for consumers looking to differentiate product seals in an era of increasing "greenwashing" and "fair washing." While the fair trade community agrees that we must expand the benefits of the fair trade marketplace to more farmers and workers, there is very little consensus on how this can be done. Transparency and accountability are core fair trade principles. FTUSA's actions have violated these principles, thus igniting the movement wide uproar we are seeing today. To be clear, this battle for the future of fair trade cannot be limited to Equal Exchange vs. FTUSA. Both have played key, but distinct, roles in fair trade over the years. Equal Exchange has been one of the more vocal of the many organizations, traders and others that have demonstrated their displeasure with FTUSA's recent actions. In fact, dozens of organizations and hundreds of individuals have recently signed an open letter to FTUSA's Paul Rice (http://fairworldproject.org/news/single/523), voicing serious concerns regarding FTUSA's direction and process. When FTUSA split from FLO last year, the move was met with virtually universal condemnation by numerous organizations and networks, including the World Fair Trade Organization (http://fairworldproject.org/news/single/403), the three primary fair trade producer networks from Latin America, Asia and Afraica (http://fairworldproject.org/news/single/399), United Students for Fair Trade (http://fairworldproject.org/news/single/407) and our organization, the Organic Consumers Association's Fair World Project (http://fairworldproject.org/news/single/400). While no organization is perfect, and FLO has certainly made a number of missteps in the past, process and governance are important. FLO's efforts to address the hired labor sector in the fair trade market are encouraging (http://ow.ly/bVcSF). FLO has improved its governance and ownership, with producer organizations accounting for 50% ownership and board membership. Sincerely, Ryan Zinn Campaign Director Fair World Project www.fairworldproject.org

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