Fair Trade Controversies

by zarah

Published September 28, 2008 @ 08:00AM PT

As the concept of Fair Trade has expanded, more and more players have joined the game. With this expansion have come different viewpoints that are oftentimes conflicting. These conflicting viewpoints are part of the growing pains of Fair Trade and serve as healthy dialogue for the concept's development and strengthening toward the future.

1. Market-based vs. Movement-based Model of Fair Trade

Two distinct kinds of companies are operating within the Fair Trade movement, generally known as movement-based and market-based companies.  These distinctions are becoming more important, especially with more and more large transnational companies participating in Fair Trade. Movement-based companies are those that generally employ 100% fair trade practices such as transparency in business practices, have long-term and direct relationships with producers, and offer pre-harvest financing so the producer has money up-front to start their crop. Market-based companies tend to be less forthcoming with their business practices, purchase only a small percentage of their coffee supply under fair trade criteria, do not have long-lasting commitments to farmers, and do not offer the same pre-financing to producers. The argument for extending Fair Trade certification to market-based companies is the potential to significantly expand the use of Fair Trade, since these tend to be larger companies that purchase higher volumes of coffee, such as Starbucks and Nestle. Since most Fair Trade-certified cooperatives can only sell a portion of their crop at Fair Trade prices, expanding the Fair Trade market through high-volume companies can increase the percentage of coffee that farmers can sell at Fair Trade prices. These companies also tend to have a larger consumer base, so as more people drink Fair Trade coffee, more farmers will benefit in the end. Many activists claim that market-based companies are participating in the Fair Trade half-heartedly, with profits in mind instead of the human aspect of the Fair Trade system, and that they are not interested in Fair Trade in a social movement, but rather as a profitable niche.

Navigating the Muddy Waters of Fair Trade

http://justthings.info/files/Just_Things_1_1.pdf

Fair to the Last Drop: The Corporate Challenges to Fair Trade Coffee

http://www.foodfirst.org/node/1794

Fair Trade Certified: An Interview with Paul Rice of TransFair USA

http://www.worldchanging.com/archives/006477.html

2. Keeping the Certifiers in Check

The power of a Fair Trade label lies with the certifier, who has the ability to regulate access to the FT system, because it is the certifier that audits the supply chain and decides whether or not your product can carry the Fair Trade-certified label. However, the legitimacy of a label is at risk when a presumably independent certifier like TransFairUSA (TFUSA) seems to show preferential treatment to bigger corporations. Some allege that TFUSA has applied uneven standards to large corporations, for example lax requirements for increasing fair trade practices or hosting a promotional campaign for Starbucks coffee company, causing long time, 100% Fair Trade companies to pull out of the FTC system in protest. Because of this some have called for a system of watchdogs to keep the certifiers in check and make sure that trans-national companies don't co-opt the system to maximize yet more profits.

Bringing Fair Trade Home

http://www.familyfarmdefenders.org/pmwiki.php/Main/BringingFairTradeHome

Critics Contend Fair Trade Labeling Group, TransFair, Cozying up to Big Coffee Buyers

http://www.organicconsumers.org/articles/article_5322.cfm

Fair Trade Certification Challenges: A Collection

http://greenlagirl.com/2006/03/21/fair-trade-certification- challenges-a-collection/

3. The Plantation Question

Over the years, small banana and tea plantations with progressive labor practices have been certified Fair Trade in countries where relationships with small farmer cooperatives have been slower to develop. Recently, the International Fairtrade Labeling Organization (FLO) has been pushing to certify large agribusiness plantations which are likely to push out the smaller farmers because for example, in the case of bananas and tea, large agribusiness plantations already dominate production for export. So, allowing plantations to enter would further marginalize the small farmers the Fair Trade system was set up to benefit. Supporters of plantation certification argue that FT forces plantation owners, who are notorious for abusing their workers, to improve labor conditions. Opponents argue that the certification of large plantations could threaten the livelihood of small farmers who produce the same crops and pits exploited workers against impoverished farmers, therefore cutting out the raison d'être of the Fair Trade movement - benefitting the small farmers - for the sake of big business.

Fair Trade as a Tool for Transformation: Can plantations play that role?

http://eecampaign.wordpress.com/2008/07/28/143/

Farmer Co-ops vs. Plantations: An Update on Fair Trade Coffee

http://www.cooperativegrocer.coop/articles/index.php? id=481

4. Balance of Power Between North and South [or Producers and Consumers]

Concerns about the balance of power between Northern and Southern participants in Fair Trade - respectively, the consumers and producers - continue to affect the policies and standards of Fair Trade. Only a minority of producer representatives present at FLO's board and committee meetings are allowed to vote, so although all decisions made by FLO directly affect small farmers and their livelihoods, these small farmers have a limited voice in determining those policies. Although activists within the system are working hard to strengthen the participation of producers, the legacy of colonialism - which help to create the imbalanced system that FT is trying to combat -- is in many ways formalized in the governing structure of the certifiers.

The Fair Trade Movement: A Closer Look

http://us.oneworld.net/node/123086

Letter to the Fair Trade Movement

http://activistnotes.wordpress.com/2008/04/22/letter-to- the-fair-trade-movement/