To the Teacher:
In an increasing number of grocery stores and coffee shops, you can now find food marked with a "Fair Trade" label. The Fair Trade food movement first emerged in the United Kingdom as an effort to pay producers in the Global South fair prices for their products and to increase demand for their goods in wealthier countries. Established in 1988, the Fair Trade label has rapidly expanded its reach. In 2013 Fair Trade sales reached $2.4 billion in the UK alone and sales are expanding quickly in the United States as well. However, as Fair Trade gains popularity, skeptics question whether the movement is doing enough to end the exploitation of farm workers.
This lesson reviews the origins of the Fair Trade food movement, its aims, and its potential limitations. The lesson consists of two student readings. The first reading explains the goals of Fair Trade certification, most centrally the desire to improve the lives of farmers in the developing world. The second reading examines some of the criticisms made against the movement and invites students to debate their validity. Questions for student discussion follow each reading.
Student Reading 1
The Ideals of the Fair Trade Food Movement
The Fair Trade food movement first emerged in the United Kingdom as an effort to pay producers (that is, farmers and farm workers) in developing countries fair prices for their products and to increase demand for their goods in wealthier countries. Established in 1988, the Fair Trade label has rapidly expanded its reach. In 2013 Fair Trade grew to $2.4 billion in the UK alone, and sales are growing quickly in the United States as well. Currently, its two most popular items are chocolate and coffee.
Supermarkets in the U.S. and Europe today sell food imported from all over the world. While consumers benefit from the affordability of inexpensive imports, many are becoming aware that the exploitation of farm workers abroad is one factor that enables low prices. The "Fair Trade" label is one effort to create a more just relationship between farmers in the "Global South" (developing nations in regions including Latin America and Africa) and consumers in advanced industrial nations.
In a March 28, 2013 article, Bloomberg.com sustainability editor Eric Roston reported on the working conditions experienced by the people who make one popular food item: chocolate. Roston wrote:
Stop what you're doing for a second and think about chocolate...
What a delight. What a luxury.
It's also labor-intensive to cultivate, and is harvested mostly by 1.5 million cocoa farmers in Cote d'Ivoire and Ghana, the countries that grow just more than half of the world's cocoa beans. Farming there or in other producing nations, including Indonesia, Ecuador and Cameroon, has led to child trafficking, conflict-financing and all-around awful working conditions, according to a 2009 Oxfam International report. Women, who make up a disproportionate number of low-paying jobs, face lower wages than men, harassment, lack of property rights and lack of access to credit, according to an investigation from the group released in February. "Many cocoa producers have never tasted chocolate," wrote the authors of the 2009 report.
As an effort to combat such abuses and to improve conditions for farm workers in the global South, Fair Trade works to ensure that food producers are being paid a stable living wage for their labor. Traditionally, the Fair Trade movement has supported worker-owned farming cooperatives, and it has tried to provide contracts that allow farmers to avoid financial ruin in the event of a failed crop season. In wealthier countries, consumers are asked to pay more for Fair Trade products. This "premium" is used to fund programs that benefit farm workers, such as education initiatives or upgrades to farming equipment.
In an August 7, 2013 post for the Green Plus Institute for Sustainable Development, contributor Shannon Harvey writes:
Fair trade certifications are sought by producers in developing nations seeking to sell their products in the developed world for better prices. Fair trade certification hinges on the recognition that there is increasing inequality between the developed and undeveloped world (or Global North and Global South, as they are often called) and that this inequality is largely driven by market forces that ignore externalities such as the fate of workers and the environment. Fair trade certification attempts to bridge the often convoluted and abstract distance between third world producers and first world consumers by bringing them into a kind of partnership, educating workers about their rights and consumers about the impact of their spending on communities in the developing world.
The goals of the increased premiums paid for fair trade goods are to improve poor working conditions, raise wages so as to move individuals and communities out of poverty, to end the use of child labor, and limit damage to the environment. Some of this is achieved simply through the higher prices that producers receive, and through the premiums intended for community projects. Other goals are part of the contract of certification. Participating farmers, for instance, must enroll their children in school. This ensures that they are gaining an education, but also not working in the fields.
As Fair Trade food continues to increase its market share, chances are that you may start to notice the label appear on some of the food products you consume —if you haven't already.
- Do students have any questions about the reading? How might they be answered?
- According to the reading, what concerns does the Fair Trade movement seek to address?
- Do any of the food products that you consume regularly come from other countries? Under what conditions do you think these products might have been produced?
- Have you noticed the Fair Trade label on any products you might have purchased in the past, such as chocolate or coffee? Did the label make any impression on you, positive or negative?
- Knowing that the added "premium" in cost for Fair Trade products goes towards benefitting farm workers, do you think that it is worth the elevated sticker price?
Student Reading 2
Are There Problems with the Fair Trade Label?
As Fair Trade certification has become ever more popular and recognizable, some of the world's largest companies, including Starbucks, Walmart, and McDonald's, are now offering Fair Trade products. However, with the growth of the label, skeptics have also raised a variety of criticisms.
One debate surrounding the movement is how much of a product's content must be from an approved source for the product as a whole to receive the Fair Trade label. For example, in the case of a chocolate bar, the cocoa beans used to make the chocolate might be fair trade, while the butter, sugar, and other ingredients may not be. So what is the minimum percentage of ingredients that must be Fair Trade for a product to earn the label?
Many consumers may be surprised to learn that, based on the current international standard, a product made with as little as 20 percent Fair Trade ingredients may nevertheless be labeled as an ethically produced item.
Moreover, in recent years, Fair Trade USA, the most prominent Fair Trade certification organization in the U.S., drew criticism when it proposed the standard should be reduced to as little as 10 percent. As New York Times journalist William Neuman reported in a November 23, 2011 article:
[Fair Trade USA is] proposing to place its seal on products with as little as 10 percent fair trade ingredients, compared with a minimum of 20 percent required in other countries.
The group says the changes will benefit more poor farmers and farm workers around the world and make it easier for large corporations to sell fair trade products. Sales of Fair Trade goods in 2010 were $1.3 billion in the United States and $5.8 billion globally. Fair Trade USA said it hoped to double sales in the United States by 2015.
Critics accuse Fair Trade USA of watering down standards, perhaps motivated by the bigger fees to be earned from certifying a higher volume of products. Some sellers of fair trade products fear that small coffee farmers will lose market share to the big plantations and that companies will have an incentive to include only the minimum amount of fair trade ingredients in their products.
"It's a betrayal," said Rink Dickinson, president of Equal Exchange, a pioneer importer of fair trade coffee, chocolate, tea and bananas, based in Massachusetts. "They've lost their integrity."
In response to criticism, Fair Trade USA adopted a system with two labels, one for products with 20-95 percent Fair Trade-certified ingredients, and one for products made 100 percent from such ingredients.
Another criticism of the Fair Trade movement is that its original goals have become diluted as larger corporations have entered the market. These companies, critics argue, have used the Fair Trade label to associate some of their brands with a system of ethical production, despite doing little to change their overall business practices. As Washington Post reporters Simon Clark and Heather Walsh wrote on December 31, 2011, marketers of Fair Trade products now include "some of the world's biggest sellers of coffee (Nestle), lingerie (Limited Brands), chocolate (Kraft Foods' Cadbury unit) and bananas (Walmart), to name a few." Clark and Walsh continued:
New research has quantified the benefits to the bottom line: In a study released this year, researchers at MIT, Harvard University and the London School of Economics found they could boost bulk coffee sales by 10 percent just by adding a fair-trade label on the packages. Sales of goods approved by Fairtrade International, the world's largest certifier of such products, soared 27 percent in 2010, to more than $5.7 billion.
The push to increase sales of goods deemed not to have involved child labor and other practices has divided the movement, raised questions of whether going mainstream will undermine the cooperative farmers it was created to help and, most of all, strained the integrity of the certification systems that vouch for the fair-trade stamps that allow companies to charge consumers more.
"The fair-trade movement has profoundly lost its way," said Aidan McQuade, who advised Cadbury on cocoa buying as director of London-based Anti-Slavery International, a human rights organization founded in 1839. "Its focus on volume — unless they have got all their systems in place to address fundamental issues like ethical trade, child labor and child slavery — is problematic."
In an editorial published on the website of a Fair Trade enterprise in Malta called il-Hanut l-Arka (and since moved to socialjusticefirst.wordpress.com), staff member Sophie Colsell elaborated on the debate about the participation of major corporations in Fair Trade labeling, writing:
[L]arge multinationals such as Nestlé and Starbucks cover an enormous proportion of the market for, say, chocolate and coffee, and are currently mostly selling products that are not Fair Trade. The solution seems obvious: if these companies could be persuaded, cajoled or coerced to use certified Fair Trade products, surely the benefits for the producers in the South would be enormous?
On the other hand, there are many arguments against certifying large multinationals. Firstly, one could argue on principle: certifying large multinationals could be considered a betrayal of the core principles of the Fair Trade movement, which was set up to protect the rights of marginalized producers precisely in response to the unethical activity of these companies. Fair trade was set up to ensure decent living conditions at every level; it was envisaged as an alternative to corporate domination, not as a niche market to be conquered by the very corporations it was trying to undermine.
Secondly, one could argue that as soon as large companies are allowed to join the movement, the rules of the game start to change. Several motions have in the last decade been introduced by the Fairtrade Labeling Organization (FLO) to lower the standards of what constitutes Fair Trade; fortunately these have up till now failed. We can assume that such attempts to lower standards stem from corporate pressure. Another concern is the danger of 'fair-washing': a means whereby companies providing a comparatively tiny quantity of certified Fair Trade products can as a result be perceived by the public as ethical. Should a multinational with a history of human rights abuses selling a negligible amount of certified Fair Trade produce really be allowed to fair-wash its image by parading its Fair Trade certification mark? Additionally, if the same mark is assigned to both a fair-washed corporation and an independent cooperative that functions democratically, respecting human rights at every level, the value of the Fair Trade mark will be compromised. This could lead to public disillusionment compromising the entire movement.
Whether people in the U.S. and Europe choose to buy Fair Trade products or not, they can certainly educate themselves about the working conditions of those in the Global South who make the products they consume. There are many ways that individuals can push for a more just global economy in addition to the choices they make as consumers - such as supporting campaigns for a more just system of trade.
- Do students have any questions about the reading? How might they be answered?
- According to the reading, what percentage of a product's ingredients must be from an approved source for the item to be given a Fair Trade label? Do you think that this percentage is adequate? Why or why not?
- What concerns do some advocates have about large corporations entering the Fair Trade market? Do you think that major food brands can help Fair Trade by bringing the label into the mainstream, or do you believe that the involvement of large companies might harm the integrity of the movement? Explain your position.
- The article suggests that consumer decisions are only one way for people to influence the system of global trade. What are some other ways in which people might take action around these issues.
- Research assistance by Yessenia Gutierrez.