Is Fair Trade Still Fair?

February 6, 2014

By Joanna Mackenzie

Recently, nine major distributors, including Mars and companies from Germany, Switzerland and Japan agreed to source cocoa, sugar and cotton from Fairtrade Certified producers.  This recent development is just one example of fair trade’s growing presence in the mainstream market.  However, as sales grow, fair trade faces the challenge of meeting higher market demands, while maintaining their commitment to small, marginalized producers and farmers who are not be able to meet the level of production required by the open market.

Before delving into the ethical implications of the expansion of fair trade, a bit of history might help. The fair trade movement began over fifty years ago with the aim of promoting social justice and poverty alleviation through more equitable trade rules for impoverished smallholder farmers and producers in developing countries. Today, a fair trade label indicates that the producers receive a minimum price at or above market value for their product and an additional premium for investment in community development.  Generally, certification also implies that the product was produced in an environmentally sustainable and ethical manner.

According to Fairtrade International, one of the largest fair trade certifying organizations, over 1.3 million farmers and producers participate in fair trade in more than 70 countries around the globe. On the consumer side, over $6.5 billion in fair trade products ranging from coffee, tea, wine, sugar and produce to flowers, clothing and body care products were sold in 125 countries worldwide from 2012-2013. What started out as a small grassroots effort to provide smallholder producers and farmers with direct market access and a fair price for their goods has grown into a multi-billion dollar industry with worldwide influence. However, despite fair trade’s social justice-driven beginnings, fair trade certification and large-scale production may be marginalizing the very same people the fair trade movement was established to empower.

First, the fair trade certification process itself is a tedious and costly process that already favors producers who already have human resources, financial viability and infrastructure, leaving the most vulnerable producers excluded from the fair trade market.  Certification requirements, such as organic certification, which is increasingly expected of fair trade producers, further increase the labor demands placed on operations and may impose on the cultural norms and values of producer communities.  For example, certifying organizations often use a top down approach, that upholds Western values and norms as the ideal, rather than incorporating local practices and knowledge into policies and programs (Terstappen et al, 2012). However, this is not the only reason why fair trade has been criticized for marginalizing small farmers.

As fair trade merges with the mainstream market, the focus of the fair trade movement has been split between meeting market demands and protecting the rights of the most marginalized farmers and producers.  In order to meet demands for higher standards and large volumes of products created by agreements with large distributors, certifying organizations, such as Fair Trade USA, have allowed plantations and larger hired labor operations to become certified.  The smaller, less sophisticated fair trade producers once again may be shut out, not only by the free trade market, but also by the very system that was created to give them market access.

This has caused moral tensions to emerge within the fair trade movement and the divergence of values is evident in actions taken by fair trade certifying organizations on both sides of the issue. On one side, lies Fair Trade USA’s “Fair Trade for All” approach, which aspires to increase the number of fair trade certified producers and products, with a focus on growing the fair trade market.  On the other side, fair trade producers in South America and the Caribbean formed their own certifying body, Coordinadora Latinoamericana y del Caribe de Comercio Justo (CLAC), which restricts certification to small producers and emphasizes sustainable production.  Expanding the fair trade market sounds like a noble idea, however, the moral issue is that fair trade certification and benefits are being extended to larger, more profitable companies at the expense of the small producers and farmers who are unable to succeed on the open market.

The fair trade movement has shown that commercial business can be used to help disadvantaged producers and farmers. Now, fair trade organizations must address the challenge of meeting market demands in a way that does not exclude those who are the most vulnerable to market forces and need fair trade to gain bargaining power and a reliable, sufficient income.  The integrity of fair trade depends on the movement’s commitment to the most vulnerable, not increasing the market share of fair trade products. If the benefits of fair trade are made accessible only to those who are able to decrease production costs to match the open market price of their products, then fair trade won’t mean much at all.

Joanna Mackenzie is a Registered Dietitian and Research Assistant for the Global Food Ethics Project at the Johns Hopkins Berman Institute of Bioethics.  She is also working towards obtaining an MSPH in Health Education and Communication from the Department of Health, Behavior and Society at Johns Hopkins Bloomberg School of Public Health. She received a B.S. in Nutrition Science from Russell Sage College in 2010.  Prior to coming to Hopkins, Joanna was a Public Health Nutritionist for the New York State Child and Adult Care Food Program. Previous work included using nutrition interventions to enhance the quality of life of HIV/AIDS populations in upstate New York.

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Global Food Ethics
Joanna Mackenzie

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