New Internationalist

Is it curtains for Fair Trade?


Driving force: Paul Rice, CEO of FTUSA. Photo: Global X, reproduced under a CC license.

An excellent article by Scott Sherman in The Nation describes in gory detail a ‘brawl’ over fairly traded coffee in the US.

It’s the kind of thing that’s common enough when passions run high – as indeed they must do with fair trade – but this one completes a long cycle that could see fair trade disappear altogether as a significant force for radical change.

In May 2012 Fair Trade USA (FTUSA), the major certification agency in the US, ended its affiliation with Fairtrade International, based in Bonn, Germany, which sets international standards.

FTUSA wants to accredit small ‘independent’ coffee farmers and plantations, which in reality means opening the door to major corporate interests, with sponsorship by the likes of Walmart. Fairtrade International, however, is sticking to its founding principles and accredits only coffee produced by farmers’ co-operatives.

Coffee remains the emblematic fair trade product, so what happens to coffee is likely to happen to fair trade generally. In some respects it is happening already. In 2005 the Fairtrade Foundation – the equivalent of FTUSA in Britain – put its ‘fairtrade’ label on flowers produced in Kenya for the huge corporate retailer Tesco. By 2009 the label had also been stuck to the corporate food manufacturers Nestlé and Cadbury (now Kraft).

So the principle of corporate involvement has now been established at every stage of international fair trade, from production through manufacturing to retailing – a corporate strategy better known as ‘vertical integration’.

The driving force behind FTUSA’s move appears to be President and CEO Paul Rice. He is a veteran of the revolution in Nicaragua and aggressively unrepentant.

Mass-market coffee blends – sold mostly freeze-dried or roast-and-ground – are created by ‘roastmasters’. These people are, Rice claims, ‘masters of their universe’. They merge or blend the beans’ great natural variety – from place to place and year to year – to produce a consistently uniform taste or ‘experience’. This is what the profitable mass marketing of corporate ‘brands’ demands.

A roastmaster, Rice believes, is never going to be told how to perform his alchemy by ‘some NGO dude who tells him to rejigger his business and re-engineer his blends’. But if his existing corporate plantation suppliers adopt the ‘fairtrade’ label, the volume of fair trade coffee will, according to Rice, expand exponentially to become ‘democratic’ and ‘fair trade for all’.

Leave aside, if you must, the sheer perversity of turning a natural diversity of flavour into a consistently uniform nothingness. Equal Exchange – at the heart of the fair trade movement in the US – and Fairtrade International see their priority as expanding the relatively small proportion of the harvest of their co-operative suppliers that is as yet fairly traded.

Paul Rice claims: ‘Everyone is innovating. Look at Apple… It baffles me that somehow innovation in our movement is unacceptable.’

The question remains: is the principle purpose of fair trade to change world trade; or will world trade change the principles of fair trade?

You might suspect that these principles reflect an exaggerated distaste of everything corporate. True, it was the consequences of corporate control that gave birth to the fair trade movement. True, the ideologues of Nestlé once – and not that long ago – went out of their way to rubbish the very idea of fair trade for offending against the sacred principles of ‘free’ trade. True, there are as yet few signs of the corporate mind, at the World Trade Organization or anywhere else, relinquishing its fundamentalist ‘free’ trade faith.

But to imagine that by adding an insignificant fair-trade ‘niche’ to their capacious portfolios corporations are showing a significant sign of profound change would be fanciful at best. The record suggests that potential threats are embraced only in order to throttle them.

Paradoxically, the growth now cultivated by the likes of FTUSA breeds its very own corporate terminator seeds. The most serious corporate error is to allow your ‘brand’ to be ‘diluted’ or confused. Ferocious machinery in the form of trade-marking, patents and ‘intellectual property’ is installed to prevent this disaster from being perpetrated by trespassers.

You can, however, do it yourself. Losing an argument and making off with the FTUSA label undermines its legitimacy, confuses perceptions and encourages others to follow suit. ‘Dilution’ is scarcely sufficient to describe the likely result. Meanwhile, beleaguered ‘ethical shoppers’ must somehow choose between boycotting Nestlé because of its abuse of baby milk sales or supporting one of its freshly fairtrade-labelled products.

To my mind, fair trade is part of a wider movement for global justice or it is nothing. It is, in essence, a movement of people and ideas, not labels and brands. That movement now faces its most severe test in a radically altering world where corporate (including financial) power is still out to exercise its baleful, secretive influence.

The choice for fair trade is, I think, less between corporate globalization and global justice than between global justice and ceasing to exist at all.

Related blog:  A funny thing happened on the way to (fairtrade) market by Paul Deighton, Fair Trade specialist and merchandise manager at New Internationalist Australia.

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  1. #1 Lisa 12 Sep 12

    I know that Paul Rice is leading the fair trade movement in the US down the drain. He needs to retire or resign or just stay at home.Great Britain's Fairtrade Foundation, which is the equivalent of FTUSA, does a MUCH better job and is run by a woman named Harriet Lamb. Great article.

  2. #2 Rodney North, Equal Exchange, USA 12 Sep 12

    Ransom,
    Thank you for paying attention to this important issue. While we at Equal Exchange (USA) share your disapproval of Fair Trade USA's actions we probably have a more optimistic analysis of what the current controversy means for the Fair Trade movement overall. We don’t think it has to mean “curtains for Fair Trade” by a long shot.

    Here’s why:
    One impetus for what is happening is that corporations are taking a greater interest in Fair Trade. Overall that’s a good thing (a point well made repeatedly by Michael Sheridan at http://www.coffeelands.crs.org/ )

    If & when large corporations convert portions of their supply chains to Fair Trade supply chains that’s progress – AT LEAST when it’s done in line with Fair Trade’s historic focus on small-farmer co-operatives.

    The problem comes when the certifiers change “Fair Trade” away from that focus and grant Fair Trade certification to plantations – where a Fair Trade sale is making much less, if any, change in the social, economic or political order. And that is at the heart of the current dust-up around Fair Trade USA.

    Like so maybe changes in society there will be efforts to divert the course of that change. So in this sense maybe these current tensions are just a growing pain for the Fair Trade movement

    More reasons why one shouldn’t despair:

    *The very strong public response to the current controversy remains us how much people care.

    *This debate has caused thousands (especially within food companies, the food retailing sector, social justice community, and the media) to actually stop and think about what “Fair Trade” is. For too long too many just looked “for the sticker” without really understanding what Fair Trade was, is, or could be. Now they’re learning – another good thing.

    * Fair Trade International (the system that oversees most Fair Trade certification outside the U.S., www.fairtrade.net) is setting up shop to serve U.S. companies. So there is now serious competition for Fair Trade USA.

    * We and others are offering tools so that people can speak up for authentic Fair Trade.
    For ex. the Fair World Project has this petition to Starbucks and Green Mountain Coffee (the world’s #1 and #2 buyers of Fair Trade coffee http://tinyurl.com/859ula7

    Equal Exchange is collecting signatures of those who support the original vision of Fair Trade, one focused on small-farmer co-ops. Already 500+ businesses, congregations and other organizations have signed on + another 7,500 individuals
    http://www.equalexchange.coop/fair-trade-campaign

    And we’ve created this resource page where people can get better informed on the issue.
    http://www.equalexchange.coop/small-farmer-campaign

    As for Paul Rice’s statement: ‘Everyone is innovating. Look at Apple... It baffles me that somehow innovation in our movement is unacceptable’. This is a straw man argument.
    Many in the Fair Trade movement have been innovating and continue to innovate. For example at Equal Exchange we’ve bucked the trend and created a new Fair Trade product line where all our black tea, & rooibos, is now sourced from small-scale farmer co-ops. That stands in contrast to the more common dependence on sourcing Fair Trade tea from plantations. That’s the kind of innovation the movement needs.

  3. #3 James Solkin 12 Sep 12

    There is no doubt that the Fair Trade Labelling and Certification train has run off the rails, not to mention shot itself in the foot, flown too close to the sun, whatever...and that this Paul Rice FTUSA Fair Trade for All Uproar represents its swansong, full of sound and fury and...well, you know the rest...
    Now that that's behind us, the time has finally come to turn the whole thing on its head and put the ownership and governance of fair trade in the hands of its true owners and founders, small producers themselves. And it is already happening: from this mess has risen the first producer-owned and operated 'fair trade' system in the world, el Símbolo de Pequeños Productores (The Small Producers' Symbol). We and many others, in alliance with over 300 small-producer cooperatives representing nearly one million people are working together to build this new, true link between consumers and producers, based on mutual respect and common sense. This is the 'Get Up, Stand Up' moment for the voice of the South in the Fair Trade movement, and it's a cause for celebration. If the movement has a future, this is it.

    For more information you may visit:
    http://www.bruleriesantropol.com/en/our-mission/fair-trade/the-symbol/
    and
    http://www.spp.coop/

    James Solkin
    Santropol Coffee Roasters
    Montreal, Quebec
    Canada

  4. #7 Angie 18 Sep 12

    Thank you for the informative article. Can the author suggest an action we can take to support the continued 'fairness' of fair trade?

  5. #8 Jackie DeCarlo 19 Sep 12

    David,

    Thanks for your take on this latest controversy. While I think you have analyzed some of the events correctly, I agree with Rodney of Equal Exchange that there are many reasons to continue to be optimistic. I wouldn't, like James, turn the whole movement on its head. In fact, the kind of either/or thinking in your article fuels discontent. It doesn't come up with solutions.

    As Rodney notes, Catholic Relief Services knows from our coffeelands work on three continents that a variety of approaches, including engagement with corporate actors, often serves the poor. We definitely know there is no one way to ’contribute to sustainable development’ (an aim of the movement per the World Fair Trade Organization).

    Here in the States we partner with companies fully committed to fair trade crafts, coffee and chocolate because their business models match CRS principles and deliver real results to communities of both producers and consumers. We are proud that pioneering partners, such as Equal Exchange, SERRV, and Divine Chocolate, have demonstrated to corporations that the fair trade model is of interest to consumers and creates shared value with farmers.

    Progress often comes through disruptive change, and it also can through a humble search for the common good. We don't have to declare a right way or a wrong way. Fair traders, with their focus on partnership and dialogue, are being called to find a middle way forward.

    Jackie DeCarlo
    Catholic Relief Services Fair Trade

  6. #9 David Ransom author of blog 20 Sep 12

    Fair trade is still very much alive and kicking!

    My own view remains that it's better to buy fair trade than not in almost any circumstances, except maybe Nestle.

    But that still begs questions about the direction of fair trade. If the movement as a whole stays true to its principles and the people who want to support them, then I'm confident it will win through.

    For those of us at the 'northern' end, the priority surely is to apply the same principles to manufacturing and retailing, so we don't have to turn to corporate interests to boost the volume of fair trade and thereby throw in the towel.

    To my mind that means engagement with broader movements like Transition Towns and the flowering of local, innovative economic initiatives that is an offshoot of pure necessity from the Age of Austerity. Solidarity with your local community seems to me to be of a piece with international solidarity.

    The big problem here is that fair trade products cost more. In theory, fair trade should be able to transfer to both producers and consumers the massive surpluses that currently find their way into bulging corporate coffers.

    Taking the 'premium' for producers from a 'premium' for consumers (much of which the corporates seem free to pocket themselves if they wish) leaves the old structures intact and restricts the reach of fair trade.

    It's a big ask, I know, and not susceptible to the quick corporate fix. But, in the Age of Austerity, it is surely the best way to make trade fair for both producers and consumers - and that includes just about all of us.

    David Ransom

  7. #11 John Smith 03 Jan 13

    I found this article whilst looking for other information however I agree with the author that 'Fair Trade' looks like its being diluted as an independent organisation with good morals and values.

    Like anything thats new, if its sexy and compatible to a corporate image, you will start to see its morals chipped away.

    Legal wrangling will always find a way in favour with the big guys i.e. the corporates just like it has done over the last century.

  8. #12 Fabian Merchant 05 May 13

    ’ ... in a radically altering world where corporate (including financial) power is still out to exercise its baleful, secretive influence.’

    You conveniently left out Big Gov´s Power together with it´s financial and corporative cronies? Or was that just an honest mistake? ;-)

  9. #14 NMD 14 Apr 14

    There has to be a middle way - to grow Fair Trade it needs the big companies to join in - they should though have to play by the rules or you are right it becomes pointless.

    We have a dilemma as a small company - we want to become 100% Fair Trade but the sales just don't add up.

    See: http://www.vitoroad.com/collections/fair-trade-scarves

    Is it better for the Fair Trade products to be part of a larger range and attempt to recreate the Non Fair Trade products or do you have to be 100% Fair Trade or nothing?

    It is a dilemma which we are struggling with to be honest.

    NMD

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About the author

David Ransom a New Internationalist contributor

David Ransom joined New Internationalist in 1989 and wrote on a range of issues, from green justice to the current financial crisis, before retiring in 2009. He was a close friend of Blair Peach, once worked as a banker in Uruguay and continued to contribute to New Internationalist as a freelancer until shortly before his death in February 2016. He lived on a barge on the waterways of England’s West Country.

His publications include License to Kill on the death of Blair Peach in 1979 and The No Nonsense Guide to Fair Trade. He also co-edited, with Vanessa Baird, People First Economics.

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