What are the limits of fair trade?

Monday 15 December 2003, by Cameron BAUGHEN

Fair Trade as an ethical consumer choice movement has grown in popularity over the last few years. Many fair trade products such as coffee and chocolate have become more easily available and common place. This increase of demand has lead to modest but real gains in the health and well being of a variety of farming communities through out the global south. Yet, this movement based on consumer trust is in danger of being seriously undermined.

Through out the developing world cases of slavery, poverty and social upheaval relate directly to the products we buy. Cocoa production, a major ingredient of chocolate, has long been linked with child slavery especially in the largest cocoa producing region of Western Africa. Sinking world prices in other commodities such as coffee and sugar have also resulted in human rights abuses and crushing poverty. Migration to cities because of the failure of these cash crops has burgeoned the urban poor in many southern countries.

Fair Trade as an international industry bases itself around the key tenants of transparency of certification and sustainable development of farmers. The Fairtrade Labeling Organization (FLO), the de facto international body for Fair Trade, sets the standards for world certification. Working with national organizations, such as Fairtrade Canada, they monitor and certify the manufacturing, pricing and trading standards.

Advertised publicly, or transparently, these standards allow consumers to know the processes used in the products they are supporting. For the producer, certification requires them to follow a list of social and environmental business practices including no child slavery, healthy working conditions and assessment of gender issues. In exchange, the certified purchasers pay a higher, stable price for the product they purchase, giving the producer a chance to live in dignity. The certification body monitors activities on the ground and records the paper trail of the internationally traded products as a guarantee to the consumer of ethical business practices.

The current certification body grew out of almost 50 years of consumer activism by various bodies such as the Menonite organization 10,000 Villages and Oxfam International. Currently there are dozens of companies in Canada importing cocoa, coffee, sugar and tea. These raw products are then combined, as with the La Siembra / Cocoa Camino company in Ottawa, to create chocolate and other goods. So far there are 9 types of products certified under FLO with proposals to add more. Beyond those 9 products the International Fair Trade Association or IFAT, started in 1989, also offers monitoring and guarantees of conduct for Fair Trade business dealing with other goods such as handcrafts.

Recently several threats to the movement have arisen which worry social justice campaigners. Dario Iezzoni, Director of Équita a fair trade company based in Oxfam Quebec, sees one of the greatest threats to the fair trade movement rising from what he sees as "quasi-fair trade labeling". For him, numerous labels created in Europe and North America that do not publicly release their trading guidelines do not constitute fair trade. In terms of transparency there is no guarantee of what business practices the consumer is supporting. Further concern arises from the trend of large multinational companies to market and repackage their products to make them appear more socially or environmentally responsible. These marketing strategies confuse the buying public and can create a heightened level of cynicism.

Even fair trade companies have been to blame for eroding consumer confidence. A few years ago the demand for Fair Trade bananas in Germany was so great that a company was found trying to sell non-certified bananas as certified produce. The resulting media attention to the incident caused the market for fair trade goods in Germany to decline considerably. A real concern faced by Fair Trade companies is that the majority of the Fair Trade industry depends on FLO to insure consumer confidence. If for any reason FLO collapses or similar scandals erupt, the entire industry would be damaged.

Beyond maintaining consumer confidence, limiting factors of the benefits of Fair Trade exist. Consumer studies in Europe, where Fair Trade has a longer and more prevalent history, show that in general only a maximum of 20 percent of people would be willing to pay more for Fair Trade goods. A huge majority of people would rather pay a lower price despite the negative social and environmental consequences of doing so. Partly because of these limits many activists have dismissed Fair Trade as a product for a niche market that will not lead to real social change.

Faced with these challenges, proponents of Fair Trade assert that Fair Trade remains a worthy campaign. By showing how a sustainable, successful and ethical business can be run in developing nations, Fair Trade provides working, viable business models. The real economic benefits for developing communities cause positive economic ripple effects beyond the community itself. As an education tool Fair Trade also promotes thoughtful consumerism and exposes the links between trade and poverty in the global south. Consumers also have the ability to support sustainable practices in developing nations. For Simon Ribaud, of Montreal based Ecoterre, Fair Trade may not be an end goal of itself but it does advance social and environmental justice and facilitate a greater understanding of the issues.

Within the Fair Trade movement the push now is to insure the quality of Fair Trade products both as a means of justifying higher prices and enticing non-ethical consumers who want a tasty luxury. In Canada, Fair Trade is continuing to grow briskly and Fair Trade products continue to compete successfully with cheaper goods. For Iezzoni, this movement will sustain itself so long as organizations, companies and especially consumers remain vigilant that the products they buy match a regime of social justice.


Links :

http://www.equiterre.org

Equiterre in Montreal

http://www.globalexchange.org/campaigns/fairtrade/stores/fairtrade.html

Globe Exchange US based Social Justice NGO

http://www.oxfam.qc.ca,

Oxfam quebec site and Equita, an Oxfam initiative site

http://www.lasiembra.com

Ottawa based fair trade company built by social activists

http://www.santropol.com
One of Montreal’s first fair trade coffee companies

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