Discontent with certifications

In my post about the Coffee Conference, I noted that one of the most interesting things I came away with was the general displeasure many participants had with coffee certifications. Both Rainforest Alliance and TransFair USA (the Fair Trade certifiying organization in the US) had representatives at the conference. RA’s Bethany Koch (Client Relations Manager) and TransFair’s Kim Moore (Director of Business Development, Coffee and Beverages) both gave presentations that provided current statistics on the amount of coffee certified by each agency, and their various partners.

Participants had several bones of contention.

• Conflict between the mission of the organizations and their corporate partners. Specifically mentioned were RA’s partnership with Chiquita bananas and Kraft, and both organizations with Walmart. These companies have had very checkered pasts (or presents) and their histories and behavior struck people as highly at odds with the principles behind these certifications. Several people were strident about the hypocrisy of purporting to help small farmers considering Chiquita’s role in destroying the Caribbean banana farming industry. I thought one questioner’s hair was going to catch fire. Likewise, Walmart has faced a lot of criticism about unfair treatment of it’s own workers. Moore’s response regarding Walmart was that Fair Trade is concerned with the producers, not the retailers. Further, he said that all big companies had some dark holes in their pasts, and in essence that TransFair/Fair Trade wanted to look forward and not back. Likewise, people were disturbed by the fact that large roasters such as Kraft can use only 30% Rainforest Alliance certified beans and still put the RA seal on the bag (albeit with a disclaimer). Koch replied with the answer that I have received before from RA. First, that there isn’t enough supply to satisfy the huge demand of  large roasters. However, minutes prior she showed a graph indicating supply was larger than demand, a gap RA strove to maintain so that there would always be enough certified beans. I can only surmise that there isn’t enough supply that matches Kraft’s “flavor” profile. And second, although the volume of certified beans purchased by Kraft (20,000 metric tons in 2007) is a small fraction of their total purchases, RA believes that this makes a huge difference on the ground, and that changing the way a large and influential coffee company does business is a big step in the right direction. This “30% rule” is worthy of a post all of its own. Suffice to say that overall, people did not seem satisfied with these responses.
• Fair Trade prices are too low. The Fair Trade floor price was recently raised to a modest $1.25/lb (there is also a $0.10 social premium that does not necessarily go to the farmer), only $0.11 higher than when it was established in 1988. Producers at the conference noted several times that it was not adequate to compensate for the rising cost of production. This same conclusion was drawn by Daniel Jaffee in his excellent book Brewing Justice: Fair Trade Coffee, Sustainability, and Survival.
• Exclusionary policies of Fair Trade. Fair Trade certification is only available to cooperatives, not to individual small farmers or larger plantations (and therefore does not protect temporary workers at these locations). Further, Moore revealed that even many cooperatives do not qualify for Fair Trade certification. A representative of the PEARL project questioned the wisdom of small cooperatives in Rwanda participating in Fair Trade since the cost of the certification itself was a large percentage of revenues for these producers which still had low outputs. Moore’s answer was direct and honest, but made more than a few people squirm. He noted that co-ops needed to be commercially viable entities in order to qualify for certification. He said that Fair Trade is not a beginning intervention point and “Fair Trade is not for the very most in-need farmers.”

Geoff Watts pointed out that Fair Trade uses promotional language that “glorifies” cooperatives and implies that private sector efforts are evil. I’ll add that this applies to other certifications, which often urge buyers to only buy certified coffee (whatever seal is being promoted) as the only ethical choice. Watts said this leads consumers who want to do the right thing away from choices that might do the most good (e.g., Direct Trade initiatives). Indeed, in private conversations I had with some of the small retail roasters in attendance, all told me that they have had customers in their shops who demand coffee with a Fair Trade seal and didn’t even want to hear about directly-sourced coffees from farms that had been paid more than the Fair Trade price. As Jaffee asks in his book,

“What good will it do to have Nestlé displaying the fair-trade seal on a tiny portion of its coffee if the company ultimately succeeds in confusing consumers and undermining their confidence in the integrity of fair trade overall”?

As evidenced by opinions expressed at this conference, the integrity of these seals has already been diluted or compromised. Their success depends not only on the support of consumers, but also roasters and retailers. TransFair and Rainforest Alliance need to examine adopting some sort of tiered certification system that differentiates between products that are truly 100% certified, and those that are part of a limited effort. Brands which use only small portions of certified beans should be required to increase by a set percent over a specified time period, and all these actions should be transparent to the public.

Further, I believe that large corporations (the big roasters) should bear the burden of the costs of certifying the producers. These costs — initially $2000 to $4000 plus regular inspections — prevent many producers from ever getting certified in the first place, locking them out of these markets. The multinationals can well afford to cover these expenses. This will also have the added benefit of acting as an investment by these corporations in their suppliers, providing, one hopes, some long-term stability. I’d also like to see some sort of additional fee paid by these large companies, for as long as their certified supply remains under a particular level, that would help subsidize the fees of other farmers.

Socially and environmentally responsible seals have worthy standards and great missions, but their success depends on goodwill and trust. What I found intriguing was that this was a left-leaning crowd, the type that typically supports, and even helped found, these certification movements. It’s a shame to see this trust eroding.

Posted in Certifications