Fair Trade USA muddies the waters

by JulieCraves on September 19, 2011

When it comes to the world of Fair Trade (FT), Coffee & Conservation tries to stick to providing basic information to consumers on what the certification means, the specific environmental standards in FT certification, and major news. A recent announcement qualifies as major news that changes the meaning of “Fair Trade” certification in the U.S., and which may mean changes to environmental standards for coffee certified as FT by Fair Trade USA.


Fairtrade International (FLO) is the organization that coordinates labeling initiatives around the globe. FLO develops the FT standards for all FT-certified products, including coffee. Member organizations in other countries use the standards to license and promote FT-certified products. In the United States, the member organization is Fair Trade USA (formerly TransFair USA).

One of the strengths of FT certification was that FLO provided global standards for FT-certified products (coffee being just one of many). Whether or not you agreed that the standards were the right ones to achieve the stated goals, at least you knew that FT-certified products all conformed to the same standards — everyone was on the same page. Even if many consumers don’t have a full understanding of the purpose and means of FT, this single system, applied consistently, has built their trust in the certification.

Break up

Last week, Fair Trade USA (FTUSA) announced it is resigning its membership in the FLO system effective December 31, 2011. The main departure point is that FT certification for coffee has been restricted to cooperatives; for other agricultural products such as bananas or tea, larger estates and other producer models have been able to get FT certification. FTUSA wants to expand the availability of FT certification, starting with coffee.

FTUSA noted that it may revise some of the standards currently being used for FT-certified products. The language in FLO’s response was much clearer:

“Fair Trade USA has announced a new initiative under the banner Fair Trade For All.’ We wish to clarify that the proposals it contains regarding major changes on coffee certification are the views of Fair Trade USA alone, and do not constitute a change to the policy or standards of Fairtrade International (FLO).”

Therefore, FLO has stated as of January 1, 2012, they (FLO) will “no longer be able to accept FTUSA’s certification for sales into other Fairtrade markets under the global Certification Mark.” FTUSA will continue to recognize producer organizations who hold FT certification from FLO.  Eventually, then, a product in the U.S. may have FTUSA’s seal, the FLO seal, or both. Consequently, consumers will have to figure out what the standards are for the certifications.

The FLO global certification mark (seal).

Recap of current standards

At least initially, it appears that the major changes will have to do with who qualifies for FT certification. How or if this will effect the environmental standards is not known at this time. Update: Please see the Quick Guide to Coffee Certifications for graphs that  illustrate that FLO has more criteria or requirements related to the environment and biodiversity than FT USA.

FT environmental standards developed by FLO, as I outlined in a previous post, are fairly generic. They cover ( with a very broad brush) pest management;  general soil, water, and waste management; GMO policy; energy use; and very broadly and non-specifically, biodiversity protection.

New FLO standards were rolled out in early 2011, but not much has changed.  The revised generic environmental standards for all small producers (which apply to coffee), while re-worded, expanded, and providing more detailed guidance, did not substantially strengthen biodiversity protection from previous versions. FLO said this upon the revision:

Revised environmental requirements: Putting people first

The revised environmental requirements in the New Standards Framework keep people at the heart of the Fairtrade system. Strong core criteria protect producers’ health and safety, conserve nature and ban the use of GMOs and dangerous chemicals. Then, through the benefits received through Fairtrade, producers are encouraged to work on development priorities of their choice which lead to even greater sustainability.”

The Fair Trade USA seal.

As before, the standards specific to coffee do not have any additional environmental criteria (e.g., any sort of shade tree, density, species, or pruning requirements).

Here are the links to official statement by FLO and FTUSA. As the coffee industry responds, I’ll add links to especially relevant content.

Updated news links:

Additional links:

Revised on January 7, 2022

Posted in Fair and Direct Trade

Bwana Shamba September 20, 2011 at 9:17 am

Thanks for the update, it is really great that you keep us updated with what is happening in the sustainable coffee world, for farmers like us this helps in seeing where the direction in this whole issue is going. I have a challange with this fairtrade issue, it was always thought that the price and premium were meant to get the farmer the best price and am sure those drinking our coffee as fairtrade feel the same as they drink the coffee.
A few months ago FLO made a release on the challange there was fulfilling contracts, ironically because the farmers had a higher market than they had contracted with their fairtrade buyers. I say Ironically because the message is that fairtrade gives the farmers the fairest share of the pie, http://www.fairtrade.net/single_view1.0.html?&cHash=4a8942a3af&tx_ttnews%5Btt_news%5D=220 .
What this means is that some of the sellers of fairer coffee are not able to give the fairest price to the farmer . Thus lossing out to other and also being allowed to substitute this for non fairtrade coffee and sell it as fairtrade i.e. some that they have paid a less fair price for. As I farmer I thought the reason we go through the preparation and making our product and production methods better is to get the best price.
We should realise at the end of the day the best business for the farmer is one that helps him optimise his yeilds and get a decent income from it while conserving the same great earth that enables him continue with this trade, it seems fairer coffee does not help much with this.
I paraphrase the part on product substitution:
As part of a mediation process introduced in the Fairtrade Coffee Action Plan, traders that suffered a default on a coffee contract can qualify for product substitution, a special exemption to help traders and cooperatives clear up contract difficulties and stay in the Fairtrade system.

Product substitution means a trader is allowed to purchase coffee from an alternative source and sell it as Fairtrade. Within 12 months of that purchase, the trader must purchase an equal amount of Fairtrade coffee and sell it as non-Fairtrade coffee. This helps ensure that the Fairtrade benefits continue to reach producers. It also helps cooperatives clear up contract problems. If a cooperative representing local interests goes out of business, individual farmers could be left to fend for themselves.

Product substitution is a temporary adjustment only available to traders who enter the mediation service offered by Fairtrade International for contracts signed before 31 March 2011. Fairtrade will work with traders and cooperatives on a case-by-case basis to reach a mutually beneficial solution and closely monitor all transactions. Currently the substituted volume of coffee accounts for less than 0.5 percent of annual Fairtrade coffee imports.

Thank you and all the best with the course.
Bwana Shamba

Comments on this entry are closed.

Previous post:

Next post: