Fair and Direct Trade

Corporate coffee / Fair and Direct Trade

What’s wrong with cheap coffee, in a nutshell

The Fair Trade USA/FLO break-up and its ramifications is seeping into the mainstream media. Recently, for example, the New York Times published an article on the debate on the future of fair trade, and NPR carried a radio segment. A piece in Mother Jones magazine by Tom Philpott summed up the kerfluffle nicely, but what really resonated with me in that article was the paragraph on what sparked the genesis of the fair trade movement. It neatly summarizes (much of) exactly what is wrong with big, cheap, corporate coffee:

Huge, rich-world companies like Nestle and Folger’s (now owned by JM Smucker) dominate trade and drive prices down, reaping windfalls. Production consolidates onto huge plantations that employ workers (often, children) at poverty wages; small producers get squeezed out. And as these high-production plantations expand their monocrops to meet global demand, they gobble up high-quality farmlands that might otherwise be supporting smallholders who grow food staples for domestic consumption along with foreign-exchange-earning crops like coffee.

…and destroy biodiversity in the process, I might add.  Read more about the practices and impacts of corporate coffee here.

Fair and Direct Trade

Fair Trade USA muddies the waters

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.

Background

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:

Fair and Direct Trade

Sips: Fair Trade debate

There are so many great voices in the fair/Fair trade movement, I keep out of it aside from environmental aspects of certification and occasional links. Here are a few of those links to some posts I have found most thought-provoking lately. Fair Trade is having growing pains, and recent high market prices for coffee have added to the turmoil.

The Stanford Social Innovation Review is a publication of the Center on Philanthropy and Civil Society at Stanford University. They recently ran two pieces on Fair Trade. The first, is The Problem with Fair Trade Coffee, by Colleen Haight, an assistant professor at San Jose State University. About a third of the way down is a good illustration of the author’s interpretation of why Fair Trade coffee has a “quality problem.” Lots of history and stats in the piece, and excellent comments, as well.

They followed up with a rebuttal from Fair Trade USA head Paul Rice, Fair Trade: A Model for Sustainable Development.

Meanwhile, Small Farmers. Big Change the blog of Equal Exchange, an alternative trade organization, also put out two pieces. Fair Trade is NOT the End Goal: Part I and Part II. Part I explained the pressures on co-ops during periods of uncertain high market prices, and the choices they face when it is time to deliver on pre-negotiated contracts which will pay less than the market price. One passage struck me,

When the coffee starts coming in, the competition (in the form of multi-national businesses) is knocking at the farm gates offering farmers more money for their beans than the price the co-op has promised them.

I added the emphasis. I suppose anybody could come along and offer higher prices at the farm gate, but look who is specifically singled out* as the entity who is trying to get  farmers to break their contracts with their co-ops: corporate coffee. As the post explains, this far-reaching problems. And those multinationals won’t be at the farm gate when prices drop again.

Part II is a view of the future of Fair Trade by Santiago Paz, co-manager, CEPICAFE, a co-op in Peru.

Food for thought.

*Update: A Wall Street Journal article, “Battle brewing over coffee” published on 17 July confirmed it is the “cash flush” multinationals tempting the farmers. The first sentence reads, “Rising prices have upended the coffee trade, as multinational brokers increasingly woo farmers away from local cooperatives in the world-wide scramble for beans.” It specifically mentioned these are representatives from  NestlÁ© SA,  ED&F Man Holdings Ltd.,  and Ecom Agroindustrial Corp. Ltd. The latter two are very large organizations that include coffee divisions (ED&F Man’s is Volcafe) that buy coffee for multinational roasters. These companies say that it’s up to the farmers who to sell to.

That’s true, and I can’t really blame the farmers, who need the cash. But these multinationals won’t be providing loans and support when coffee prices drop, and if the cooperatives go under, nobody will.

Maybe these high prices wouldn’t be as tempting if we’d been paying the real cost of coffee all along, providing a price that reflects all the work that goes into growing coffee, and enough for farmers to cover their costs of production and feed their families, send their kids to school, and invest in their farms and communities.

There is no such thing as cheap coffee.

Update #2: Fairtrade International (FLO) has been holding workshops on risk management and contract negotiation for cooperative managers to help them with the problems surrounding defaults on their contracts. FLO reports that Bolivia, Peru and Indonesia were the countries hit hardest by co-op member defaults. Read more here.

Photo by Ian Murchison under a Creative Commons license.

Certifications / Fair and Direct Trade

What’s happening with Fair Trade?

Big kerfluffle, well explained in the following posts; make sure to read the comments. My thoughts on how this relates to other certifications follow.

These posts bring up a two-pronged issue that is not only at the crux of the discontent with TransFair USA/Fair Trade USA, but could apply to other certifications. It’s akin to “mission creep,” though arguably with worse consequences. It’s a veering away or dilution of the mission. First is the incorrect notion that the Fair Trade movement is about alleviating poverty, rather than creating a viable alternative market that addresses global trade systems that are unfair to small producers (and providing the resources needed to empower these producers). The Small Farmers, Big Change post has a great example regarding tea and plantation certification.

Which brings us to the second prong, and the heart of the matter, which is that the contention that TransFair USA/Fair Trade USA is more concerned with growing the “brand” than advancing the mission. Small Farmers, Big Change quotes a coffee cooperative rep from Peru:

“They are so concerned with growing the system, advancing at all costs, that they will only end with the extinction of small farmers.”

By shifting away from the small producers and trying to get as many products and players into the Fair Trade system as possible, the argument goes, the standards are being weakened. Creating a second set of modified standards to bring large (often corporate) producers into the fold allows them to “green” a small portion of their sourcing, and offer these goods at a price that can undercut that of cooperatives and smaller producers. If nothing else, this “corporatization” of Fair Trade is creating real anger and alienation, which is beginning to lead to public confusion and distrust of Fair Trade certifications in general.

This has an unsettling parallel in the eco-certification world: the rapid growth and expansion of Rainforest Alliance certified farms, forests, and products. It’s old news that many people are unhappy with Rainforest Alliance working with corporations that seem largely at odds with the spirit of the certification (you can read my post “Discontent with certifications” from more on this topic)., although it certainly hasn’t reached the revolt stage we seem to be approaching with Fair Trade. Many people are watching how the Fair Trade issue plays out, and it may shape the progress and strategies of other certification schemes in the future.

Coffee news and miscellany / Fair and Direct Trade

Counter Culture Coffee transparency report

Counter Culture Coffee has just released its first annual Transparency Report, covering 2009. Simple, straightforward, five pages describing each of CCC’s Direct Trade coffees, including the date of the last farm visit by a CCC employee and how much they paid for each coffee in 2009. This, IMHO, is the future of coffee: roasters providing all the information a consumer could want or need to choose their coffee wisely and with a clear conscience.

Background information / Fair and Direct Trade

Fair Trade environmental standards

It’s hard to blame consumers for being confused by the number of eco-labels on products these days. “Fair Trade” certified coffee is probably the most familiar to many consumers. Fair Trade (generically and as trademarked by various organizations) is primarily concerned with alleviating poverty through greater equity in international trade. Fair Trade is governed in most of the world by the Fairtrade International (FLO).  In the U.S., Fairtrade America is their member organization. The former member, Fair Trade USA, which resigned from the international system in early 2012 and is now a separate entity.

Many people assume, however, that Fairtrade/Fair Trade certification standards also include robust environmental standards. This assumption is promoted by some organizations themselves.

For example, At one time, the Fair Trade USA environmental benefits web page has stated that “over 80% of the Fair Trade certified coffee in the U.S. is also shade-grown.” Currently, the site says “most” is shade-grown. According to the most recent (2006) statistics I could find, only about 40% of the Fair Trade coffee imported into the U.S.  is also certified by Rainforest Alliance and/or Smithsonian Bird-Friendly [1].  More recently, Fairtrade International’s benefits report (found on their Facts and Figures page), notes 51% of Fairtrade certified producers (of ANY product, not just coffee) also hold organic certification, and 10% have Rainforest Alliance certification. Since neither of those certifications guarantees shade themselves, I am not sure if either organization can claim that the majority of their certified coffee is also shade-grown.

In fact, Fair Trade certification has no criteria related to growing coffee under shade, it does not require organic certification, it contains no guidelines for management of native or non-native species, it does not require any inventory of wildlife or prohibit hunting or trafficking in animals. These are all included in the criteria for shade certification by Smithsonian Migratory Bird Center (Bird-Friendly) and/or Rainforest Alliance.

Let’s take a look at the Fairtrade/Fair Trade environmental standards.

Fairtrade International is the association of producer networks and national labeling initiatives, including Fairtrade America, that develops and reviews the Fairtrade standards. There are two sets of standards: overarching generic standards, and standards specific to each type of product. Let’s look at the standards which specifically address preserving and protecting the environment.

Here is a summary of the generic producer standards for small producers (which apply to coffee farmers) that address preserving and protecting the environment:

  • No plant material can be collected from protected areas or propagated illegally.
  • Harvesting of wild products from natural areas must be done sustainably and human impact minimized.
  • Co-ops should have environmental and land use plans and maintain records pertaining to land, water, and chemical use.
  • Co-ops must recognize conservation and buffer areas and not cultivate within them or apply agrochemicals.
  • Virgin forest can’t be cultivated, unless an exception is granted.
  • In areas of low biodiversity or similar degraded areas, co-op members should plant trees or “encourage” regeneration of native flora.
  • Co-ops should promote farm diversity, including reforestation or shade implementation, “as is practical” and “progress should be made over time.”
  • No use of chemicals on a prohibited list.
  • Agrochemicals must be labeled, stored, and used as directed.
  • Use of permitted herbicides must be justified.
  • Producers are expected to seek less toxic alternatives to and try to reduce volumes of agrochemicals to the extent possible.
  • Waste should be reduced, reused, recycled and composted in an appropriate manner.
  • Soil erosion should be managed, soil fertility should be maintained.
  • Water should be managed efficiently and to avoid contamination and depletion of resources.
  • Genetically modified organisms are prohibited.

These are indeed pretty generic. There are few specific criteria and virtually no quantifiable or measurable rules. I expected the product standard for coffee to have more precise restrictions or environmental standards relating to birds and wildlife. Here’s what the 2009 document said:

“There are no additional environmental standards specific to coffee producers.”

Fairtrade International standards can be downloaded from this page.

Fair Trade USA environmental standards are substantially similar and there are no separate documents or guidelines for coffee. Their standards can be downloaded from this page.

There are plenty of worthwhile things about these certifications. The environmental guidelines, however general, are better than none at all and in many cases undoubtedly result in better environmental conditions. I strongly believe that reducing poverty also helps prevent environmental exploitation, and Fair Trade has improved the lives of thousands of farmers. Because Fair Trade coffee is grown by small producers, it is often grown in a sustainable manner.

But just to clarify: Fairtrade/Fair Trade certification alone does not automatically mean or guarantee that rigorous environmental standards were followed, or that the coffee was grown under shade. For that you’ll have to look for an additional seal or seals, or have detailed information about the specific origin to assess growing conditions.

[1] Giovannucci, D., Liu, P. and A. Byers. 2008. Adding value: certified coffee trade in North America. In Pascal Liu (ed.). Value-adding Standards in the North American Food Market – Trade Opportunities in Certified Products for Developing Countries. FAO, Rome. Available online (PDF).

Fair and Direct Trade

Sweet Maria’s Farm Gate Coffee

Green coffee and home roasting supplier Sweet Maria’s has formalized their direct trade buying program, calling it Farm Gate Coffee. Farm Gate prices are at least 50% (but often 100% or more) over Fair Trade prices. Their latest newsletter gives a more thorough explanation.

Even if you don’t roast your own coffee, head over to the Sweet Maria’s web site. I have learned so much there — not only in the coffee library, but also reading the bean reviews and descriptions and the many travelogues that are sprinked throughout the site. It’s a real education!

Fair and Direct Trade / Retail and specialty roasters

Counter Culture Coffee’s Direct Trade program

Counter Culture Coffee recently launched its Direct Trade program. It is a natural progression from their Source project, and is a robust example of similar models employed by other roasters, most notably Intelligentsia. Counter Culture is a pioneer, however, in that their Direct Trade coffees are certified by a third party (Quality Certification Services, paid for by Counter Culture).

Here are the standards:

  • Fair and sustainable prices. Counter Culture works with each farmer to determine their production costs and begins price negotiations accordingly. This is the beauty of a direct relationship: many farmers really don’t know how to determine or track their productions costs, and therefore accept pricing that may not realize a profit for themselves. A direct relationship like this Counter Culture model is a true partnership, with the roaster assisting the farmers in calculating, forecasting, and streamlining their production costs. The result: farmers make a good living, roasters have reliable sources of great coffee.Currently, CCC pays a minimum of $1.60/lb. for green coffee; this is expected to rise in 2009. There are also quality-based financial incentives paid to growers on top of this (see below), designed to encourage ecologically-responsible cultivation methods and sustained quality improvement over time.
  • Personal and direct communiction. Counter Culture visits grower partners on a biennial basis, at minimum. CCC has an entire section on their web site devoted to posts on trips to origin.
  • Exceptional quality. Direct Trade coffees have scored at least 85 on a 100-pt. cup quality scale. The highest quality coffees are rewarded with higher prices paid to the grower.
  • 100% Transparency. All relevant financial information is is available to all parties — growers, buyers, seller, intermediaries, customers — always.

I think this is a superior model to that of Fair Trade certification in a number of ways. First, of course, is that FT certification only applies to small farmers organized into cooperatives, it is not available to family-owned farms or plantations or single producers. Farmers themselves also do not necessarily receive all or a large portion of any price premiums; this is decided by the cooperative. Second, FT pricing does not take into account any differences in cost of production or cost of living in different regions. Third, FT certification does not certify or verify relationships or communications between producers and roasters or retailer, they only certify the financial transactions between them. Finally, FT does not certify, reward, or incorporate quality into their standards.

Some of Counter Culture’s coffees are also Fair Trade certified, but not labelled as such. And not all Counter Culture coffees will be Direct Trade certified, as it
takes some time to work with farmers to get to that level. But the sourcing and purchasing philosophy behind Direct Trade at Counter Culture applies to all their coffees. Congratulations to Counter Culture for this progressive move, which I hope is the future of all coffee sourcing!

Fair and Direct Trade

Fair Trade news

This blog focuses on sustainable coffee specifically as it pertains to the environment. I’ve written some about Fair Trade, because there is a connection between poverty and environmental degradation. But Fair Trade is complex, and the issues surrounding Fair Trade coffee alone are numerous. There are many blogs that focus exclusively on Fair Trade, and C&C will continue to deal more with science and leave the economics to the others. But October is Fair Trade month, and there have been several interesting articles on Fair Trade in the media lately. I’d like to just point out a couple.

  • Fair Trade in bloom — New York Times. Discusses the increase in consumer demand for FT products, and how many big companies are jumping on the bandwagon. Specifically highlighted are Sam’s Club and its Brazilian supplier, Cafe Bom Dia. I’ve already written about Cafe Bom Dia. It is an enormous operation. It’s hard for me to believe Bom Dia cannot pay their farmers more than FT prices. I think the Times article is worthwhile to read along with last year’s piece by the Organic Consumers Organization, Wal-Mart’s attempt to sell the “cheapest Fair Trade coffee in America” generates skepticism.
  • Fair Trade coffee price unchanged after 10 years — National Post (Canada). After a recent increase of US$0.05/lb in the social premium (which goes to communities for schools, clinics, etc.), the minimum price for FT coffee paid to the cooperatives is $1.31/lb. When FT pricing was established, coffee was trading around $0.60/lb. Today, when I checked the market price (“C” coffee futures on the NYBOT), it was trading at $1.36/lb, and yesterday’s composite indicator price (how calculated) for arabicas was around $1.40/lb.The FT price is indexed to the market price; it rises to $0.05/lb above the market price if it reaches the FT minimum. I’m not sure which “market price” FT is based upon (I’m pretty sure it’s the C market), or when or how the new FT price is triggered. However, when coffee prices are rising, due to any number of factors including poor weather, the gap closes between the FT and market prices. Then there is less incentive for co-ops to become FT certified (which costs money), diluting FT’s power until prices fall again. Rising prices aside, the FT is not indexed to inflation or (falling) value of the US dollar. This is a challenging time for FT and farmers, and it will be interesting to see how this all unfolds.

Coffee news and miscellany / Fair and Direct Trade / Retail and specialty roasters

Counter Culture announces "Source"

One of the major criteria a roaster must meet to get favored nation status on the left sidebar as a source of sustainable coffee is transparency. C&C is all about educating consumers on how to recognize and appreciate sustainable coffee. All the knowledge in the world won’t help a coffee buyer if the roaster doesn’t provide enough information on where they get their beans. If a roaster provides country, region, and co-op or farm it goes a long way in helping consumers understand whether the coffee was grown in a sustainable manner. When a roaster has a close relationship with a farmer, they can provide even more data on exactly how the coffee was grown.

Counter Culture Coffee has always been excellent about giving customers lots of information on each of their selections on their web site. They recently announced an expansion and refinement of this commitment, which they are calling “Source.” Each bag of Source coffee includes the farm or co-op’s real name; authentic production details and tasting notes; a precise roast date; a regional map; and vibrant, original artwork inspired by the community that produced it. Indeed, the whole point, noted in their press release, is to

“…achieve a deeper level of consumer education through real, transparent information about each coffee’s distinct seasonality, tasting notes, geographic and cultural origins, and artisan cultivation methods.”

This program goes well beyond marketing and consumer education. Like Intelligentsia’s Direct Trade, and similar “unbranded” programs by other roasters, Source is about working closely with farmers to improve coffee quality and the quality of life for farmers. Fair Trade is such a darling of the green set, but it’s certification is restricted to cooperatives, and does little to address quality. Programs like Source or Direct Trade can do even more than Fair Trade, including paying higher than Fair Trade prices straight to farmers for their crops. For example, Counter Culture paid a 153% premium to the Guarapamba farmers for their La Golondrina Microlot, one of the Source coffees.

Not all roasters can follow this model. Economies of scale make it difficult for very large roasters; they are profit-driven and treat coffee as a commodity rather than a specialty food crop. You simply will not find specialty-grade coffee and close relationships with farmers from corporate coffee roasters. Very small roasters often don’t have the resources to develop working partnerships with individual farms or co-ops (which is not to say many are not sources for sustainable coffees).

Hats off to all roasters who strive to follow this philosophy. Working to transform coffee from an anonymous caffeinated beverage to an identifiable crop, nurtured by real farmers on land that sustains people and biodiversity, is a model we’d be wise to adopt for all of our food. Only then can we choose to purchase sustainable products, increasing demand, and in turn take steps to help to transform the world.

Fair and Direct Trade / Organic coffee

Some recommended reading

Book: Organic Coffee: Sustainable Development by Mayan Farmers by Maria Elena Martinez-Torres. This book is based on a PhD dissertation, but has been skillfully adapted and is very readable while still preserving the excellent information including tables, charts, and references. The book explains the history of coffee farming in Chiapas, Mexico, including growing techniques and political and social considerations.  The author ties it all together with chapters on the economic and ecological benefits of organic coffee farming. A really worthwhile book that is very helpful in understanding organic coffee.

Article: Ethical Certification — Sustainability with a Rich Aroma by Ethical Corporation magazine. Contrasts, compares, and discusses three certification schemes: Rainforest Alliance, Fair Trade, and Utz Kapeh (which has just changed its name to Utz Certified), from a European perspective. Frames the discussion around McDonald’s decision to serve Rainforest Alliance certified coffee in all its UK stores and the controversy around that move. It branches out into the various other certification programs and their costs and requirements, and wades into organic certification and even Starbucks and the trademark issue. Wide-ranging (obviously) to the point of wandering, not too deep, but offers some interesting facts.

Fair and Direct Trade

Intelli on Fair Trade

Geoff Watts of Intelligentsia Coffee wrote a long e-mail lucidly explaining the shortcomings of Fair Trade and Intelli’s strong commitment to farmer relationships, posted at green LA girl. It’s excellent and insightful.

First, he defines sustainable coffee as being profitable to the farmer, enough to enable him to invest, not just subsist; and not damaging to the ecosystem, so the land is preserved for generations.  He goes on to describe

  • the many factors that go into the cost of producing quality coffee, and how the Fair Trade model does not have a mechanism for rewarding quality or taking into account the cost of living and other differentials that occur among farmers of different areas,
  • how much of the FT minimum price actually gets to the farmer, and how the FT minimum also often ends up being the maximum,
  • why Intelligentsia would rather spend ten cents a bag in the producing company, rather than spending it to put a FT sticker on their coffee bags,
  • the depth of Intelli’s relationships with their coffee producers, which dramatically highlights the importance of purchasing coffee from roasters with these types of relationships,
  • and how the FT model is beneficial to and works best with commercial and entry-level specialty coffee.

Many thanks to Geoff for writing and to Siel for posting this.  It really helps consumers (and me!) to understand sustainability issues and make, um, intelligent decisions about the best coffees to drink to support farmers and the environment.  Go give it a read.

Background information / Fair and Direct Trade

What is Fair Trade?

Worldwide, habitat destruction is the leading cause of bird population declines and loss of biodiversity.  The link between poverty and environmental degradation is inescapable.  Making sure that coffee farmers receive a living wage is one way to help preserve habitat — both by  encouraging sustainable coffee farming methods that produce the highest quality coffee, and by empowering farmers economically and reducing their need to exploit the environment for survival.  Here is some background information on Fair Trade.

Fair Trade: What it does
Fair Trade helps small producers of various goods and agricultural products avoid exploitation.  Global Exchange, an excellent resource, lists these Fair Trade principals:

  • Producers receive a fair price; for commodities, farmers receive a stable, minimum price.
  • No forced or child labor allowed.
  • Working conditions are safe and healthy.
  • Equal employment opportunities are provided for all.
  • Buyers and producers trade under direct long-term relationships.
  • Producers have access to financial and technical assistance.
  • All aspects of trade and production are open to public accountability.
  • Sustainable production techniques are encouraged. NOTE: This does not mean that Fair Trade certified coffee was grown under strict environmental standards. See this post for more about the environmental criteria for Fair Trade certification.

Fair Trade certification

Fairtrade Labelling Organizations International sets standards and certifies. In order to reduce consumer confusion, it is working on using one label (the one in color here on the left) for Fair Trade products.

Meanwhile, in the U.S., Fair Trade USA (formerly TransFair USA) places this black and white “Fair Trade Certified” label (right) on coffee, chocolate, and other commodoties. It only indicates that the labeled product is Fair Trade, not that all products from the same company are Fair Trade.

NOTE: As of January 1, 2012, Fair Trade USA will no longer be a member of FLO. See this post for more information.

Because Fair Trade certification can be expensive, and is available only to cooperatives, it is unavailable to some farms who may have otherwise qualified.  An interesting article at Reason Magazine highlights some of these types of Fair Trade issues.  Some roasters gather together to pay fair trade prices — or more — to growers, even though their coffees are not officially certified.  See Cooperative Coffees for an example.

More resources on Fair Trade: