Interesting article but the author misses fundamental concepts. First, Max Havelaar was not started to meet certain wage standards. It was started, primarily, to provide market access. That is still the primary purpose of fair trade certification: to provide market access under decent conditions for small farmers.
Floor price is not the primary mechanism for fair trade. It is an important part of creating economic stability for small farmers but, again, the primary mechanism is market access. If we look at fair trade as a tool, just one of numerous tools available to create market access and more fair trade for small farmers.
The requirement for cooperatives is aimed at finding a non-exploitative structure to help farmers organize. Fair trade grew out of attempts to support organizing and macro-economic change, not just paying a higher price. The cooperative requirement was built into fair trade long before Paul Rice had even heard of fair trade.
Whole Foods was against fair trade for many years—the founder and long time CEO, John Mackey is a self-avowed libertarian who personally opposed some of the market interventions of fair trade.
And Allegro coffee was certainly not living the model before Paul Rice. They did buy from a few producers directly but bought most coffee through brokers and not in ways that empowered many peasant farmers to organize as a way to create better life.
It is true that the fair trade model has evolved little in over 20 years. And it is true that it is not the answer to small farmer poverty.
And, there are ways to get more money directly in the pockets of farmers. History suggests, however, that individual deals and projects, while seemingly more efficient, undermine the movement building that is essential for significant and sustained change. This is what fair trade has supported, with all its imperfections. This is what the technoserve model and Direct Trade ignore. For a few, those models will work better. For large numbers, however, I think it important to look at movement building among farmers.
Further, one thing this article doesn’t touch on is the role of fair trade in changing awareness in the coffee industry and beyond. When we introduced the first fair trade coffee in the 1980’s and 1990’s other coffee companies and leaders laughed or ignored us. They said you couldn’t mix social change work and business. Now, that concept is almost automatic in the coffee industry. That may be fair trade’s most powerful legacy in the USA.
Great Article! As with all environmental initiatives, they often start out well intended but get corrupted or at least watered down by the status quo along the way. These initiatives need to be challenged to evolve and grow, seeking to continuously improve their charter, mission, objectives and effectiveness. It is way to easy to hide behind a banner of “doing good.
It seems like a multi-lateral review team with some transparency made up of interested parties and field experts might be able to jump start this to the next level.
David Podmayersky
Sustainability Director
BYPeter Giuliano, Counter Culture Coffee and Special
Although I was interviewed by Ms. Haight, and although I have been quoted at length at the beginning of the article, I disagree with Haight’s conclusions, and I believe she has misstated my actual opinion of Fair Trade Certified coffee.
The disconnect I was referring to in my quote is that the FLO-Fair Trade USA model emphasizes co-ops, and rarely advertises that fact when promoting Fair Trade Certified coffee. Their public emphasis has been on price- “a minimum wage for coffee farmers”- instead of on the co-op model which is the focus of Fair Trade Certification.
That’s not to say that Fair Trade Certified is bad. The co-op model, however, is worth celebrating, because it is a powerful agent for agricultural transformation in coffee. I believe in co-ops, and I believe in Fair Trade Certified as a way of promoting small producer co-op coffees. I made that clear to Ms. Haight, I’m sorry she chose not to capture that element of my opinion.
Ms. Haight is wrong: I actually buy LOTS of Fair Trade coffee for my business. In fact, FLO certification is an important element of my company’s Direct Trade Certification, which recognizes the importance of both co-ops and larger non-co-op farms.
Ms. Haight presents TechnoServe as an alternative to Fair Trade, but they are not: TechnoServe is a development agency which competes for outside funding of their projects, NOT a certification available to consumers. TechnoServe works in concert with Fair Trade certified cooperatives often. Thinking of the two as alternatives is incorrect. Technoserve also sells no coffee, so Peet’s cannot “buy coffee” from them as Haight states.
In general, this article sadly does not capture the complexity and vibrance of the fair trade coffee movement, and winds up painting an incomplete and incorrect picture, in my opinion. I disagree strongly with most of her conclusions.
I am sorry if you feel I misrepresented your views. You were very clear in your interview that you strongly support cooperatives as a business structure. My article is not intended as a condemnation of cooperatives, but rather as an examination of Fair Trade as a model intended to alleviate poverty. You did indeed tell me you bought from Fair Trade-certified cooperatives for your own business. However, you also were clear that you did not purchase Fair Trade-certified coffee, as you do not pay the royalties required to use the Fair Trade-
certified label.
From my transcription of our conversation, you said: “We actually have a third party certifier and the consumers totally accept that as a substitute for Fair Trade. My customers did.” Later in the interview
you said, “We’re not paying TransFair their ten cents.” (The ten cents being the fee paid directly to Fair Trade USA, formerly TransFair, to allow the use of the certification label.)
You clarified that your floor price was higher than the Fair Trade floor price, and that you might also pay an additional premium as high as $0.80 on top of that to obtain the quality your customers demand.
Some of the readers of this article may not be clear that while a cooperative may be certified for the production of Fair Trade coffee, and while some of their harvest may be sold as Fair Trade-certified
coffee, there is not sufficient demand to sell all the coffee produced according to Fair Trade guidelines. The cooperatives therefore sell this excess production on the open market to buyers such as yourself.
As for TechnoServe, my point is that it is an alternative to Fair Trade because it provides tools for alleviating poverty among coffee growers. I did not state that TechnoServe provides certification. Shirin Moayyad at Peet’s brought the TechnoServe model to my attention as one that she believes is providing tangible and sustainable benefits to coffee farming communities.
I would like to underscore that the opinions expressed in this article are mine and mine alone. My opinions, however, are based on the numerous conversations I have had with people in different segments of the coffee industry—from farm owners and workers to importers, roasters, and retailers.
I agree that the author misses fundamental concepts. However, if coffee prices are related to the coffee qualities in a complex market (and quality also determines the price the farmer recive), how can be possible that strict certification requirements result in uneven economic advantages for coffee growers, and lower quality for consumers? It’s totally senseless.
The author misses the fundamental point that the Fairtrade standards are clear that farmers should either receive the Fairtrade minimum price OR the market price, WHICHEVER IS HIGHER. When market prices are higher than the Fairtrade minimum price, the farmers should receive the market price for their Fairtrade crops. The Fairtrade minimum price acts as a safety net for when prices are low, and a mechanism to reduce price volatility.
Regarding Fairtrade Premium use, the Fairtrade movement has always stood for the right of farmer and worker organizations to decide themselves how to use Premium money. Increasingly, farmer organizations see that it makes sense to invest Premium money in increasing the quality and productivity of their businesses - because this will support the long-term sustainability of their members’ businesses. Critics of Fairtrade cannot on the one hand argue that the system does little to support quality and productivity whilst also suggesting that it is somehow inappropriate for Premium monies to be used to support business development. Whilst the majority of Premium funds are still used for community projects, such as supporting schools, the use of Fairtrade Premium to support business improvements is an important and welcome development.
The point on record-keeping is also misplaced. All certification systems require some level of record keeping, and most of them require an internal management system to be in place within the farmer organization. In fact, Fairtrade demands on producers are lighter than other certification systems in this respect. However, since many farmer groups are certified to more than one system - eg organic plus Fairtrade - it can be challenging for individual farmers to identify which requirement relates to which certification system.
I have been working inf FT for 15 years - both as a producer and a researcher.
As the many critiques pointed out, the author missed the point of FT - the long term stability it provides, support of local governance, development of cooperatives, skills building, environmental protection. All of the non-monetary things that become invisible with the lack of a $ attached to it. There’s lots of great research out there that documents this.
I have spoken to several FT Farmers from Latin America and Bolivia. They start investing their social funds into their business when they have exhausted their community needs (they already built the school, health clinic, roads, and bridges). FLO recently recognized and supported the right of farmers to choose collectively (through their cooperative structure) who to spend their social funds.
It is true that FairTradeUSA is very influential in FT, they have the most lenient guidelines, and offer no discrepancy at all when deciding who to give access to Fair Trade (ie WalMart), but that is not really addressed in this article. Plus WalMart (now the largest buyer of FT coffee in the world) sells their FT coffee at a more accessible price for lower income consumers - thus democratizing consumer access to FT.
FT has has a tremendous effect on the stabilization and growth of local communities, education and skills building of farmers, and sustainable farming in an industry that originally was very environmentally detrimental. It also gets children out of the fields, away from pesticides, and into school. This is huge (especially in the chocolate and flower industry).
FT isn’t perfect and it’s good to think critically. The best thing about FT is the industry is so open to new ideas (FLO just updated their certification requirements to make the paperwork easier for farmers this year). So thinking now of what the next 20 years needs, will be more helpful than poo-pooing the hard work that has already taken place in an industry that has evolved in ways never thought possible in today’s world of competitive, winner-takes-all, “free” trade.
1) “This (the cooperative requirement) means that private estate farmers and multinational companies like Kraft or Nestlé that grow their own coffee cannot be certified as Fair Trade coffee, even if they pay producers well, help create environmentally sustainable and organic products, and build schools and medical clinics for grower communities. Although the cooperative requirement may seem unusual….”
2) “Another important flaw is FLO’s inability to alter the circumstances of the poorest of the poor in the coffee farming community….the migrant laborer who does not have the resources to own land and thus cannot be part of a cooperative.”
3) “My article is not intended as a condemnation of cooperatives, but rather as an examination of Fair Trade as a model intended to alleviate poverty. ”
FDR (Franklin Delano Roosevelt) not withstanding, eliminating poverty though efficiency is NOT a stand-alone objective. The American frontier was a place of poverty borne for the sake of self-determination.
Mom and Pop stores likely will not distribute goods as efficiently as Walmart; Mom and Pop just aren’t as smart as the few guys running Walmart. But small ownership lends dignity to existence by giving Mom/Pop/children concrete problems to evoke critical thinking skills and creativity for survival. Same with a small farm.
Big outsiders (Walmart, Kraft, Nestle) doing everything to “eliminate poverty” at the lowest level so that they can take over the land from the next lowest level is nothing this American can get behind. Since WWII, we’ve seen a decline in demonstrated intelligence in the majority of our own population for the sake of efficiency and “eliminating poverty” by large outside intervention rather than developing the common man tied to the land, aka the “little guy.”
Eliminating poverty is NOT a stand-alone objective! For those with a concept of human dignity, self-determination trumps poverty.
“The market today is five times higher than when FLO entered the United States. The market’s at $2.50 (per pound for commodity coffee) today vs. the 40 cents or 50 cents (per pound) it was at in 2001,” says Dennis Macray, former director of global sustainability at Starbucks Coffee Co. This price shift dampens farmers’ desire to sell their high-quality coffee at the Fair Trade price. Many co-ops, according to Macray, are choosing to default on the Fair Trade contracts, so that they can do better for their members by selling on the open market.”
- Isn’t this actually a good sign that the conditions for selling coffee are improving? It seems to me that nowadays farmers have greater market access than in 2001 and more options when choosing their products’ outlets. But Fair trade’s existence is legitimate because it functions as a fail safe if something would happen in the market. From my own experience, based on purchasing from Fair Trade shops in Toronto since 1997, I can confirm the increasing demand and popularity of Fair Trade products. The number of shops offering these kind of products has increased tremendously.
This article seems to me a good example of what needs to happen in all ethical, social-economic movements—we need to continue to refine what counts for our best efforts, ethically and economically, to make sure we are best serving those we intend to serve.
This article essentially suggests not that there is a problem with Fair Trade coffee, but that there are a couple of perverse incentives in the Fair Trade legislation and its certification process that need to be addressed.
Fair trade as a movement is sound: that if people are informed, they will pay more so that their material purchases are not made on the backs of the disenfranchised, the starving, the destitute.
Just because a specific instantiation of the model has problems does not mean the overall premise is unsound. The Stanford Social Innovation Review can do better than articles with such weak internal validity.
Notice that the author of this article (besides giving a very incorrect rendition of the views of the person (peter) she quotes at the beginning—-which is poor journalism given the rest of the article which covers some of these issues) is a visiting prof at GMU’s Institute for Humane studies a Koch/Scaife funded libertarian outfit. (Just her describing Starbucks and Whole Foods—-both anti-union——more or less indicates her emphasis )
But this comes from Stanford. (i guess they have paul erlich to cover their tracks as a token environmentalist).
The problem is that corruption and mismanagement occurs everywhere. Even a group that starts with good intentions can end up turning against those intentions and becoming corrupt.
For my little understanding and experience in my area, I can likely believe that Fair trade is not for mallholder farmers in developing countries whereby majority of farmers are not clearly organized, if they are organized, the organization is fragmented, meaning there many groups with minimum of 3 members each one having his/her own practices and standards they adopted from their ancestors
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The author did a great job of representing several angles to the arguments in her article. I did not walk away with a sense that she indicated that FT is a terrible or failing concept. However, there are some ethical issues here, such as money and power and the fact that money and power does not “trickle down” to a simple farmer.
Some of the “critiques” are also clearly biased yet interesting.
I suspect in her effort to produce an article brief enough that people will read the whole thing, the author left out certain important details. Not sure what they are, but I definitely walked away feeling like there is way more to this model and the required analysis than what is explained here. There’s enough there for a mere consumers like me to have to question the real meaning and benefits of buying FTO certified coffee, but not enough to conclude that there’s a better alternative at this point. And of course, as with any piece of persuasive writing, the piece will slant a certain direction (that being the point of persuasive writing after all). Most helpful would be more discussion of how to fix the problem or examples of existing efforts to do so. But in the end a piece of this length can’t be everything to everyone. So while there are flaws, I think the author likely achieved her goal with the article.
The description of the history of fair trade in Europe and the US could use some polishing. Certified Fair Trade was introduced into the US by the Institute for Agriculture and Trade Policy in Minnesota after a number of meetings with key groups from around the country and Europe. There are a number of people around who were there at the beginning who know the full history that would be worth interviewing if that subject is of interest.
Understanding the central role of Transfair International in helping to launch this in Canada and the US and the many contributions of Equal Exchange who invested much into this effort prior to the introduction of the certification by IATP is crucial background to understanding how this system has developed. In addition, the full story from Europe - including the first brand developments in the UK and the evolution of the various national versions of Max Havelaar labeling and of Transfair International - is important to tell since these were very different approaches that needed to be blended together over time. The history is very important - getting it accurate is crucial.
Given the educated status of the author it can only be intentionally misleading that the article proports the following lie:
“the Dutch East India Company, operating for the benefit of the mother country in “the colonies,” were afforded monopoly privileges and protected from local competition by tariffs.”
This statement implies that the Dutch East India Company was burdoned with paying tariffs. In fact, initially they were required to pay tariffs but the British government then exempted them from this tariff and subjected American colonists to a tax on stamps. Tariffs are beneficial to countries engaged in international trade because it is a way of taxing corporations to pay for public education and health care for all.
Keenan: Dutch East India Company ... protected from local competition by tariffs. I.e. ... they had to pay tariffs and dutch east india company didn’t. I.e. doesn’t imply that they were burdened with paying tariffs I.e. why u so pretentious??
Sorry, but it sounds Like corporate whining or every one deserves a trophy. I buy it because I can rely on the taste. If you can’t met the standards, tough!
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I have read some qualitative research coming from the anthropological side of academia based on interviews with local coffee farmers in a coffee growing community (publsihed by Molly Doane and colleagues). I can not remember the details, but I do recall that the argument of this line of research was that coffee farmers have concerns over the sufficiency of incentives. Specifically, the added benefits may go toward establishing more sustainable practices, but not necessarily higher pay or better living/working conditions for the people working in these types of settings. So there is a potentially interesting dilemma- is it good enough for the workers/owners as it is supposed to be for the sustainable growth of their production?
Lot’s of really great information. I’m a big fan of fair trade and will always be that way. I did enjoy reading your study, but the health benefits alone are worth the battle. Commodity coffee has no real worth when it comes to taste, antioxidants not to mention aromas that fair trade coffee can produce.
COMMENTS
BY Jonathan
ON June 23, 2011 11:24 AM
Interesting article but the author misses fundamental concepts. First, Max Havelaar was not started to meet certain wage standards. It was started, primarily, to provide market access. That is still the primary purpose of fair trade certification: to provide market access under decent conditions for small farmers.
Floor price is not the primary mechanism for fair trade. It is an important part of creating economic stability for small farmers but, again, the primary mechanism is market access. If we look at fair trade as a tool, just one of numerous tools available to create market access and more fair trade for small farmers.
The requirement for cooperatives is aimed at finding a non-exploitative structure to help farmers organize. Fair trade grew out of attempts to support organizing and macro-economic change, not just paying a higher price. The cooperative requirement was built into fair trade long before Paul Rice had even heard of fair trade.
Whole Foods was against fair trade for many years—the founder and long time CEO, John Mackey is a self-avowed libertarian who personally opposed some of the market interventions of fair trade.
And Allegro coffee was certainly not living the model before Paul Rice. They did buy from a few producers directly but bought most coffee through brokers and not in ways that empowered many peasant farmers to organize as a way to create better life.
It is true that the fair trade model has evolved little in over 20 years. And it is true that it is not the answer to small farmer poverty.
And, there are ways to get more money directly in the pockets of farmers. History suggests, however, that individual deals and projects, while seemingly more efficient, undermine the movement building that is essential for significant and sustained change. This is what fair trade has supported, with all its imperfections. This is what the technoserve model and Direct Trade ignore. For a few, those models will work better. For large numbers, however, I think it important to look at movement building among farmers.
Further, one thing this article doesn’t touch on is the role of fair trade in changing awareness in the coffee industry and beyond. When we introduced the first fair trade coffee in the 1980’s and 1990’s other coffee companies and leaders laughed or ignored us. They said you couldn’t mix social change work and business. Now, that concept is almost automatic in the coffee industry. That may be fair trade’s most powerful legacy in the USA.
BY dpodmaye
ON June 23, 2011 12:52 PM
Great Article! As with all environmental initiatives, they often start out well intended but get corrupted or at least watered down by the status quo along the way. These initiatives need to be challenged to evolve and grow, seeking to continuously improve their charter, mission, objectives and effectiveness. It is way to easy to hide behind a banner of “doing good.
It seems like a multi-lateral review team with some transparency made up of interested parties and field experts might be able to jump start this to the next level.
David Podmayersky
Sustainability Director
BY Peter Giuliano, Counter Culture Coffee and Special
ON June 23, 2011 02:40 PM
Although I was interviewed by Ms. Haight, and although I have been quoted at length at the beginning of the article, I disagree with Haight’s conclusions, and I believe she has misstated my actual opinion of Fair Trade Certified coffee.
The disconnect I was referring to in my quote is that the FLO-Fair Trade USA model emphasizes co-ops, and rarely advertises that fact when promoting Fair Trade Certified coffee. Their public emphasis has been on price- “a minimum wage for coffee farmers”- instead of on the co-op model which is the focus of Fair Trade Certification.
That’s not to say that Fair Trade Certified is bad. The co-op model, however, is worth celebrating, because it is a powerful agent for agricultural transformation in coffee. I believe in co-ops, and I believe in Fair Trade Certified as a way of promoting small producer co-op coffees. I made that clear to Ms. Haight, I’m sorry she chose not to capture that element of my opinion.
Ms. Haight is wrong: I actually buy LOTS of Fair Trade coffee for my business. In fact, FLO certification is an important element of my company’s Direct Trade Certification, which recognizes the importance of both co-ops and larger non-co-op farms.
Ms. Haight presents TechnoServe as an alternative to Fair Trade, but they are not: TechnoServe is a development agency which competes for outside funding of their projects, NOT a certification available to consumers. TechnoServe works in concert with Fair Trade certified cooperatives often. Thinking of the two as alternatives is incorrect. Technoserve also sells no coffee, so Peet’s cannot “buy coffee” from them as Haight states.
In general, this article sadly does not capture the complexity and vibrance of the fair trade coffee movement, and winds up painting an incomplete and incorrect picture, in my opinion. I disagree strongly with most of her conclusions.
Peter Giuliano
BY Colleen Haight
ON June 24, 2011 12:48 PM
Peter,
I am sorry if you feel I misrepresented your views. You were very clear in your interview that you strongly support cooperatives as a business structure. My article is not intended as a condemnation of cooperatives, but rather as an examination of Fair Trade as a model intended to alleviate poverty. You did indeed tell me you bought from Fair Trade-certified cooperatives for your own business. However, you also were clear that you did not purchase Fair Trade-certified coffee, as you do not pay the royalties required to use the Fair Trade-
certified label.
From my transcription of our conversation, you said: “We actually have a third party certifier and the consumers totally accept that as a substitute for Fair Trade. My customers did.” Later in the interview
you said, “We’re not paying TransFair their ten cents.” (The ten cents being the fee paid directly to Fair Trade USA, formerly TransFair, to allow the use of the certification label.)
You clarified that your floor price was higher than the Fair Trade floor price, and that you might also pay an additional premium as high as $0.80 on top of that to obtain the quality your customers demand.
Some of the readers of this article may not be clear that while a cooperative may be certified for the production of Fair Trade coffee, and while some of their harvest may be sold as Fair Trade-certified
coffee, there is not sufficient demand to sell all the coffee produced according to Fair Trade guidelines. The cooperatives therefore sell this excess production on the open market to buyers such as yourself.
As for TechnoServe, my point is that it is an alternative to Fair Trade because it provides tools for alleviating poverty among coffee growers. I did not state that TechnoServe provides certification. Shirin Moayyad at Peet’s brought the TechnoServe model to my attention as one that she believes is providing tangible and sustainable benefits to coffee farming communities.
I would like to underscore that the opinions expressed in this article are mine and mine alone. My opinions, however, are based on the numerous conversations I have had with people in different segments of the coffee industry—from farm owners and workers to importers, roasters, and retailers.
Colleen E. Haight
BY Enrique
ON June 26, 2011 02:55 PM
I agree that the author misses fundamental concepts. However, if coffee prices are related to the coffee qualities in a complex market (and quality also determines the price the farmer recive), how can be possible that strict certification requirements result in uneven economic advantages for coffee growers, and lower quality for consumers? It’s totally senseless.
BY Katharine
ON June 28, 2011 01:27 AM
This is a very muddled article.
The author misses the fundamental point that the Fairtrade standards are clear that farmers should either receive the Fairtrade minimum price OR the market price, WHICHEVER IS HIGHER. When market prices are higher than the Fairtrade minimum price, the farmers should receive the market price for their Fairtrade crops. The Fairtrade minimum price acts as a safety net for when prices are low, and a mechanism to reduce price volatility.
Regarding Fairtrade Premium use, the Fairtrade movement has always stood for the right of farmer and worker organizations to decide themselves how to use Premium money. Increasingly, farmer organizations see that it makes sense to invest Premium money in increasing the quality and productivity of their businesses - because this will support the long-term sustainability of their members’ businesses. Critics of Fairtrade cannot on the one hand argue that the system does little to support quality and productivity whilst also suggesting that it is somehow inappropriate for Premium monies to be used to support business development. Whilst the majority of Premium funds are still used for community projects, such as supporting schools, the use of Fairtrade Premium to support business improvements is an important and welcome development.
The point on record-keeping is also misplaced. All certification systems require some level of record keeping, and most of them require an internal management system to be in place within the farmer organization. In fact, Fairtrade demands on producers are lighter than other certification systems in this respect. However, since many farmer groups are certified to more than one system - eg organic plus Fairtrade - it can be challenging for individual farmers to identify which requirement relates to which certification system.
BY Tamara Stenn, Keene State College
ON July 21, 2011 05:50 PM
I have been working inf FT for 15 years - both as a producer and a researcher.
As the many critiques pointed out, the author missed the point of FT - the long term stability it provides, support of local governance, development of cooperatives, skills building, environmental protection. All of the non-monetary things that become invisible with the lack of a $ attached to it. There’s lots of great research out there that documents this.
I have spoken to several FT Farmers from Latin America and Bolivia. They start investing their social funds into their business when they have exhausted their community needs (they already built the school, health clinic, roads, and bridges). FLO recently recognized and supported the right of farmers to choose collectively (through their cooperative structure) who to spend their social funds.
It is true that FairTradeUSA is very influential in FT, they have the most lenient guidelines, and offer no discrepancy at all when deciding who to give access to Fair Trade (ie WalMart), but that is not really addressed in this article. Plus WalMart (now the largest buyer of FT coffee in the world) sells their FT coffee at a more accessible price for lower income consumers - thus democratizing consumer access to FT.
FT has has a tremendous effect on the stabilization and growth of local communities, education and skills building of farmers, and sustainable farming in an industry that originally was very environmentally detrimental. It also gets children out of the fields, away from pesticides, and into school. This is huge (especially in the chocolate and flower industry).
FT isn’t perfect and it’s good to think critically. The best thing about FT is the industry is so open to new ideas (FLO just updated their certification requirements to make the paperwork easier for farmers this year). So thinking now of what the next 20 years needs, will be more helpful than poo-pooing the hard work that has already taken place in an industry that has evolved in ways never thought possible in today’s world of competitive, winner-takes-all, “free” trade.
BY Ann Malone
ON July 23, 2011 02:25 PM
I found these three statements chilling:
1) “This (the cooperative requirement) means that private estate farmers and multinational companies like Kraft or Nestlé that grow their own coffee cannot be certified as Fair Trade coffee, even if they pay producers well, help create environmentally sustainable and organic products, and build schools and medical clinics for grower communities. Although the cooperative requirement may seem unusual….”
2) “Another important flaw is FLO’s inability to alter the circumstances of the poorest of the poor in the coffee farming community….the migrant laborer who does not have the resources to own land and thus cannot be part of a cooperative.”
3) “My article is not intended as a condemnation of cooperatives, but rather as an examination of Fair Trade as a model intended to alleviate poverty. ”
FDR (Franklin Delano Roosevelt) not withstanding, eliminating poverty though efficiency is NOT a stand-alone objective. The American frontier was a place of poverty borne for the sake of self-determination.
Mom and Pop stores likely will not distribute goods as efficiently as Walmart; Mom and Pop just aren’t as smart as the few guys running Walmart. But small ownership lends dignity to existence by giving Mom/Pop/children concrete problems to evoke critical thinking skills and creativity for survival. Same with a small farm.
Big outsiders (Walmart, Kraft, Nestle) doing everything to “eliminate poverty” at the lowest level so that they can take over the land from the next lowest level is nothing this American can get behind. Since WWII, we’ve seen a decline in demonstrated intelligence in the majority of our own population for the sake of efficiency and “eliminating poverty” by large outside intervention rather than developing the common man tied to the land, aka the “little guy.”
Eliminating poverty is NOT a stand-alone objective! For those with a concept of human dignity, self-determination trumps poverty.
BY Jamie Sarner
ON September 23, 2011 07:10 AM
“The market today is five times higher than when FLO entered the United States. The market’s at $2.50 (per pound for commodity coffee) today vs. the 40 cents or 50 cents (per pound) it was at in 2001,” says Dennis Macray, former director of global sustainability at Starbucks Coffee Co. This price shift dampens farmers’ desire to sell their high-quality coffee at the Fair Trade price. Many co-ops, according to Macray, are choosing to default on the Fair Trade contracts, so that they can do better for their members by selling on the open market.”
- Isn’t this actually a good sign that the conditions for selling coffee are improving? It seems to me that nowadays farmers have greater market access than in 2001 and more options when choosing their products’ outlets. But Fair trade’s existence is legitimate because it functions as a fail safe if something would happen in the market. From my own experience, based on purchasing from Fair Trade shops in Toronto since 1997, I can confirm the increasing demand and popularity of Fair Trade products. The number of shops offering these kind of products has increased tremendously.
BY Jerry Rasch
ON November 21, 2012 10:46 AM
This article seems to me a good example of what needs to happen in all ethical, social-economic movements—we need to continue to refine what counts for our best efforts, ethically and economically, to make sure we are best serving those we intend to serve.
BY Elizabeth Kronoff
ON May 14, 2013 10:33 AM
This article essentially suggests not that there is a problem with Fair Trade coffee, but that there are a couple of perverse incentives in the Fair Trade legislation and its certification process that need to be addressed.
Fair trade as a movement is sound: that if people are informed, they will pay more so that their material purchases are not made on the backs of the disenfranchised, the starving, the destitute.
Just because a specific instantiation of the model has problems does not mean the overall premise is unsound. The Stanford Social Innovation Review can do better than articles with such weak internal validity.
BY ishi
ON June 28, 2013 02:21 AM
Notice that the author of this article (besides giving a very incorrect rendition of the views of the person (peter) she quotes at the beginning—-which is poor journalism given the rest of the article which covers some of these issues) is a visiting prof at GMU’s Institute for Humane studies a Koch/Scaife funded libertarian outfit. (Just her describing Starbucks and Whole Foods—-both anti-union——more or less indicates her emphasis )
But this comes from Stanford. (i guess they have paul erlich to cover their tracks as a token environmentalist).
BY Jared Mullins
ON July 1, 2013 08:46 AM
The problem is that corruption and mismanagement occurs everywhere. Even a group that starts with good intentions can end up turning against those intentions and becoming corrupt.
BY Paschal
ON March 26, 2014 10:39 AM
For my little understanding and experience in my area, I can likely believe that Fair trade is not for mallholder farmers in developing countries whereby majority of farmers are not clearly organized, if they are organized, the organization is fragmented, meaning there many groups with minimum of 3 members each one having his/her own practices and standards they adopted from their ancestors
BY Esperanza
ON May 8, 2014 09:09 PM
Hi! I know this is kinda off topic but I was wondering which
blog platform are you using for this site? I’m getting tired
of Wordpress because I’ve had problems with hackers and I’m looking at alternatives
for another platform. I would be awesome if you could point me in the direction
of a good platform.
BY Elisa
ON October 26, 2014 10:27 PM
The author did a great job of representing several angles to the arguments in her article. I did not walk away with a sense that she indicated that FT is a terrible or failing concept. However, there are some ethical issues here, such as money and power and the fact that money and power does not “trickle down” to a simple farmer.
Some of the “critiques” are also clearly biased yet interesting.
BY Emily
ON November 15, 2014 06:21 AM
I suspect in her effort to produce an article brief enough that people will read the whole thing, the author left out certain important details. Not sure what they are, but I definitely walked away feeling like there is way more to this model and the required analysis than what is explained here. There’s enough there for a mere consumers like me to have to question the real meaning and benefits of buying FTO certified coffee, but not enough to conclude that there’s a better alternative at this point. And of course, as with any piece of persuasive writing, the piece will slant a certain direction (that being the point of persuasive writing after all). Most helpful would be more discussion of how to fix the problem or examples of existing efforts to do so. But in the end a piece of this length can’t be everything to everyone. So while there are flaws, I think the author likely achieved her goal with the article.
BY Mark Ritchie
ON November 22, 2014 08:14 AM
The description of the history of fair trade in Europe and the US could use some polishing. Certified Fair Trade was introduced into the US by the Institute for Agriculture and Trade Policy in Minnesota after a number of meetings with key groups from around the country and Europe. There are a number of people around who were there at the beginning who know the full history that would be worth interviewing if that subject is of interest.
Understanding the central role of Transfair International in helping to launch this in Canada and the US and the many contributions of Equal Exchange who invested much into this effort prior to the introduction of the certification by IATP is crucial background to understanding how this system has developed. In addition, the full story from Europe - including the first brand developments in the UK and the evolution of the various national versions of Max Havelaar labeling and of Transfair International - is important to tell since these were very different approaches that needed to be blended together over time. The history is very important - getting it accurate is crucial.
BY Valencia Joshua
ON December 23, 2014 12:50 AM
i think local certification by local organizations which is cheaper would be good for agricultural markets in developing countries
BY Keenen Altic
ON January 23, 2015 10:25 AM
Given the educated status of the author it can only be intentionally misleading that the article proports the following lie:
“the Dutch East India Company, operating for the benefit of the mother country in “the colonies,” were afforded monopoly privileges and protected from local competition by tariffs.”
This statement implies that the Dutch East India Company was burdoned with paying tariffs. In fact, initially they were required to pay tariffs but the British government then exempted them from this tariff and subjected American colonists to a tax on stamps. Tariffs are beneficial to countries engaged in international trade because it is a way of taxing corporations to pay for public education and health care for all.
BY Dan Gleesack
ON April 11, 2015 06:00 PM
Keenan: Dutch East India Company ... protected from local competition by tariffs. I.e. ... they had to pay tariffs and dutch east india company didn’t. I.e. doesn’t imply that they were burdened with paying tariffs I.e. why u so pretentious??
BY Loren Curtis
ON May 12, 2015 09:50 AM
Sorry, but it sounds Like corporate whining or every one deserves a trophy. I buy it because I can rely on the taste. If you can’t met the standards, tough!
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ON March 24, 2016 05:08 PM
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BY Sadhbh
ON April 10, 2016 06:21 PM
Wonderful site. A good read for the soul. We must take care of our wonderful planet and it will take good care of us in return.
BY Mary
ON April 13, 2016 11:30 AM
I have read some qualitative research coming from the anthropological side of academia based on interviews with local coffee farmers in a coffee growing community (publsihed by Molly Doane and colleagues). I can not remember the details, but I do recall that the argument of this line of research was that coffee farmers have concerns over the sufficiency of incentives. Specifically, the added benefits may go toward establishing more sustainable practices, but not necessarily higher pay or better living/working conditions for the people working in these types of settings. So there is a potentially interesting dilemma- is it good enough for the workers/owners as it is supposed to be for the sustainable growth of their production?
BY Jake Conway
ON November 27, 2018 09:05 PM
Lot’s of really great information. I’m a big fan of fair trade and will always be that way. I did enjoy reading your study, but the health benefits alone are worth the battle. Commodity coffee has no real worth when it comes to taste, antioxidants not to mention aromas that fair trade coffee can produce.