Associated Press
via Fox
News
May 31, 2012
MONTPELIER, Vt. – After a
quarter-century working to improve the lives of farmers in places like Latin
America and Africa, the fair trade movement is at a crossroads.
Will it expand its mission to include bigger players and a larger
share of the markets in coffee, cocoa, bananas and other products? Or will it
stay with its original purpose, empowering small farmers, often working through
cooperatives, with higher prices for their crops and more clout in setting
international trade practices?
In Vermont, which has long prided itself on being home to
companies that pursue both profits and a social mission, the question gained
broad notice on May 20, when the fair trade policies of Waterbury-based Green
Mountain Coffee Roasters were targeted in a full-page ad in The Burlington Free
Press.
Bridgewater, Mass.-based Equal Exchange Inc., which markets fair
trade coffee, chocolate and other products, called on Green Mountain to sever
relations with Oakland, Calif.-based Fair Trade USA, the national leader in
certifying products as eligible for the fair trade label.
So far in the history of the movement, fair trade "has
exceeded all expectations for success," the Equal Exchange ad said.
"More small farmers have market access, improved living standards, and
have achieved greater economic control and political power."
Fair Trade USA "changed the rules to allow large-scale
plantations and private estates into the (fair trade) coffee system," the
Equal Exchange ad said, "potentially putting at risk the very survival of
the farmer cooperatives."
FTUSA has defended the changes, which were
announced last year and implemented in January.
"We believe the future of
Fair Trade lies in a more inclusive approach that supports everyone in the
global coffee supply chain that is willing to commit to a journey of
sustainability, responsibility, empowerment and impact," the organization
says on its website.
The fair trade movement dates to
the 1940s, when a Pennsylvania Mennonite named Edna Ruth Byler traveled to Puerto
Rico and was shocked by the poverty. She set up a business to sell the
needlecrafts of female artisans she met on the trip; it later grew into the
nonprofit retailer Ten Thousand Villages.
The movement began to blossom in
Europe in the 1980s and since then has gone global, with coffee its leading
commodity.
Companies looking to affix a fair
trade label to their products go to an independent third party, such as FTUSA
or Fairtrade International, to get certification that their products are coming
from sources that meet certain standards.
Fairtrade International, based in Bonn, Germany, with affiliates in about two dozen countries, has standards for the sort of "small producer organization" preferred by companies like Equal Exchange. Among them: "Democracy. Profits should be equally distributed among the producers. All members have a voice and vote in the decision-making process of the organization."
The results, say fair trade
advocates, are improved conditions for farmers, as well as a way for consumers
to see by the label on a chocolate bar or bag of coffee beans that their
purchase is contributing to that improvement.
Under fair trade rules, farmers get a $1.40
per pound "floor price" for coffee — a minimum maintained even if
commodity markets go lower; a 20-cents-per-pound "social premium,"
which pays for communal benefits like health clinics or schools; and an extra
30-cent premium if the coffee is organic.
If large plantations are allowed
into the fair trade system, critics say, they could become eligible for
premiums they don't need to be profitable. There's also widespread concern that
the small farmer cooperatives could be squeezed out.
The concern is that "large
companies will use the fair trade seal to do what they call 'fair-wash,' to get
the halo effect and perhaps confuse consumers about their overall
practices," said Daniel Jaffee, an assistant professor of sociology at
Washington State University who has studied the movement.
In some ways, the fair trade
debate is reminiscent of previous quarrels over what counts as organic.
Consumers often are willing to pay more for products many see as healthier or
grown in a more ethical fashion; more companies want to grab a share of that
market and, when they start to do so, raise questions about whether standards
are being diluted.
FTUSA has split from Fairtrade
International.
Officials at both Green Mountain
and Seattle-based Starbucks, the two largest marketers of fair trade coffee in
the United States, said they're staying with FTUSA for now, waiting to see how
its push to broaden the market works out and, they insisted, not slackening in
the efforts to ensure their products are ethically sourced.
"We're engaging with
everybody and we're really trying to figure this out," said Ed Canty, a
coffee buyer with Green Mountain. He said the company wants very much to
protect small farmers.
Ben Packard, Starbucks' vice
president for global responsibility, said his company, like Green Mountain, is
pushing the fair trade agenda on several fronts. "We are waiting to see
what the implications of these different schemes on the marketplace are going
to mean," he said.
Separately, Starbucks is
continuing to pursue a certification system it set up, along with the nonprofit
Conservation International, called Coffee and Farmer Equity, or C.A.F.E.
Practices, Packard said.
Requirements would include
transparency. Suppliers must tell Starbucks how much money is going to farmers
and provide humane working conditions and sound environmental practices.
The rift in the fair trade
movement has been resonating in coffee-producing countries.
Jeronimo Pruijn, a leader of the
Latin American and Caribbean Network of Small Fair Trade Producers, said a key
to the movement has been democratic control of cooperatives by farmers
themselves.
He and other critics of FTUSA's
decision to begin labeling products from large plantations as fair trade said
the group did little or nothing to consult the farmers likely most affected by
its decision.
"A private owned company can
by no means be compared with a collectively owned coop or association,"
Pruijn said in an email from Mexico City. "Different values, different
decision-making processes and different costs are involved which make these two
models to be incompatible within (one) certification system and promotion
strategy."
FTUSA President and CEO Paul Rice
said in a recent interview that he will continue to push to make fair trade a
bigger feature of Americans' shopping experience, by increasing the numbers of
consumers who shop for fair trade products, as well as the farmers included in
the supply chain.
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Related:
Green Mountain Coffee challenged on fair trade label
May 21,
2012
MONTPELIER
— Two stalwarts in the fair-trade coffee movement are at odds over a move by a
national certifying organization to expand beyond small, farmer-owned
cooperatives and allow larger growers to sell their product with a fair trade
label.
Equal
Exchange in West Bridgewater, Mass., took out a full-page ad Sunday in The
Burlington Free Press calling on Waterbury-based Green Mountain Coffee Roasters
to sever relations with Fair Trade USA.
Equal
Exchange criticized Fair Trade USA for leaving an international umbrella group
devoted to fair trade and for inviting larger coffee plantations into the fair
trade fold.
“With
this move, they threaten to reverse decades of hard-won gains while potentially
putting at risk the very survival of the farmer cooperatives,” it said.
FTUSA
remains the dominant player in the U.S. in affixing a label to products as a
signal to socially conscious consumers that the producers of coffee and other
products grown in developing countries are being paid a fair price. Farmers get
a $1.40 per pound “floor price” — a minimum maintained even if commodity
markets go lower; a 20-cents-per-pound “social premium,” which pays for
communal benefits such as health clinics or schools, and an extra 30 cent
premium if the coffee is organic.
FTUSA
President and CEO Paul Rice said expanding the market for fair trade products
will help all farmers. He cited the case of an estate in Brazil that recently
began using the fair trade label on coffee it sells to the Whole Foods chain
for its Allegro brand. The Fair trade coffee that carries the “social premium”
of 20 cents a pound could now go both to the estate and to small farmers that
also provide coffee for Allegro.
Workers
on the estate voted to put the roughly $15,000 they earned from the premium
toward eye exams and glasses for those among their number who needed them.
“The
notion that co-ops should have exclusive access to our markets is just
wrongheaded from a marketing perspective,” Rice said.
Rodney
North, spokesman for Equal Exchange, was not impressed with the Allegro
example. He argued that new sales of that brand to “committed Fair Trade
shoppers” merely would take market share away from the co-ops where their
previous coffee was coming from.
The fair trade movement started
about a quarter century ago as a way to boost the fortunes of poor farmers in
developing countries by getting them better prices for the crops they produce.
While coffee has been dominant in a market that saw $1.3 billion of fair trade
product sales in the United States in 2010, the field has grown to include
cocoa, bananas and other crops.
At Green Mountain Coffee Roasters,
officials said they want to continue to support the small farmer cooperatives
that have formed the backbone of the fair trade movement to date, as well as
see whether Fair Trade USA can expand the concept to encompass a broader swath
of the coffee supply chain.
Ed Canty, a certified coffee buyer
for Green Mountain who travels extensively in coffee producing countries, said
what has worked for the farmers who belong to cooperatives should have a
similar effect of improving the lives of farmworkers on coffee plantations.
“Why can’t these workers, who are
some of the poorest of the poor, in some of these estates be involved as well?”
he asked in an interview Monday from the company’s headquarters in Waterbury.
As it announced new policies on a
pilot basis last fall, Fair Trade USA split from an international umbrella
organization, Fairtrade International. The changes prompted Equal Exchange,
which also imports chocolate, tea and bananas on a fair-trade basis, to split
from Fair Trade USA and push for other companies, including Green Mountain, to
do the same.
Equal Exchange praised Green
Mountain for its past work with the farmer cooperatives, but questioned whether
the company understood the possible ramifications of Fair Trade USA’s moves.
“We think that they don’t fully
grasp how these changes by Fair Trade USA could undo the good work that Green
Mountain has been supporting,” North said Monday.
North said Equal Exchange decided to
buy the newspaper ad after talks between its executives and Green Mountain’s
had not produced results.
“It was clear there was quite a gap
between us and we would need to do something more dramatic,” he said.
Canty said the similarities between
the factions in the fair trade movement still outweigh the differences, and
that his biggest worry is that the rift could cause harm to the principle of
fair trade overall.
“It’s really splitting hairs. I
think everybody involved in this discussion is doing good,” Canty said. “I’m
hoping the consumer sees that at the end of the day, but it’s a really hard
message.”