Fair Trade – what does it mean?

13 10 2010

Trade issues raise a lot of hackles – and they’re complex, global in scope, subject to capricious trade agreements and governmental intervention.  According to Oxfam, trade is robbing poor people of a proper living, and keeps them trapped in poverty because the rules controlling trade heavily favor the rich nations that set the rules.  Rich countries and powerful corporations have captured a disproportionate share of the benefits of trade, leaving developing countries and poor people worse off.  Oxfam is working to ensure that countries change the way they trade.

The fair trade movement is about creating a better world – one where economy works for the people, not against them.  Basically,  what we see as fair trade has concentrated its efforts on the producer:    It recognizes that small producers lack a voice to achieve the best price for their products, and it aims to bring relief to these small producers.

October is Fair Trade month –  the theme is Every Purchase Matters:   “Every purchase matters means taking an extra moment to think about the impact your purchases will have – on your own wellbeing, on the people who produce the products and on the environment. “  As I said in last week’s blog, that’s a great thing to think about for each and every purchase you make  –  for lots of reasons.

Did you know that on average conventional coffee farmers receive $0.02 from the sale of each latte you buy?    If that coffee were Fair Trade coffee, the farmers would receive $0.12.  That small increase saves lives. (1)

I bet you’ve seen the FairTrade Mark on products recently.  Ever wonder what it really meant?   I mean, you can’t change the world unless you understand how it works, right?

Fair Trade hopes to alleviate poverty  and end the exploitation of workers through the three stakeholders:

1.      Producers,  who are generally located in impoverished countries

2.      organizations that trade, support and certify the products and

3.      Customers  who  buy the products.  (Yes, we do have a role to play in this poverty alleviation movement.)  We need to vote with our wallets and shop with our conscience.

Fair trade also may include policies that honor the local natural environment involved in the production, as well as the promotion of people-to-people connections, fairness and sustainability.

How does the fair trade movement work?  Basically it boils down to:

  • Better prices:  paying workers a fair wage for their labor and to paying producers a guaranteed minimum price for their agricultural products or a fair price for their handicrafts or other products
  • Decent working conditions:  The producer group agrees to provide good working conditions, safety procedures and adequate health standards for all workers.  Both the buyer and the producer group agree to promote human rights, especially those of women, children and people with disabilities
  • Sustainable development: Producers also agree to use environmentally sound production methods.  Harmful agrochemicals and GMOs are prohibited in favor of environmentally sustainable farming methods, but fair trade certified goods are not required to be “organic” because sometimes organic certification acts as a barrier to markets so Fair Trade doesn’t require it.

So how do we know if a product is Fair Trade?  Well, one way is for the company to tell us so –  and companies more and more often are making that claim, often with an environmental veneer attached.   Fair Trade provides fertile ground for greenwashing.  What if you don’t happen to believe the company?

Bet you saw this one coming:  there are also Fair Trade certification organizations, and they are of two types:

  • For organizational evaluation:   The World Fair Trade Organization (formerly IFAT) and the Fair Trade Federation (FTF) evaluate organizations for their full commitment to fair trade principles (no matter what kind of product they sell). FTF member organizations will have the Federation’s logo on materials related to their business.

The Fair Trade movement has always had its critics, who have said it is just a mechanism by which consumers in the rich world can feel better about themselves.  “It is a movement based around the consumption patterns of the rich and not the needs of the poor.”  A senior fellow of the Cato Institute,  Brink Lindsey, refers to Fair Trade as a “well intentioned, interventionist scheme…doomed to end in failure.” (2)

One facet of the problem is exemplified by the large multinational company, Nestle, which introduced its Partners Blend coffee, containing  Fair Trade coffee.   Nestle’s advertising in launching this coffee suggested that all its products are Fair Trade, when only 0.02% of its global purchases comply with Fair Trade criteria. (3)  But some say that doing something should be supported, while others  have noticed that Partners Blend coffee is often twice the price of non-Fair Trade coffee in the market, when it can be found!  This high price discourages purchase.   This has helped Nestle win a global internet poll for the world’s “least responsible company” in January 2005. (4)

Doing justice to the criticism of fair trade would be too long for this post, but if you’re interested you can read about it by clicking here and here – and you can probably find much more on the internet.

At this time, the only products in the United States which can be certified Fair Trade by TransFair USA are coffee and tea, spices and herbs, cocoa and chocolate, fresh and dried fruits and vegetables (including soy), cotton, flowers, sugar, rice, nuts, honey, olives and olive oil, quinoa , vanilla and wine.  The only manufactured product (if you don’t count wine)  is “sportsballs.”

Because I’m interested in fabric and how Fair Trade fits into the fabric industry,  let’s look at Fair Trade cotton, which is no different from conventional cotton, except that the farmer at the bottom of the supply chain receives a guaranteed price for his cotton which covers the cost of production and a premium for community investment.

With regard to cotton, it’s important to recognize that Fair Trade cotton is not, by definition, required to be organic.  This is because Fair Trade aims to support the most marginalized farmers, those who cannot always afford to convert to organic farming or who lack the knowledge about organic agriculture. It can take years to convert a crop to organic, but this transition is something that many Fair Trade cotton farmers work towards as they earn more income through the Fair Trade minimum price. There is added incentive to convert as well since Fair Trade pays a higher price for organic cotton.

From the Fairtrade Foundation website:  “Fairtrade cotton offers a positive alternative to thousands of cotton farmers in West African and in countries as widespread as India, Senegal, Burkina Faso, Egypt and Peru. Fairtrade certification brings farmers the guarantee of a fair and stable price. They also get an extra payment – the Fairtrade premium – which they can spend on community development projects such as schools, health clinics and clean water.

The benefits from sales of Fairtrade certified cotton have allowed farmers in India to develop basic health insurance schemes for themselves and health awareness programes for their children. In Mali, farmers have been able to fund the building of storage units for cotton and grain, enabling them to store food all year round and better control the sales of their cotton over the seasons, bringing them a more consistent income.”

Remember,  you will not see a Fair Trade label on any textile product other than cotton since cotton is a commodity and the only fiber certified under Fair Trade certifications:  there is no such thing as Fair Trade certified  linen, hemp, sisal, jute, wool, cashmere,  or silk.

There is a new apparel and linen Fair Trade mark in the United States.  Fair Trade Certified ™ apparel is supposed to be farm-to-finish. The entire supply chain, including mills for ginning, spinning, weaving and dyeing, is audited for traceability and basic labor compliance under Fairtrade Labelling Organizations (FLO) standards.

During the summer of 2010, blank T-shirts, and men’s  polo shirts became Fair Trade Certified in the United States.   Plans are in place to expand the products available to include tote bags, aprons, women’s sweaters, knit baby clothes, women’s casual wear (e.g., hoodies, wrap tops, dresses, knit pants, camis, and tanks), plus men’s and women’s lingerie.

It is important to note that the Global Organic Textile Standard (GOTS) also guarantees fair working conditions and fair wages for workers in the supply chain.  GOTS also has the environmental component – requiring organic fibers, prohibiting use of toxic chemicals in the weaving and finishing of the fabrics, and requiring water treatment.  And GOTS can be applied to the finished product , such as apparel or bedlinens, and it extends even to packaging of the goods (prohibiting PVC plastics, for example).  And finally,  GOTS does encompass all natural fibers.

Another important note regarding Free Trade cotton:   the United States has a system of subsidizing cotton producers, and this flies in the face of everything Free Trade is trying to accomplish.  If you’re interested in these issues you can click here to read a recent Washington Post editorial about these subsidies, or just Google “US cotton subsidies and free trade”.

If you support the Fair Trade movement, click here for some action steps you can take to make it a reality.

(1) http://www.fairtradefederation.org/ht/d/sp/i/197/pid/197

(2) http://www.globalenvision.org/library/15/

(3) http://www.organicconsumers.org/fair-trade/nestle.cfm

(4) http://www.evb.ch/index.cfm?set_lang=2&page_id=3346


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