Fairtrade Standards: Challenging (channelling into?) the Mainstream

fairtrade-wordmapA couple of weeks ago, Professor of Marketing from the University of York’s Management School Bob Doherty gave a guest lecture at the School of Earth and Environment at Leeds. His presentation, entitled “Where Now for Fair Trade?” The History and Future of Fair Trade” traced the history of Fairtrade from the early inception in a Christian charity movement to its current firm position as a global network comprising of 25 Fairtrade organisations, official certification and labelling body and most widely recognized ethical label in the world (Fairtrade Foundation, 2013). In his talk, Professor Doherty touched upon a very important issue not many Fairtrade supporters are very willing to acknowledge or openly talk about – loosening and driving down of FT standards. By way of comparison, Prof. Doherty illustrated how the number of core fairtrade principles has been reducing over time with such crucial issues as long-term contracts, consumer education and sustainable production practices being gradually removed from the movement’s agenda. Intrigued by the presentation, I went online to do my own research on the changes and transformations that FT standards have gone through during the last years.

A visit on the official Fairtrade Foundation website1 yielded this declaration. Published in 2005 and amended in 2008, it outlines core standards and principles behind Fairtrade labelling of which there were five: a fair and stable price, provision of social premium, environmental responsibility, strengthening the position of small farmers in the world markets and promoting consumer-producer relationships. While the first two are quite self-explanatory, the other three demand some clarification. In the document, environmental standards are mainly about such problems as waste management, soil erosion and use of agrochemicals. Reinforcement of farmers’ position is to be achieved through provision of market knowledge to producers, creating specialized trading channels for FT produce, establishing and maintaining direct consumer-producer relationships. Finally, closer consumer-producer links are understood as better controlled and more transparent supply chains, as well as campaigns and initiatives to promote consumer awareness of and willingness to support fairtrade (Fairtrade Fortnight being the major event, I wrote about this year’s campaign here). So although such crucial issues as long-term contracts and pre-financing receive no mention in the document, transparent purchasing, producers’ access to market information and consumer education did hold prominent places on the FT agenda back in 2008.

But what principles are currently driving the global Fairtrade movement? Fairtrade International’s official website has an informative section detailing current FT standards with separate foci on small producer organisations, hired labour, contracts as well as trade standards. The latter include:

  • Pay a price to producers that aims to cover the costs of sustainable production: the Fairtrade Minimum Price.
  • Pay an additional sum that producers can invest in development: the Fairtrade Premium.
  • Partially pay in advance, when producers ask for it.
  • Sign contracts that allow for long-term planning and sustainable production practices.

fairtrade5At a glance it seems like pre-financing and long-term contracts are still in the focus of Fairtrade, but what does a closer examination expose? A deeper dig into the website yields the most up-to-date document outlining current Fairtrade trade standards from which it can be seen that, indeed, pre-financing still remains one of the core benefits FT producers are entitled to – regulations require fairtrade buyers to provide up to 60% of contract value upon producers’ request. The section on contract standards, however, neither contains any requirements on the length of contracts, nor explicitly mentions long-term consumer-producer relationships making it difficult to understand how exactly FT contracts “allow for long-term planning and sustainable production practices”. What is absolutely clear, though, is that one feels a hopeless air of neglect when it comes to Fairtrade’s addressing environmental and sustainability issues (to which I have not so long ago received a first-hand testament from a fairtrade banana producer from Ghana who talked about huge amounts of cosmetically imperfect bananas being rejected by retailers and going to waste on a regular basis – I wrote about it here). There is a list of prohibited materials – those not to be used by farmers when handling FT products – but issues such as soil erosion or waste management do not longer seem to appear on the FT agenda.

What stands behind the dilution of fairtrade standards – business interests and profit seeking or an attempt to make it easier for producers to get the certification (although the most important barrier – huge audit costs borne by producers – is the first issue to be addressed in such case) and enhance market penetration of fairtrade products is a matter of debate. Meanwhile, Fairtrade International continues to develop and introduce new initiatives whose reasoning and implications are causing both excitement and distress among FT commentators – I’ll talk about the most recent Fairtrade developments in my next post!

Notes

1. Although Fairtrade Foundation is an independent non-for-profit organisation operating in the UK, it is a member of Fairtrade International and relies on the same set of internationally agreed fairtrade standards.

References

Fairtrade Foundation (2013 September 3). Consumers favour Fairtrade as ethical label of choice. Retrieved April 15, 2014, from http://www.fairtrade.org.uk/press_office/press_releases_and_statements/september_2013/consumers_favour_fairtrade.aspx

 

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