Fair trade products always seem like the wisest purchasing option, as the term is supposed to confirm fair treatment of everyone and everything involved in the process of a product from soil to the hands of a consumer. Fair trade labels sound good in theory, as they signify a system that promotes safe and healthy working conditions, protects the environment, and empowers communities to build strong small businesses.
When you buy fair-trade products, you are essentially paying a farmer enough to cover the cost of growing their crops or the market value for their goods, whichever is higher. There is also a premium of around $0.20 for investing in improving production. However fair trade is not always as effective as it can be for reducing poverty and helping farmers, and many companies are not only turning to fair trade, but are doing more to be sustainable in their supply chains, as FLO and Fair-Trade USA aren’t as beneficial as it came be for the poorest of the poor farmers.
A study conducted by researchers at Harvard, the University of Wisconsin, and the University of California school system, found that fair-trade coffee has small to negligible effects on coffee growers, especially the most poverty stricken. The fair-trade system is not designed in a way to positively impact coffee growers specifically, which is the general assumption its name suggests.
The study actually found that fair-trade coffee is the least effective means in reducing poverty in developing countries, something that coffee lovers might not know, but absolutely should. As Fair-trade and the organizations such as FLO and Fair-Trade USA are being scrutinized, many companies are going beyond fair-trade, as today it’s about a complete sustainable business plan.
Nothing is as fair as it seems.
When working with FLO and Fair-Trade USA, only certain types of growers can qualify to be certified as a Fair Trade laborer. Typically they have to be small growers who do not rely on permanent hired labor and being to democratically run cooperatives.
This means that private farmers and multinational companies like Kraft or Nestle, who both grow their own coffee, cannot be certified as Fair Trade coffee, even if they pay producers well, and help create environmentally sustainable and organic products. Thus, many companies cannot be certified, even if their practices match the criteria and are sustainable.
Another flaw is FLO’s inability to alter the circumstances of the poorest of the poor farmers in the coffee farming industry. The primary focus and beneficiary is the small farmer, who in turn, is defined as a small landowner. The poorest farmer is not the small farmer, but yet those who do not have the resources to own land and thus are not a part of the cooperative. The help that is suppose to reach all farmers is not reaching them.
Quality isn’t always better.
Many retailers believe that neither Fair-trade Labeling Organizations International nor Fair Trade USA, have sufficient data showing positive economic impact on growers. The Fair Trade USA is flawed, as it limits both its market potential and the benefits it provides growers and workers. The quality of the coffee, and other products, under Fair-Trade, is uneven.
For example, commodity coffee is broken in grades, and within each grade the coffee is standardized. Meaning beans from one batch are assumed to be identical to those in another batch. With specialty coffee, because it is seen as a higher grade, it commands higher prices. The quality of the coffee is uneven, as farmers will sell their less quality coffee to the fair trade because they get a standard price with the price floor, and will sell their higher quality at market price because it will be priced higher than Fair Trade.
The chances thus increase that the Fair Trade coffee will be of consistently lower quality. Thus, even though it is trying to make the system more fair for everyone, the consumer then is not getting the quality promised. Thus, because of this and many reasons which are flawed with Fair-Trade associations alone, companies are going beyond fair trade to promote and make sure they are sustainable and promoting the well being of everyone, from the farmers, to the consumers.
Going Beyond Fair-Trade
Thus, Fair Trade USA and working with the organization is not enough for many companies nowadays. Those such as, Starbucks, Peet’s, and Green Mountain Coffee Roasters all report a push from consumers for more socially responsible business practices. They have sought other solutions besides offering Fair Trade coffee. Starbucks has put into place a C.A.F.E. Practice, which is a program that defines socially responsible business guidelines for their buyers. Also, Peet’s, is working with TechnoServe, an organization working to improve the business practices of farmers in developing counties.
Furthermore, Starbucks is taking more action to a more sustainable business plan. The company has adopted sustainable standards which have helped positively impact millions of workers and improve long term environmental and social conditions.
Many companies are doing more for farmers and the environment than being certified as Fair Trade, as the organizations, FLO and Fair-Trade USA, aren’t necessarily always as fair as it can be and doesn’t reach ever farmer who needs help. Companies are realizing that they need to do more in their supply chain and that there is a lot more which can be done to be more sustainable. Many companies are realizing it’s not just about the stamp on their products which let consumers know its fair-trade. Nowadays, it’s about integrating sustainability into their supply chains.
