Business & Policy Corporate Responsibility Is Fair Trade Floundering or Flourishing? By Katherine Martinko Senior Writer University of Toronto Katherine Martinko is a writer and expert in sustainable living. She holds a degree in English Literature and History from the University of Toronto. our editorial process Twitter Twitter Katherine Martinko Updated March 06, 2020 CC BY 4.0. juliamn123 (Wikimedia) Share Twitter Pinterest Email Business & Policy Corporate Responsibility Environmental Policy Economics Food Issues The ethical shopping label is facing new competition from companies opting to create their own certification programs. You probably know what the Fairtrade symbol looks like. It has a blue and yellow yin-yang, two halves separated by a black swoosh. It appears on coffee, tea, chocolate, bananas, dried fruit, and other tropical food products. For years, it has offered a mark of reassurance to shoppers that the product they're buying comes from farmers who have been paid fairly for their work. It has other implications, too, such as no children working on farms, better environmental stewardship, and, perhaps most notably, an annual premium paid to farming communities for investment in programs and infrastructure of their choice. But Fairtrade's heyday might be over, according to a recent Long Reads article. Writer Samanth Subramanian describes how companies have begun withdrawing from the Fairtrade program, which threatens its entire existence. He writes, "Companies are losing faith in labels such as Fairtrade – losing faith in their ability to secure the future of farming and the future of commodities that drive corporate profit, but also losing faith that these independent stamps of sustainability carry any value at all any more." It's not because companies are unconcerned about sustainability. If anything, the topic is hotter than ever and being able to prove that they're doing something about it matters tremendously. There is a general sense, though, that Fairtrade just doesn't cut it anymore, that it's not offering the kind of tangible benefits that make paying the minimum commodity prices and annual premiums worthwhile. Recent studies have found that the financial benefits don't trickle down to hired help and that some children can still be found laboring on West African cocoa farms. When Sainsbury's announced in 2017 that it would stop selling Fairtrade tea and replace with its own in-house certification called Fairly Traded, it was met with outrage; but as a representative explained, "We were paying these premiums, but it wasn’t clear where the money was going. Fairtrade isn’t good at keeping tabs on it. It wasn’t always going to medicines and schools and things like that, as we found through our own investigations." © Fairtrade In response, companies have developed their own in-house certification programs and labels. To name a few, Mondelez has Cocoa Life; Nestlé has Cocoa Plan; Starbucks has CAFE Practices; Barry Callebaut has Cocoa Horizons; Cargill has Cocoa Promises; McDonald's has McCafé Sustainability Improvement Program. Though they may be well-intentioned, Subramanian suggests that these in-house programs have serious shortcomings. He says, "In my conversations with Starbucks and Mondelēz, farmer welfare rarely came up. The tacit assumption seemed to be that if the companies help farmers improve their productivity, their lives will improve in tandem." Another questionable practice is that some in-house programs do not give premiums directly to communities to use as they wish. Funds must be approved for use by a committee appointed by the company, an arrangement that is uncomfortably reminiscent of colonial times. At the time of Sainsbury's announcement, Fairtrade Africa wrote in an open letter, "[This] model will bring about disempowerment. We are extremely concerned about the power and control that Sainsbury’s seeks to exert over us which actually feels reminiscent of colonial rule. We work for, OWN our product and OWN our premium. We see the proposed approach as an attempt to replace the autonomous role which Fairtrade brings and replace it with a model which no longer balances the power between producers and buyers." In-house certification screams conflict of interest, of course, and is indeed the argument that Subramanian ultimately makes in his compelling article. When a corporation is left to "mark its own homework" (think Volkswagen and Boeing), evidence of cheating abounds. And while companies may say they want greater 'flexibility' in contrast to Fairtrade's fairly rigid standards, Subramanian says that what they really want is greater control – "control over how commodities are priced, how to select or discard producers, how farmers farm, even how they live. This may look, for firms and even for consumers, like efficiency, but the effects can be dysfunctional." Nor is it a fair portrayal of how fair trade certification operates. It may seem rigid, but that's because it sets higher standards than the norm. This is precisely why it benefits farmers so much. When asked to comment, Fairtrade America's COO Bryan Lew told TreeHugger, "Fairtrade has never pretended it can solve global trading imbalances by itself, or that certification alone is the answer to the systemic poverty and other challenges in global supply chains. Fairtrade distributes more value back to farmers and workers, so they can get a fairer share of the benefits of global trade." It has also been suggested that flooding the marketplace with labels and logos, each one claiming its own slice of the ethical pie, will lead to fatigue among shoppers – a state that would benefit corporations. Once people start thinking that "any claim of sustainability is an improvement over no claim," they become susceptible to greenwashing. We live in increasingly uncertain times. The average age of farmers is getting older, with fewer young people joining the profession. Climate change threatens yields as never before, and it's believed that half of coffee-producing regions will be unworkable by 2050. In this context, Fairtrade is more important than ever, holding companies accountable to an external standard and empowering farming communities to make their own decisions. While it may not be perfect, the organization has demonstrated a willingness to change and adapt. It has recently decided that premiums exceeding $150,000 "must hire an external auditor to inspect the way it accounts for the money," and is offering its services as a consultancy to companies creating their own labels. I think it's too soon to suggest that Fairtrade is on its way out, but not too soon to say that it needs our help. Show your support by buying Fairtrade products, asking your retailers for them, and questioning companies about their own certification programs. As for Lew's opinion on how much fair trade may be struggling, he says it is "far from finished, as the millions of farmers, workers, companies and consumers who believe in making trade fair will testify. Fair trade will only be finished when fair and equitable trade becomes the norm and not the exception." Read the whole lengthy piece here.