A Bit of Context on the Fair Trade Kerfuffle

There has been a flurry of media attention to the pending break-up between the main US certifier of fair trade coffee, Fair Trade USA, and the international umbrella organization, the Fairtrade Labeling Organization (FLO). The two organizations issued a joint press release in September, announcing that Fair Trade USA would go its own way as of the end of the year.

The organizational split reflects a long-running debate over the meaning of fair trade and whether it should be thought of as a market – all about supply chain management as one expert interviewed by NPR put it –  or as a movement that emphasizes the relationship between consumers and producers. Although several issues reportedly contributed, the key issue behind the split was Fair Trade USA’s decision to begin allowing certification of coffee plantations, as well as smallholders represented by democratically-organized producer organizations.

The movement believers want to keep the focus on smallholders, while those coming from a market-oriented perspective are looking for ways to mainstream fair trade products to scale up the impact. The focus is on coffee because it is the most important fair trade product, accounting for a third of certified producer organizations and two-thirds of certified products sold in the United States in 2010. But there are a number of other products eligible for fair trade certification and, guess what; some of them are primarily plantation–based! According to the most recent monitoring and evaluation report from FLO, there are nearly 200 certified organizations that are not smallholder-based, compared to 500 that are, and they mostly produce flowers and tea in East Africa. So pragmatism has trumped principle in some cases in the effort to spread the benefits of fair trade; is coffee (or cocoa) so different?

Another concern about the split is that it will create confusion among consumers and, perhaps, depress sales. But many companies already put fair trade claims on their coffee or chocolate without seeking certification or using the trademark on their label. There is also shade-grown coffee or, more specifically, bird-friendly or rain forest supporting coffee. There is endangered species chocolate with endearing pictures of animals on the label. Do we know what consumers really want? Or whether very many of those that buy fair trade certified products actually know what that really means? Finding ways to provide consumers with more and better information is already a challenge for fair trade.

So, yes, the divergence in approaches to fair trade certification could add to consumer confusion, but it also has the potential to expand consumer awareness and spread the benefits of their empathy to many more poor people. These are all issues that I’ll be exploring in more detail over the coming year so stay tuned and let me know what you think.