Big, wealthy companies exploit small producers in poorer countries—isn't that how global trade works? Not according to the international fair trade movement. Instead of being exploitive, they believe, trade between highly developed and less developed countries can benefit both: high-quality products for consumers and a sustainable living for producers. This section examines fair trade in depth so you can make smart buying decisions—another example of how voting with your wallet can make a real difference.
Fair trade helps support workers and sustainable practices in developing countries. Instead of buying massive quantities of cheaply produced items at rock-bottom prices, fair-trade importers pay attention to the lives and working conditions of the people who produce the goods they buy, process, and resell, and they typically buy relatively small quantities. For example, such an importer will do business with a farm or cooperative that uses sustainable practices and pays employees a living wage.
A living wage is a pay rate that lets workers meet their families' basic needs—housing, food, clothing, health care, and so on—in the local community. Because these things cost different amounts in different places, the rate varies, too.
The movement focuses on social, economic, and environmental development. Here are some of its governing principles:
Reasonable working conditions. Fair-trade farms and cooperatives don't exploit workers. They provide safe working conditions and living wages, and don't use child labor.
Fair prices. Instead of focusing only on the bottom line—trying to maximize profit by paying the least they can get away with—fair-trade importers agree to pay local companies prices that cover the cost of sustainable practices (see the next bullet) and living wages for workers.
Sustainable methods. Producers of fair-trade items have to make those goods in a sustainable way. For example, farmers have to minimize or eliminate certain pesticides and use organic fertilizers.
Democratic practices. To become fair-trade certified (as explained in a moment), producers can't discriminate based on race, sex, ethnicity, religion, political views, and so on. Cooperatives need to have democratic structures and consist mainly of small producers who make or grow the products themselves.
Local investment. Companies pay a premium that local producers and co-ops have to use to promote social and economic development that'll benefit their workers.
Transparency. Everyone in the supply chain—producers, importers, processors (such as coffee roasters)—has to prove that they comply with fair-trade principles by letting people outside the organization scrutinize the group's agreements and practices. In other words, they have to be accountable for their practices. Transparency is essential because it lets consumers know that the products they're buying really are fairly traded.
Fortunately, you don't have to personally check up on companies and producers to make sure they're putting these principles to work. That's where the Fairtrade Labelling Organizations International (FLO) steps in. FLO is a partnership of 24 organizations that develops and applies fair-trade standards to make sure producers and importers adhere to them. So when you buy FLO-certified products, you know you're supporting fair trade.
In the U.S., the FLO member that approves fair-trade products is TransFair USA (www.transfairusa.org). In the U.K., it's the Fairtrade Foundation (www.fairtrade.org.uk), and in Canada, it's TransFair Canada (www.transfair.ca). Each of these websites has a section that tells you where you can buy certified products.
FLO certifies an ever-growing range of goods. Look for fair-trade certification when you're shopping for:
Bananas
Cocoa
Coffee and tea
When you're shopping for coffee, look for beans that are both fair-trade and shade grown. Many coffee plantations cut down all their trees to make room for coffee bushes—destroying the natural habitat of local critters and migratory birds. Shade-grown coffee protects natural habitats because the coffee comes from bushes grown in a forest setting, under trees that are part of the region's ecosystem. One study conducted on Mexican coffee plantations identified over 140 species of birds on shade-grown coffee plantations; on traditional coffee plantations, the researchers found no more than six bird species. For more information on shade-grown coffee, visit the Northwest Shade Coffee Campaign's site at http://shadecoffee.org.
Flowers
Fresh fruit and fruit juices
Herbs, spices, and sugar
Honey
Rice and other grains
Wine
To see the items FLO certifies, visit its Products page at www.fairtrade.net/products.html.
FLO also certifies composite products, which are made of several different things (as opposed to a product like coffee). An example is a chocolate bar, which contains cocoa, sugar, and so on. Depending on where the candy company gets these ingredients, some may be fair trade and others may not. To receive FLO certification, composite products have to meet these standards:
Liquid items have to contain at least 50% fair-trade ingredients by volume.
For all other composite products, the significant ingredient (such as cocoa in chocolate) has to be FLO certified and account for at least 20% of the product's weight.
Fair-trade goods aren't limited to just agricultural products. For example, Ten Thousand Villages, which has a website (www.tenthousandvillages.com) and lots of bricks-and-mortar stores, sells fairly traded jewelry, home dècor, and gifts.
Fair trade is a great idea that's gaining international support, but it has its critics. Here are some of the issues they've raised:
Fair trade distorts prices by ignoring market principles. As you learned in economics class, markets are controlled by a simple set of rules: When demand is high and supply low, prices rise; when demand is low and supply high, prices fall. But fair trade makes supply and demand take a back seat to its ideals of sustainability and living wages. Under normal circumstances, when there's an oversupply of a commodity such as coffee, the price goes down. But if fair-trade importers agree to buy coffee at a certain minimum price, that price correction doesn't happen for fair-trade coffee producers. That can cause prices to plummet for non-fair-trade producers, hurting their livelihoods.
Some fair trade isn't all that fair. Critics say some corporations care about fair trade just because of the public-relations boost it gives them. They charge that such large companies prefer to deal with big farms that mass-produce flowers, coffee, and other crops rather than smaller farms and cooperatives—which means they're buying from farms that are more interested in owners' profits than sustainability and workers' wellbeing. Also, for some of the large corporations that have fair-trade certification, fairly traded goods account for only a tiny percentage of that company's products. Then again, the fact that big companies are interested in fair-trade certification helps the movement and improves the lives of those who work on plantations.
Some retailers dupe people who want to buy fair-trade products. Consumers know that fairly traded products cost more, and many are willing to pay to support sustainable farmers and their families. But The Economist magazine has alleged that some retailers overcharge for fair-trade products—in some cases, a measly 10% of the extra amount you pay for a fair-trade product may go to help those who produced it (the other 90% stays in the retailer's pocket).
Fair trade doesn't go far enough. Some argue that the only way to make real strides against poverty in less developed countries is global policy reform, so that international trade rules are fair across the board. Others counter that supporting micro-enterprises makes a real difference peoples' lives now, whereas reforming trade policies will take time.
So when is fair trade worth the extra cost—and when is it little more than a gimmick or cynical marketing ploy by companies trying to get money from socially and environmentally conscious consumers? The only way to answer that is to do your research before you buy:
Is the company FLO certified? Check the website of your country's FLO member organization (What Is Fair Trade?) to find out.
What percentage of fairly traded goods does the company sell? Visit the company's website to see how committed it is to the movement.
Fair-trade goods generally cost more, but for many people, knowing that their purchases support a fairer, greener world is definitely worth a few dollars more.
The National Geographic Society's Green Guide offers a Coffee Label Decoder that explains some of the different labels you'll find on coffee—including Fair Trade Certified, USDA Organic, Rainforest Alliance Certified, and Bird Friendly—along with a list of recommended brands. Check it out at http://tinyurl.com/bz2ood.