The following post is offered by Nicholas Reid, Sales Representative of the Natural Foods Department at Equal Exchange. His original comments were published in response to a post on GreenLAGirl’s blog about the Business Week article, “Is Fair Trade Becoming ‘Fair Trade Lite’?”.
At Equal Exchange we feel strongly that small-scale sustainable farming is the most effective way to feed the planet, care for the environment, and sustain healthy and vibrant communities and businesses. We believe that small farmer co-operatives provide a model for participatory decision-making, local control, and economic development that is desperately needed to fix a broken food system and an ailing planet.
In this blog, we have tried to make our case by highlighting inspiring stories from our farmer co-op partners and referencing articles written about the importance of agroecology, organic farming, and consumer and farmer movements that are trying to make changes to agricultural and trade policies that serve no one but large scale agribusiness. We have deliberately tried not to focus too much on the debate around plantations, or the competition between different coffee roasters. Nevertheless, I wanted to share Nick’s observations as I thought he did a great job of highlighting some of the history of plantations and the reasons why we choose to focus our work, and continue to build strong relationships, with small farmer organizations in the Fair Trade system.
Fair Trade as a Tool For Transformation: Can plantations play that role?
by Nicholas Reid
For years now, folks have been questioning whether the Fair Trade certifiers should have allowed plantations into a system which was founded by and for small farmer co-operatives. One of the arguments put forth to justify the entry of plantations into the system is that there are many products (such as bananas and tea) which are primarily produced by plantations and therefore are not possible to source from small farmer co-operatives. This is a false premise. The majority of bananas and tea ARE produced by small farmers. More importantly, by allowing plantations into the Fair Trade system, the certifiers are ensuring that products produced by small farmer co-operatives will never thrive in the Fair Trade system.
I would buy the argument that the majority of the world’s tea, bananas and cocoa for export are grown by plantations and large-scale agriculture. But seriously, Fair Trade exists to support small farmers because plantations dominate banana and tea production for export. It aims to create the systems that would allow small farmers to benefit from exporting those products.
Allowing plantations into the Fair Trade system is a complete departure from the principles upon which Fair Trade was created. More importantly, it is also a betrayal of the farmers who built the system and a continuation of the marginalization of small farmers in the most impoverished countries in the world. Fair Trade was created to support organized small-scale producers and connect them to export markets. It was a response to the failure of plantation economies, and development policies designed around centralized ownership and production, to affect transformative change or economic growth that empowers and benefits people. Plantation-based Fair Trade is a slightly less gruesome extension of colonialism and slavery, and a system that for half a millennium has served only to increase global inequality.
Plantation Fair Trade does not offer a viable economic alternative to global poverty, exploitation and marginalization; it strengthens the very system that caused it. Economic history has been a stream of “slight improvements”; colonial powers invaded the “south”, appropriated the land and resources, enslaved or murdered most of the population and marginalized the rest to the least productive lands. The end of political colonialism saw European plantation owners, regional despots, “princes” and “rajas”, who thrived under colonialism by adopting the disastrous plantation model, quickly fill the gap of colonial magistrates and virrey. Slavery was replaced by share-cropping and “slavery lite”. Colonial interests were replaced by American and British business interests, and then transnational business interests like Chiquita and Cargill; all of whom continue to rely on the plantation model to extract resources and “produce” profits; with the added benefit of decreasing production for local consumption, making laborers more reliant on food imports; graciously provided by Cargill.
Without the Fair Trade system to provide credit and access to export markets, there is no chance a small farmer with a few acres dedicated to subsistence agriculture and a small plot of bananas could compete with Chiquita, its $4.6 billion in annual revenue, and gargantuan banana plantations. In the case of bananas, 10% of banana production is intended for export (the so called “dessert bananas”), as opposed to their starchier cousins, plantains, which are a dietary staple grown by millions of small farmers across the southern hemisphere. (According to the recent book: Banana Wars: Power, Production and History in the Americas, edited by Steve Striffler and Mark Moberg.) Bananas could be a viable and potentially lucrative and empowering market for small farmers, but allowing plantations into the Fair Trade system has marginalized small banana producers even further and ensures that they will never be successful.
Even the United States has failed to rectify the destruction of its slave/plantation economy through slight improvements. Starting with post-Emancipation Proclamation share-cropping, the advent of the “minimum wage”, the civil rights movement and then affirmative action, improvements (similar to what plantation Fair Trade would represent) to the current labor model have not addressed, corrected or righted the destruction of the colonial-slave model. Are African-Americans better off today than they were in the early 1800’s? Yes. But that leaves much; everything, in fact; to be desired: Statistics vary widely, so I won’t quote them but let’s just say that the number of African-American men in jail compared to college is not something this country should be proud of. The same goes for the percent of unemployed African American men compared to white Americans. Plantation Fair Trade ignores the failures of “more fair” plantation-based economies throughout history.
What did work in the United States was an economy based on small land-holders in the Northeast and a decreased reliance on mono-crop exports. Fair Trade attempts to strengthen those economies in developing countries; to invest in small land-holders, who have the opportunity to accrue transformative assets like land (in the United States it is estimated that 44% of the average American’s wealth is in land or housing) and are infinitely more self-reliant through local cooperation and subsistence production. On a national level, vibrant local economies decrease dependence on foreign aid, food imports, and investment, and strengthen the ability of governments to resist egregious trade agreements and concessions.
And why, you have to wonder, are plantations and Wal-Mart so eager to join the Fair Trade system (well… to gain access to the certification)? Is it the goodness of their hearts? Or in that case wouldn’t they just pay workers a fair wage because it’s the right thing to do? Is it to raise their production costs through higher wages? To lower their margins for the benefit of Honduran banana farmers? Or is it that the success and hard work of small-farmer co-operatives and alternative trade organizations has led corporations and plantations to see the potential for profits in the Fair Trade system. Plantations, corporations and venture capital are banging on the doors of Fair Trade; begging for more quantity, more products, bigger, better, more streamlined supply-chains and relaxed regulations, because they see an opportunity to increase margins within their existing supply chains (i.e. plantations). They see people paying more for a tiny stamp on a bag of coffee; they want a piece of it. The farmers who built Fair Trade certainly don’t want plantations in the system. Many consumers are confused by the debate; they trust the seal and the ideology for which it once stood.
Co-operative Fair Trade is about empowerment of people (both producers and consumers) and communities. It’s about food sovereignty for people, here and in developing countries. For over twenty years, farmer cooperatives in the Fair Trade system have organized as a social and political force with which to be reckoned. Communities, tied together through economic ownership, have defined their values and developed according to their own paths of economic development. They are asserting influence and fielding politicians. Women have been empowered through shared assets and accountability, and development projects. Children are attending schools. Communities are growing their own organic food and rehabilitating the land. They are tiny green patches in the scarred and barren landscape of a scorched earth policy; vibrant local economies that value people and their connection to the earth.
Plantations, even those with labor unions and fair wages, represent continued dependence on patriarchal land-owners, predatory capital markets, transnational corporations and developed countries. American consumers should not be duped into supporting plantations because they agree to pay their workers a “fair wage”, we should be investing in a viable alternative that doesn’t rely on cheap labor and minority ownership. Allowing plantations into Fair Trade threatens to reverse the gains of the alternative trade movement, strengthen the competitive advantage of plantations and agribusiness, and further marginalize and exploit small farmers.
Small Farmers. Big Change. 
*Applauds.* Very informative and thought-provoking. Thanks for this.
Hi Phyllis,
I interviewed the guys from Crop 2 Cup who import coffee from small Ugandan farmers for my podcast on marketing the social economy. When I asked them why they’re not Fair Trade certified they said it’s because the farmers they work with are too small and therefore certification isn’t cost effective for them.
What’s your comment on that?
Crop 2 Cup
http://www.croptocup.com/
My blog/podcast
http://www.consciousimages.org
Hi Robin,
Thanks for your question. I can’t actually recall what the certification fees are off-hand but certainly you could go to the FLO International (Fair Trade Labeling Organization) web-site, fairtrade.net, or call Transfair and ask someone there. It is true that the certification fees can place an additional burden on the coffee co-ops. Originally, as you probably know, this fee system didn’t exist. Without money coming into the system, certification of new co-ops was painfully slow. FLO was criticized for being a club that wouldn’t allow for the entry of new members. Certification fees were the response. The Fair Trade standards are rigorous and sending in monitors and inspectors does cost money. There has been talk of trying to find ways to merge organic certification with Fair Trade, even if only in certain criteria, to keep the costs down. I am also told that FLO has established a fund for those co-ops who would like to apply for certification but cannot afford the fees. Again, I don’t have any specific information, but I’m sure others out there can tell you more about this.
I don’t know the company or the farmers that you mention (and I did try to listen to your podcast, but couldn’t seem to access it), so I can’t speak to what or how they’re doing. In various of my blog entries, I’ve said that it’s my personal belief that supporting projects in farmer communities (providing of course that the need has been articulated by the community), can certainly be a positive step (with all the necessary caveats about HOW the project is planned and implemented), and that paying an above-market price will certainly be appreciated by any farmer. (And honestly, anyone who’s visited small-scale coffee farmers and seen first-hand the incredibly labor-intensive work that goes into growing high-quality coffee has to admit that even most of the highest prices being paid don’t seem enough.) Connections made and relationships established between roasters and farmers can also be a really human and poignant experience – often life changing.
The reason, however, that we choose to work with co-operatives is because we deeply believe that real structural change is needed – and at many levels – to balance the playing field, restore hope, and create strong communities where farmers have a choice to stay on their farms and thrive. I believe that Rodney North is planning to address your comment as well; and he has already written a series of reasons why we believe that co-operative structures provide one of the best opportunities for farmers to succeed, so I won’t go over any of that now. I’d just like to skip ahead and add that, and I’ve said it before, the power in many of these Fair Trade certified co-operatives with whom we work, is that by being organized the farmers have accomplished many things that individual farmers could never be able to do. These accomplishments may have nothing to do with coffee, or community projects… they have to do with building economic and political power… And only with that kind of power, can real change ever happen.
Thanks!
Phyllis
Wow, this is a powewrful post. I just stumbled across your blog and I’ll definitely be bookmarking it. We have some major concerns with cotton farming as well because of similar issues. I personally have no issues with large business and capitalism, however I believe that these businesses should seek to support not exploit the small farmer.
Josie,
You may know about these sources already, but I’d recommend the book “Travels of a T-shirt” and the International Labor Rights Forum, http://www.laborrights.org , as they offer information on the problem of forced child labor in the cotton farming outside the US.
Conversely, of course, non-organic cotton in the US is heavily dependent upon a host of toxic chemicals, but at least the labor conditions are much better than overseas. I’d be curious what your take on that industry is.
Incredibly insighful article. I’ve been grappling with the idea of allowing plantations into the Fair Trade system myself and this really articulated all my hesitations about the whole issue. I’ll be blogging about Fair Trade on change.org’s upcoming social networking blogging community and plan on touching on the subject and will definitely be referencing this article. Thanks for your thoughts Nicholas and sharing it with us Phyllis!
Great blog overall and great job, Equal Exchange.
In solidarity,
Zarah
Thanks Zarah,
Not sure why I just discovered your comment only now… Glad that Nick’s article was helpful in clarifying some of the issues. I’ll look forward to reading your posting on change.org… let us know when it’s up!
Phyllis
I am not sure what to think of your article because I think that it is impossible to import flowers from small farm co-ops as you are stating. I don’t know if fair trade should only use the AT model that you are speaking of. From the little that I know about the flower industry it is impossible to transport flowers in small bunches in the time that it needs to arrive to businesses that will sell the product and the sale of flowers is providing employment to many people who would otherwise not have access to sources of employment. I think Fair Trade sets a model for how that employment should be fair and allows for freedom of association on the farms for a democratic voice. In countries that are ruled by dictator regimes, the fact that a model of fair trade might survive, seems like a model of ‘alternative trade’ for these countries. I would be interested to know what you think?
Dear Richie;
Let me first say, I apologize for not responding sooner. I appreciate your taking the time to comment. Fair Trade flowers are a very complicated issue within a very complicated industry. The modern flower industry is one of the most over-looked follies in first-world consumption and one of the most contentious on the Fair Trade Register.
Before I address Fair Trade flowers, I think there is a common misperception of cooperatives as inherently small or inefficient. There are some astounding examples of very successful cooperatives that compete head-to-head with traditional corporations; the Mondragon Co-operative is the seventh largest “corporation” in Spain and runs that country’s third-largest retailer. The Associated Press is a co-operative, owned by its media outlets. Ace Hardware is a co-operative with over $3 billion in hard-line sales every year. “Cooperative” refers only to an ownership structure.
In that regard, it’s false to say that it would be impossible for a small farmer co-operative to export flowers; it might be inefficient and probably not viable, for small-farmers, or anyone for that matter, to export flowers in small batches, but co-operatives, in the alternative trade model, are designed to overcome those circumstances in any given agricultural sector. It’s impossible for a meaningful percentage (barring a few specialty growers) of small farmers to export coffee in small batches because importers want full containers and there are a plethora of large-scale plantations available to fill them. Co-operatives re-create the “economy of scale” required to compete in the global market. If an organization or community of small farmers were growing flowers, I have to believe they could form a co-operative business to export them. Likewise, there’s no reason to suggest that a group of laborers could not run a large-scale flower operation as a worker-owned co-operative.
Regardless of working conditions in the flower industry of the developing world, flowers are a seriously frivolous export with unimaginably destructive environmental consequences. (That is not to say that coffee is one of life’s necessities, but within the auspices of the alternative trade model, it offers its growers (small farmers) access to foreign capital to invest in local economies, income diversification strategies and technological development, without, in most cases, replacing subsistence agricultural production). Furthermore, many small farmer coffee growers were born on coffee plantations or in areas dominated by the coffee sector, and have few options to get into other areas of work.
For a very informative look into the Fair Trade flower industry, I would refer you to an article in The Guardian.
Fair Trade flowers have become an economy that seriously threatens local eco-systems by diverting water and polluting the land with harmful pesticides and fertilizers. Large-scale, mono-crop economies are inherently more environmentally-destructive than bio-diversified farms and localized production, but our health-conscious, consumer-driven interpretation of “organic” also reduces the pressure on, as the Guardian points out, mainly foreign-owned flower companies, to improve their environmental impact (many, if not most, consumers opt for Fair Trade because they are hesitant to “consume” pesticides and fertilizers, not because of the environmental impact of the product).
The tremendous growth of the flower industry in the developing world is creating population centers in fragile ecosystems centered on unsustainable production methods… of flowers. In this case, it means that the “social premium” which can only be invested in community projects (Fair Trade does not dictate any wages except the minimum wage of that country) serves as an investment in a community that is not self-sufficient or environmentally-sustainable; much like the densely-populated slums that spring up outside cities as the rural sector is driven to indigence, and its population seeks employment opportunities in urban centers.
This scenario, of unsustainable, large-scale production in fragile eco-systems, is all too familiar, as it is the case in the majority of the world’s agricultural production. However, it seems exponentially more illogical that developing countries like Kenya or Ecuador, are destroying their land, rivers and lakes, while hundreds of thousands of farmers are leaving their land and relocating their families, so that Americans and Europeans can give their loved ones roses on Valentine’s Day.
You do bring up a valid point in saying that Fair Trade flowers offer employment to people who might not otherwise find work; but in many cases those people are farmers, and like David Gikundi, are leaving their land because they are not receiving a fair price for their products, such as tea. (This is partially because the conventional market is centered on mass-production and plantations, and in turn the Fair Trade system is being built to serve those plantations).
I believe that Fair Trade should aim to create an economic model that supports those small farmers, pays them a price that allows them to stay on their land, and values the sustainability of production and survival in any given eco-system. As the populations around flower economies continue to boom, thanks in no small part to the services paid for by Fair Trade premiums, the sustainability of these regions declines; their self-sustainability declines, and the future economic outlook for farmers, workers and their native countries, becomes even bleaker.
Again, there is no doubt that Fair Trade has brought improvements to the working conditions in the flower industry, but it comes at a cost. In the long term, I think “First World” consumers need to consider, holistically, the environmental, economic and social impact of the products they buy, regardless of “improvements” to production. Off-shore drilling may decrease our dependence on Mid-East oil, but it does not represent a comprehensive solution to the energy crisis; if Americans continue to drive gas-guzzling SUV’s and resist fundamental steps to decrease oil consumption, we, like millions of ”flower workers” and developing nations, will find ourselves in the exact same position in the future.
Barring an investment in land ownership, labor movements, economic empowerment and human development and education, (and perhaps not even then, given clear alternatives) it does not seem worth it to me to continue, if not exacerbate, environmental destruction and population displacement in the developing world so that Americans can enjoy floral arrangements year-round. We consumers, may need to make sacrifices (like flowers), but they are nothing compared to abandoning your land, family and community in search of a livable wage; and certainly maintaining a safe and healthy environment for our children is worth it.
I recently interviewed a large multi-national that sources organic and FT certified bananas from small farmers in South America. The company representative said that as a MNC they are not permitted to source FT certificated products from large farms, but are required to source only from small producers. Is this correct?
Hi Andrea,
I think the person you interviewed might be confused. The Fair Trade Labelling Organization (FLO) does not differentiate between multi-national corporations, worker-owned co-operatives, or small independently owned businesses when applying the standards. As long as the purchaser is meeting the FLO requirements – mainly price paid to the grower – the organization is “blind” regarding the practices and values of the buyer.
As to the question of purchases from small farmers vs. plantations, FLO makes the distinctions by product categories. To date there are only a few products that may only be sourced from small farmers – coffee and cacao being the primary ones. Unfortunately, for small banana growers, FLO allows bananas to be sourced from both small growers and plantations. (Forcing a co-op of small producers to compete with the likes of Dole and Chiquta.) Recently, we have been hearing of concerns from labor organizations about worker abuses and intimidation on some of these plantations.
It’s a complex issue and I encourage you to keep delving into it. (There are a few posts on this site about bananas and plantations; most recently the article reprinted from Peaceworks Magazine by Steven Coats. Good luck with your research – I’d be curious to learn of your other findings.
Phyllis
Thanks Andrea and Phyllis;
Phyllis, you wrote, “The Fair Trade Labelling Organization (FLO) does not differentiate between multi-national corporations, worker-owned co-operatives, or small independently owned businesses when applying the standards. As long as the purchaser is meeting the FLO requirements – mainly price paid to the grower – the organization is “blind” regarding the practices and values of the buyer.”
That’s true, but brings up an interesting point- like maybe FLO should differentiate. To me that would be the difference between “Fair Trade” in it’s current state, and “alternative trade”, where it all began, or maybe “poverty alleviation” and “economic transformation”. Worker-owned cooperatives trading fairly with small-farmers (organized in cooperatives) and community-owned retailers, or even small-independent companies and retailers- is truly an alternative economic model- a new system of trade based on equality, respect and shared social/environmental values. To me, it’s a sustainable alternative to the current global economic model- dominated by multi-national corporations, environmental destruction, and unabashed greed.
MNC’s will always have the same goal (profit) in mind- not actual, substantive change (economic transformation); even if their actions do, in fact, increase the income of producers.
Just something to think about.
Nicholas