“Fair Trade is in crisis”, says Frans Van der Hoff, one of the co-founders of the Fair Trade system which was created in the late 1980’s, in a recent interview aired on CBC Radio in Canada. “We’re in a crisis but it’s a positive crisis. Because now you have to rethink and redo and make it [the system] a lot better.”
Van der Hoff, a Dutch professor, Catholic worker priest, and coffee farmer in Mexico, helped found Max Havelaar (a precursor to FLO International, the Fair Trade Labeling Organization) and UCIRI, a co-operative in Oaxaca, Mexico, which was the first producer co-operative to sell its coffee through the Fair Trade system. Last month, Dispatches interviewed Van der Hoff about his views on Fair Trade: why the movement got started, how it’s doing, and where it’s heading.
The interview couldn’t have come at a better time. Consumer confusion about the goals and impact of Fair Trade vs. other brands and certifications is at an all-time high. And that should come as no surprise. The certifying agencies (FLO International and Transfair USA) have watered down the purpose and integrity of the movement, aiming for dollars over mission, breadth over depth, as they lower standards to increase the number of products available on the shelves (see the latest interview proclaiming the “marriage” between Transfair and Starbucks on You Tube.)
Somewhere along the line, the certifiers began marketing Fair Trade as a poverty alleviation strategy, rather than an economic transformation model as it was originally intended. Alleviation means, “to lessen (pain, for example); to make more bearable.” Fair Trade was actually created to provide producers with a basic level of security, a social net to raise people out of abject conditions so that they would have the ability to approach their situations with more complex strategies, not to alleviate, but to change their economic conditions. The original founders of Fair Trade knew that economic conditions don’t change by extending charity. They understood the far more impactful goal of supporting farmer organizations so that together, the farmers can tackle the myriad issues which will enable them to create better conditions for themselves. Organized farmers build economic and political power, create social programs, lobby governments, enlist the collaboration of others by building solidarity networks. This is the true power (and potential) of Fair Trade.
How refreshing to hear one of the founders, and respected leaders of the movement, speak to these issues. In this ten minute interview, conducted by Dispatches, Van der Hoff offers his opinions on the division in the Fair Trade community and some of the misperceptions that the public has – or has been told – about the purpose and role of Fair Trade. We encourage you to listen to the full ten minute interview. The following are a few highlights we’d like to share:
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The difference Fair Trade makes:
“The difference is not so much economic… Because when we established Fair Trade in 1988, we put forward as such that the free market doesn’t work and we put a rule that the coffee has to be bought under conditions of the minimum price of survival… so there is a minimum price. When the market goes below it, you don’t go with them. That creates a kind of security for people…”
“… [the price is] still not a big deal but the [farmers] got out of the misery situation so that they could plant and as an organization we could do a lot… transportation, health care, education programs, housing programs… It all came possible because of being organized and having the security that your coffee could be sold under decent conditions.”
Being organized has had a great, large effect on “the infrastructure of the co-op but also the political lobbying that people were doing. As soon as you have a body of 3000 farmers and you get on the street, the government starts listening.” He goes on to say that in his mind, political empowerment is one of the most important aspects of Fair Trade.
- The entry of big corporations into the system: The interviewer asks Van der Hoff how he feels about the entry of Nestle, Walmart, and Starbucks into the Fair Trade system. Van der Hoff responds, “Miserable.”
“Fair Trade is established by small farmers. But they [the certifiers] forgot the basic goal of providing new channels and a new possibility and new markets for small farmers letting in the big shots … they were interested in having more and more and more margins. Starbucks got in. Nestle got in. Sarah Lee got in. We are yelling from the fields that they shouldn’t be in…”
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The need to introduce democracy to the market economy so as not to favor corporations:
“Production means have to be in the hands of the people who work for it, and work in it… To buy is to vote. To buy is to vote for what kind of world that you want.”
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If Fair Trade is NOT a poverty alleviation strategy, what is its purpose? “Getting a more democratic system into the market can build upon a world where everyone can live [well]. To alleviate poverty, I never said it, because I hate it, because it’s a world upside down. First you produce poverty and then the north all of a sudden says we will alleviate what we have produced. No, that doesn’t work. No, you have to go to the system which is producing poverty and create a quite different system… It’s an endeavor to correct the charity approach of Fair Trade which we hate. I buy so that the poor bugger can have a better deal. It’s ridiculous and that we don’t want…”
We encourage you to listen to the full (10 minute) interview here. We share Franz Van der Hoff’s optimism that with well-informed, engaged, and committed consumers and activists, “…we can correct the mistakes they’ve made letting corporations into the Fair Trade system” and by watering down the original model which aims to transform our trade models, our ways of doing business, our relationships, and ultimately our food system.
We’d love to hear your views on these provocative topics!
HI Phyllis,
Wow what a wonderful surprise today to see your post on Francisco Vanderhoff Boersma and his views about the crisis of fair trade.
Why I say a wonderful surprise is because just today on the other side of the world, I have been reading and posting a blog about Francisco’s latest work in the Journal of Business Ethics: “The Urgency and Necessity of a Different Type of Market: The Perspective of Producers Organized within the Fair Trade Market”.
After reading his work and now hearing the expansion of his thinking and his latest ideas ‘in real life’ so to speak is just an amazing piece of fair trade serendipity.
In both the article and this great interview, he presents some real challenges to the fair trade ‘establishment’, particularly in terms of the negative impacts of its current focus on poverty reduction/alleviation and the need for more emphasis on building and maintaining an authentic alternative democratic trading system. He also makes a compelling case for much higher levels of producer participation and influence into the current and future incarnations of the ‘fair trade project’!
If you get a chance it would be great to hear your response to his latest article. (http://www.otherdiscovery.com)
I am off now to explore more about what he was saying in the interview about UCIRI developing a new ‘producer developed and controlled’ fair trade label!
Thanks again, you have made my month!!
Kind Regards
Scott
I am not surprised by the crisis. The 5 years that I worked on Fair Trade and related issues, I realised that the major problems which Fair Trade today can be summed up as under
1. Unduly large amounts spent on the establishment costs of Intermediate Marketing Organisations . Some of these IMOs have been part of FT movement for 3-4 decades, attained scales, have become sustainable but still want the crutches of Fair Trade premium in perpetuality. They are big in FT arena , but can not muster courage to compete in the open market despite all the capacity building. The net result is that new organisations find it difficult to join Fair Trade bandwagon and are deprived of the benefits because of the well entrenched players who thrive on the “long-term relationship” platform.
2. Failure to find and estbalish new markets (specially domestic or regional) . It is possible to promote fair trade big-time in large/prosperous countries like India,Indonesia, Chiina, Malaysia, Korea and Brasil. and in my experience donor agencies are keen to support such initiatives. What one needs is someone who thinks big in terms of impact, not alleviating pverty but chaning system.
3. Failure to effectively combine with Consumer organisations and explore the opportunities to exchange idea and collaborate. I remember that when I was a part of Fair Trade Advocacy Committee, our interests rarely matched with those of Consumer bodies. This result in “Lack of Economies of scale”, thereby making FT goods expensive.
4. Failure to look beyond the obvious. Fair Trade movement has not seriously ventured into “services” sector, which drives economies in many countries. Neither the young generation is invited to support Fair Trade nor does the movement have made new proposition that can attract new people
The movement has little future if corrective steps are not taken as soon as possible. Will the movement do introspection?
Arun Raste
This is my all time favorite post on this blog.
Seeing the corporate cooptation of every meaningful grassroots movement (organic food, feminism, environmentalism, fair trade) can be a little depressing sometimes.
I’m very excited to see what happens with this new seal that he’s talking about. Anything that involves the farmers more is a step in the right direction.
How can the new seal and the new fair trade protect itself against cooptation?
Anyone have any ideas about that?
I’d be interested in knowing how the marketing of this proposed producer-led Fairtrade 2.0 concept would work.
For me the only answer is inverted trading (ie people of good-will prepaying for products in the process bypassing the majority of the costs of the supply chain) but I seem to be the only person that thinks that would work!
Wow is right, clarity amongst all the froth and fog and not before time. But Fair Trade is alive and well at the World Fair Trade Organization which is both the voice of authentic Fair Trade and the change-agent for market transformation driven by producers, artisans, diggers, farmers, growers, manufacturers, knitters, weavers, pioneers, innovators, entrepreneurs all. Marketing isn’t just about money, it’s about clarity, focus and engagement. Media isn’t just about money, it’s about the collective voice and energy of millions of people. Mechanisms exist. Resources are available. Change is possible.
I’m delighted to see that thoughtful discussion is reborn here on such urgent issues for both social justice, and Fair Trade. While there is a lot to say about the specific issues raised, I wish to encourage interested parties to create a deliberate and effective forum for addressing these issues. I’ve become aware of much serious concern on many of these issues, but little time and opportunity actually discussing and resolving them. If we don’t, we risk becoming much less impactful for social justice, and much less relevant ourselves.
At Fair Trade Resource Network, where I work, we would like to be a major part of, or even facilitate, such a forum if we had capacity. In the short term, we suggest that higher-capacity Fair Trade nonprofits and businesses, or the Fair Trade Futures Conference, lead such an important effort.
Wouldn’t it be incredible to be part of a system and movement even more effective for social justice?
This is a great post and the comments are challenging, inspiring and just what I would love to see discussed at the Fair Trade Futures conference mentioned by Jeff from Fair Trade Resource Network. It’s happening in Boston, Sept 10 – 12 and you can find more information and sign up http://fairtradeconference.ning.com/
Arun Raste for fair trade movement’s president!!
“They are big in FT arena, but can not muster courage to compete in the open market despite all the capacity building. The net result is that new organisations find it difficult to join Fair Trade bandwagon and are deprived of the benefits because of the well entrenched players who thrive on the “long-term relationship” platform.”
You are so D$$$$D right. Too many traditional fair trade organisations are striving to become the fair trade monopolists. How’s that for fair trade?
I was just wandering if you have to pay to be a fairtrade farmer, if yes how much
Here you go Rahim, the people to ask…
Link to the Fairtrade Labeling Organisation contact page http://www.fairtrade.net/contact-us.0.html
Link to the World Fair Trade Organization contact page
http://www.wfto.com/index.php?option=com_contact&task=view&contact_id=2
Articulate and cogent. Thanks for posting.
Brands are being replaced by communities of belief with stories to tell
The ‘consumer’ is dead. The rise of fair trade, renewable energies and the carbon economy is building a new relationship that is impacting all components of the supply chain and every purchase decision – engaging us ever more deeply in all of our trades and transactions.
We are evolving beyond conscious consumers into investors.
The relationship we have with a product is no longer a matter of value and preference and price. We ask questions, not of the product but of its provider, we need to know the business strategy behind the label and the social and environmental impact of our choice. The quality of a product is now measured not just by design and flavour but by the access it provides me for dealing with issues like economic and environmental degradation, a safe, fair and sustainable global economy and, increasingly, climate change.
I am no longer free to chose blindly from imagery and price.
I am inextricably, profoundly engaged in product, in a way I had never understood. World poverty is my poverty, global warming is my global warming, rainforest degradation is my degradation and my money, spent on my products and services, is what is creating my world. If I want to change my world I have to change my buying habits, I have to invest my money in solutions.
Consumers are turning into investors, they are asking “what’s the story?”. In some sectors, like fair trade, this change is actually a transformation. People are investing directly into people who are, in return, delivering a better product, inviting deeper participation and greater investment. The longer it goes on the better and stronger it gets. Immense loyalty is the result.
Loyalty is viral, it builds new communities of belief. These communities of belief are replacing brands, they are the opposite of brands; they are increasingly transparent, accountable and they demonstrate respect for each and every stakeholder. My belief is infectious, and Our belief is all it takes to change the world. Global transformation can be delivered through a shift in values, it is much easier than we think.
Conventional consumer businesses cannot compete with investor businesses and nor should they try. What conventional business must do, and do fast, is to discover its own relevance in a world where people are looking to find their own.
Relevance is no longer just a matter of why you exist and who you exist for, its a matter your right to exist. If you are not part of the solution, you are the issue and you are irrelevant to me.