Let’s write „Fair Trade” on it and make it more expensive…

…this is how it sometimes seems to me when I see Fair Trade products. Maybe you read Ly’s last post about Ben & Jerry’s and their effort of making their products part of Fair Trade. After having read her post, there were several questions I asked myself. This is why I decided to myself dig deeper in this subject.

Why is Fair Trade more expensive?

According to the British Fairtrade Foundation,

the costs of a Fairtrade product are more than the extra price paid to producers while the benefits of Fairtrade to producers are also far more than just this price difference.

This would mean Fair Trade products being more expensive is fair because the producers get more out of it.

But is it really FAIR for everyone?

Seems so. As the blog “Cacao for a cause” suggests in her post of December 1, 2011, Fairtrade does guarantee an above market price for farmers, setting a floor price that protects small producers.

Nevertheless, large companies improve their image by marketing maybe only one fair trade bar amongst tons of non fair trade bars. Is this really FAIR? Why not try to achieve an overall fair business model?

Lower Standards for huge companies like Nestlé

Introducing an overall fair business model is probably kind of difficult for large companies if it is even made easier for them to label their products as Fair Trade. As Tom Philpott reports in his blog post “Should Fair Trade Certify Giants Like Nestle and Folgers?” from November 29, 2011, Fair Trade USA, the main US fair-trade certifying entity, has announced plans to essentially lower its standards in the New Year.

As Philpott mentions, William Neuman explained in his article in the New York Times, that the group announced to change the rules with Fairtrade International. According to the “new rules”, products with as little as 10% fair trade ingredients will be eligible for certification. This makes it much easier for rich-world companies like Nestlé to produce so called “Fair Trade” products.

Does that still match the original idea?

It does not seem like these changes really preserve the original idea of Fair Trade to protect small farmers. Nevertheless there is a justified aspect to it: some mechanism must be added to push large corporations and the plantations they buy from to treat workers and citizens in the growing countries right, or they will never at all joing the Fair Trade idea.

What do you think? Is Fair Trade losing its meaning or sence?

According to me, if Fair Trade was really happening, there would be no necessity of labeling it.

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3 Comments

  1. I always wondered what that sign means and what is associated with fair trade, now I know…

    I think you did a really great job on contrasting the two main discussion points or perspectives; the actually positive idea of fair trade and the negative side of manipulating it.

    I also liked how you explained that using the example of Nestle and how many firms want the “positive” image but not the “negative” costs.

    Reply
  2. Mattias

     /  December 19, 2011

    Fair trade sounds good, but as you say, it’s something we don’t know that much about. When buying fair trade chocolate, I’m always surprised how little it says on the products about what makes it fair trade.

    The logo alone seems to generate sales enough, withoutany explaining what differs this special products from regular ones..

    Cynical as I am, I believe for some companies fair trade label is just another way of dividing the market into segments, attract different customer and maximize profit..

    Read about what BBC says on Nestlé on the last part of this article:
    http://news.bbc.co.uk/2/hi/business/4788662.stm
    :))

    Reply
  3. Hello! Thanks for quoting from my blog. I also wrote on Nestle’s new involvement with Fair Trade and I agree with you, FairTrade USA should not be watering down their standards to allow large companies to become certified. However, small steps, even though sometimes not enough, are a start to hopefully encouraging and demanding more steps towards a fully ethical business standard.
    To your point on the legitimacy of the FT label – in the UK now so many products are now Fair Trade they are even ceasing to be labeled and are no longer a differentiator. From a consumer standpoint, we should do our part to find out what the label means, and ask the makers of our favorite chocolate just how “fair” their bar is.
    I will be highlighting some stand out chocolate companies that embody sustainability in future posts.

    Reply

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