FLO, Fair Trade USA, and Starbucks: A Critique (Part 6)

May 1, 2012 6:00 PM ET

Posted by Julie Fahnestock

“When the dragons started coming in, the label changed. The farmers are also frustrated with the different types of standards. When Transfair [Fair Trade USA] announced its departure from FLO, farmers denounced this move,” Dean Cycon, Owner of Deans Beans.

Both a piece of contention and applause is the support and impact both FLO and Fair Trade USA have made in big businesses. They have pushed big businesses to re-think the way they relate to their producers. Many accounts describe the fair trade system in the United States as a largely successful story of the use of standards and certification to dramatically expand an alternative or ethical market, reaching a mainstream consumer base through mass-market retail channels, and redistributing capital to disadvantaged Southern producers through minimum prices, (Jaffee, 272). Fair Trade USA recently faced an insurmountable amount of negative feedback for their previously lower standards, mainly for the fear of “fair-washing” consumers and becoming just another marketing scheme.

The fear of fair-washing by big corporations leads to bigger questions of sustainability for the movement: Do big corporations water down fair trade standards? Can fair trade maintain its integrity and purity with the involvement of Starbucks and Green Mountain Coffee Roasters? Is Fair Trade USA perpetuating the problem by labeling products with several different labels and confusing consumers? Lastly, will the fair trade movement fall apart if it goes main stream?

Many movement activists including Albert Tucker, former board member of FLO, see big business as a threat to the guiding principles of Fairtrade.

"We cannot let our radical vision of a completely different way of doing business be watered down by opportunistic transnationals," writes Albert Tucker. "The fair trade mark should be regarded as a 'badge of honor,' not just a brand of food that demonstrates you are paying a little more to desperate farmers ... if any transnationals are involved, they must negotiate with poor farmer businesses on an equal basis, having signed up to stringent standards across their entire operations,” (Jaffee, 273).

Dean Cycon couldn’t agree more. “When the dragons started coming in, the label changed. The farmers are also frustrated with the different types of standards. When Transfair [Fair Trade USA] announced its departure from FLO, farmers denounced this move.” Dean and other purists in the fair trade movement are afraid that fair trade will lose its credibility when corporations like Hershey enter the market on the basis of Fair Trade USA’s standards. Certifying only the cocoa solids, but not the vanilla, sugar or cocoa butter in chocolate should not make it eligible for the Fair Trade mark, the purists argue. FLO and Fair Trade USA need to critically think about their relationship with mainstream and under the impact it will have on their producers if they are to remain influential (Tallontire, Challenges, 13).

With so many different fair trade labels and standards and the ability for anyone to create a labeling organization, not only do FLO and Fair Trade USA lose their credibility, but the entire fair trade movement loses its credibility. To confuse consumers even more, Fair Trade USA will continue to accept producer groups certified by FLO-CERT (fairtradeforall.com). The black and white label which belongs to Fair Trade USA will label their products and those of FLO’s, which have very different standards. The consumer will not know if a product has been certified by SCS or by FLO-CERT and according to Larson at Fair Trade USA, “the reality is that the average consumer doesn’t even know the difference.”  If standards are not clearly defined on the label so that the average consumer can know the difference, will the fair trade movement be sustainable? Should the labeling organizations be held accountable by a larger governing body?

Simply put, the answer is yes. FLO and Fair Trade USA should be held accountable. Currently there is no governmental standard for fair trade certification, the same situation as with “organic” until a few years ago (Downie). Fair Trade USA is accountable to the firms who buy their seals and to the SEC who audits and monitors them, but is this enough? FLO is accountable to ISEAL which is accountable to the ISO standards, but they would also do better with a more formalized fair trade governing body to maintain their credibility. Private or public, a trusted authority should be in charge of regulating fair trade organizations’ standards, outcomes and practices. Equitable prices for small farmers with limited access to the global market are too important not to protect.  The last thing fair trade advocates want to happen is for the movement to become a profit-driven, marketing scheme. This would be pure injustice. A governing body is needed to protect the farmers and uphold the movement.

FLO and Fair Trade USA have a long way to go in order to truly revolutionize trade for smaller farmers. More transparency, more scalability, and commitment to the highest of standards are required of them if they desire to develop the Third World and pull the poorest of the poor out of poverty. Decisions about development vs. trade development need to be made. Marketing of standards needs to be clear. Global standards need to be created and upheld. And a governing body needs to regulate the movement. The fair trade movement will only be as sustainable as the most influential labels make it. Sustainability will be their choice and this choice only seems fair to the millions of farmers behind the labels.

Thanks to all my readers for following this series and to all of you fair trade advocates out there. Let’s keep striving for unity as we push through some of the growing pains right now.

Stay tuned for next week’s interview with Fairtrade International.
And coming soon, a Q &A with Rodney North from Equal Exchange.

(To obtain a copy of the citations, please contact Julie directly)