Fair Trade Is In Crisis

By Phyllis Robinson

"Fair Trade is in crisis", says Frans Van der Hoff, one of the co-founders of the Fair Trade system in an interview aired on CBC Radio in Canada. Phyllis Robinson has written an article about the interview on Small Farmers. Big Change. We find this article and this subject very important so we re-publish the article below.

"Fair Trade is in crisis", 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:

  • 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…"
  • 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."
  • 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!



Phyllis Robinson
Article by Phyllis Robinson
First published at Small Farmers. Big Change.

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