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Fair Trade Coffee KlatchingPage 1 | Page 2
Coffee Key to Fair Trade Success To learn more about Fair Trade, we went to the Managing Director of TransFair Canada (Fair Trademark of Canada), Caroline Whitby. And, of course, because talking coffee without Starbucks is like talking ice cream without Ben and Jerry's, we also went to Starbucks. Opening this up is our interview with Caroline Whitby. Starbucks turned out to figure in another story. Caroline Whitby is the Managing Director of TransFair Canada. She has worked on community development programs overseas, as an advisor and manager. She has also done consulting work in Canada in cross-cultural training and services to high tech industries. Her academic background lies in international development studies and business management. Caroline lives in Ottawa, Canada with her partner and two children. QUESTION: The Kathy Gifford-child labor allegations pertaining to the rag trade pointed up a significant flaw in the "ethical trade" notion that corporate bodies would police themselves and adhere to international labor conventions that, presumably, have the status of law in signator countries. How does Fair Trade differ from "ethical trade"? RESPONSE: Fair Trade and ethical trade are two distinct mechanisms aiming to improve incomes and working conditions of workers and producers outside North American and Europe. Both are borne out of consumer concerns for the origin and conditions of production of goods or services they purchase. Fair Trade seeks to address the unfair trading conditions met by third world producers when dealing in international markets. Fair Trade is purely a civil society initiative that began with the emergence of alternative trading organizations. These organizations developed direct trading relationships for products such as coffee to ensure a better price paid to producers. With the emergence of labeling initiatives and the Fairtrade Labeling Organizations International (FLO), mainstream companies began dealing in Fair Trade, dealings independently monitored by the FLO. The standards developed by FLO are enforced by labeling organizations such as TransFair Canada and TransFair USA, thus assuring consumers that producers received a fair deal. QUESTION: For marketing purposes, a Fair Trade certification label could carry enough cachet among consumers for retailers to see it as a valuable sales aid; a hot button, if you will. However, does a Fair Trade label certify "fair trade" throughout the commodity system; that is, from grower to retailer? RESPONSE: Yes. The Fair Trade label ensures that all steps in the chain from the producer to the consumer have been monitored. Otherwise, it would not be possible to assure the consumer that a commodity is fairly traded. Let me give you an example of how the certification process works for coffee. First, producer cooperatives are registered and monitored by FLO to make sure members receive the benefit of Fair Trade transactions. Importers are also monitored, either by the central FLO register or the national initiative, TransFair USA, for example, in the US. Importers are obliged to produce reports on their transactions with the registered cooperatives and provide evidence that they paid the pre-set minimum price or the premium to the producers. These reports are subject to independent audit. Roasters are also licensed and monitored by FLO. By contract, they are committed to reporting their purchases, roasting activities and sales of Fair Trade coffee. They are also subject to verifications, and agree to display the FairTrade logo according to standards in the contract. Usually, the chain ends with the roaster, who sells packaged and labeled coffee to distributors or retailers. In some cases, companies buy roasted coffee and package it themselves. They are also licensed by TransFair or FLO, and fulfill the same reporting and auditing requirements as roasters. For other products certifiable by FLO, a similar chain of custody exists. In the case of cocoa based products, which contain non-FairTrade ingredients, criteria are defined as to what constitutes an adequate percentage of Fair Trade ingredients. QUESTION: What is the certification criteria for fairly traded coffee? RESPONSE: Basically there are four, and they weigh variably within the growing-processing-marketing systems. First, a minimum price. Second, purchase of beans from democratically organized small growers, usually a formal growers cooperative. Third, provision of pre-harvest credit; in other words, a tangible sharing of risk. Fourth, agreement to purchase on a long-term rather than one time basis. These are the general parameters and they are regularly monitored for compliance. QUESTION: We talk about small producers. In some parts of North America a small producer is a farmer with thirty acres, in other parts the small producer has two or three sections. What is the Fair Trade threshold at which small producers are no longer considered small? RESPONSE: The answer to that may be found in the eligibility criteria for producer cooperatives. To be eligible, a producer cooperative must have a majority of members who are small scale producers of coffee. By small producers are understood those that are not structurally dependent on hired labor, managing their farm mainly with their own and their family's labor force. Further defining "small scale", the FLO coffee register uses a production threshold of 3000 pounds of unprocessed coffee. In some areas, where land productivity is high, the threshold can be increased to 5000 pounds. The average land holding of cooperative members is one to two hectares. During the harvest period, most of the time the whole family works, including children. In Honduras and Nicaragua school holidays coincide with the picking season. Most families do not hire labor, and, if they do, the number rarely exceeds two or three persons. There is currently no mechanism within the monitoring framework to determine the fate of these hired workers. Our monitoring focuses on the cooperative, of which family farms are members, to ensure members control the institution and in that way control the proceeds of sales. In the case of products that are produced on estates or plantations using hired labor, such as tea, the eligibility criteria focus on the employment conditions and worker representation, rather than on farm size. Page 1 | Page 2 |
