Is Fair Trade the Answer?

For much of the history of chocolate production, it has been the farmers who have suffered the tolls of exploitation. Unfair prices continue to leave many cacao farmers in poverty while the intermediaries between farmers and the consumer market are reeling in large profits. The current practices have created a standard of living that many farmers believe is not worth the work. So where traditionally the family farming business would be passed down to kin, it seems only logical to ask just how long will these farmers accept this mistreatment before they drop the family business all together? Such talk has fueled worrisome predictions about the future of chocolate. The small-scale farmers who endure the greatest exploitation are actually the ones who contribute approximately 90% of the world’s cacao (Lamb, 2014). If the children of these farmers do not take over for their parents, the world’s cacao sources will dwindle, chocolate prices will skyrocket, and companies will likely be forced to reduce cacao content in their products. To add

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Small-scale farmers produce about 90% of the world’s cacao and thus are an integral part of the chocolate production supply chain.

on to the problem, cacao trees that live in much of West Africa are producing lower yields as they age and farmers do not possess the funds to help combat the shrinking cacao numbers (Fair Trade USA, 2011). To help solve these problems, Fair Trade has made huge steps towards improving the situation for farmers and the cacao production process in general. Fair Trade has brought into light issues that were previously in the dark and set into motion plans to fix them. But just how effective is Fair Trade? Is it actually achieving what it sent out to do? Fair trade has without a doubt set its sights on a noble cause but, as one will discover in this paper, the organization’s plan still has some deficiencies that must be addressed if the any substantial change is to be solidified.

Cacao Production

The majority of cacao farmers fall at the mercy of local collectors and intermediaries who move their cacao to exporters and processors. These intermediaries are purchasing cacao from farmers for prices much lower than what is considered “fair.” These practices have suppressed farmers into states of poverty, with little chance of rising out of it. As mentioned earlier, cacao yields have also been suffering, which has in turn put a larger stress on labor needs (Fair Trade USA, 2011). Economic hardship has likely been a major contributor towards the use of child and salve labor in West Africa. Identifying these issues as problems that need to be addressed, Fair Trade has stepped in and placed into action a plan to rid farmers of the injustices that have been pushed upon them.

Fair Trade

Fair Trade has set its sights on helping “cacao cocoa farmers, traders and chocolate manufacturers participate in long-term, stable relationships that support a dependable living for farmers and their families” so as to allow them to “provide a reliable, high quality cocoa supply for the industry” (Fair Trade USA, 2011). The Fair trade system consists of: encouragement of farmers to organize as cooperatives, certification that ensures the absence of child labor, a framework to increase environmental sustainability, a ban on the use of agro-chemicals, a Fair Trade price guarantee, and community development premiums (Fair Trade USA, 2011).

Farmer owned and governed cooperatives and associations, essentially give farmers leverage to aid in the achievement of higher and more fair prices for their products. So whereas, in the past, farmers were often economically exploited as the result of possessing little power, cooperatives are essentially helping to restore balance to the chocolate production chain.

The Fair Trade guarantee of no use of child labor helps assure consumers that they are not supporting such injustices by buying the product, thus making not only the end product more desirable to consumers, but also the cacao more desirable to intermediaries, exporters, and processors. This is an incentive to farmers to resist the temptation to hire cheap labor in the form of child workers, contributing towards a higher ethical standard.

The importance placed on environmental sustainability and the ban on agro-chemicals helps to insure not only the quality of the product, but also the future prospects of prosperity and the continued production of cacao. To help with this, Fair Trade has implemented premiums designated to community development to “increase product quality, build infrastructure, train cooperative leadership, bring safe drinking water to their communities and establish local health clinics and schools” (Fair Trade USA, 2011). A large focus has been set on increasing the living conditions of farmers, essentially giving them a lifestyle worth investing in.

There have been numerous efforts aimed to improve cacao production. Many of these approaches were centered around increasing yields and creating new disease resistant cacao plants. It is Fair Trade’s opinion, however, that these plans failed to address the root cause of the problem, the economical exploitation of farmers resulting in their inability to invest in their work and create an environment that allows for a sustainable business (Fair Trade USA, 2011).

Fair Trade in Action

Within the Fair Trade system, as of 2011, there are 62 cacao-growing cooperatives worldwide, including 14 small-holder farmer cooperatives in Côte d’Ivore with 200 to 6700 members in each (Fair Trade USA, 2011). Fair Trade has seen implications in aspects of life that go beyond higher prices. Kavokia, a cooperative certified since 2004, now owns a big health center that offers free treatment and health care to its members (Fair Trade USA, 2011). Another cooperative, Coopaga, invested in trucks, computers, and other tools for its members and also helped contribute to the building of a local hospital (Fair Trade USA, 2011). Two other cooperatives, COOPAAAKO and COOPAYA, achieved organic certification of their crops after investing in organic production methods (Fair Trade USA, 2011). Fair Trade has also led to the first farmer owned Fair Trade chocolate, the Divine Fair Trade milk chocolate bar, made by The Day Chocolate Company (Oxfam, 2010). “We have taken our destiny into our own hands,” says Comfort Kwaasibea, a

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Farmers have been able to allocate much of their Fair Trade premium towards establishing a better standard of living.

member of the Kuapa Kokoo cooperative (Oxfam, 2010). In 2013, Fair Trade producer organizations earned £4 million in Fairtrade premium alone, earnings that have allowed producer organizations in West Africa to allocate 36% of their premium (suggested minimum is 25%) on projects to increase productivity and cacao quality (Galandzij, 2014). These examples point to the positives of the Fair Trade system and the outcomes it can produce; however, they do not paint the whole picture. In order to understand Fair Trade in its full context one must acknowledge its shortcomings.

Limitations

Upon first glance, the Fair Trade system seems hugely successful. In 2014, global sales reached £4.4 billion, which is up 10% from the year prior (Clifton, 2015). In fact, The Swedish and German markets saw 37% and 27% increases respectively in Fair Trade sales (Clifton, 2015). However, things aren’t as rosy as they appear to be for small-scale farmers. Solidaridad’s 2012 report reveals that even the best performing smallholders earn less than US$10 per day (Clifton, 2015). So it seems that despite Fair Trade’s success on the market level, small-scale farmers are still falling victim to economic exploitation. Dutch trade campaigner and current Executive Director of Solidaridad, Nico Roozen describes the reality for small-scale farmers as “a shift from poverty to certified poverty” (Clifton, 2015). The limitations of Fair Trade don’t stop here.

The Fair Trade certification stamp was designed to distinguish products that have essentially passed the ethical tests of the supply chain. Fair Trade products are supposedly free of child labor and the farmers who grew the cacao were justly paid. To the consumer, these are attractive guarantees and they allow the individual to feel good about the products they are buying. On the surface, the idea seems pretty reasonable. Companies who use Fair Trade cacao in their products will not only support an ethical cost, but will also hold an advantage on the consumer market. But unfortunately, things are not this straightforward. The Fair Trade system was largely implemented to help the too often exploited small-scale farmers move their products to new markets in order to allow them to compete with large-scale farmers. However, the Fair Trade certificate no longer guarantees tha
t small-scale farmers are step 1 in the supply chain, expanding their programs to large-scale farmers (Lindgren, 2015). As a result, products from large-scale farmers have now begun being labeled with the same Fair Trade certificate, essentially pushing small-scale farmers right back to the unfavorable and disadvantaged status from which they started.

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Child labor/slavery continues to be a problem in the cacao production industry.

Fair Trade seems to also be failing on its commitment towards ensuring the absence of child labor from the production process. Anti-Slavery International Director Aidan McQuade claims that when they met with Fair Trade, Fair Trade stated that their primary responsibility is producers, not children (Clifton, 2015). McQuade also claimed that child labor and child slavery is common and a part of the culture in Ghana and Côte d’Ivore (Clifton, 2015). Moreover, although Fair trade bans the use of child labor, they also claim that they cannot guarantee that a product is free of child labor (Clifton, 2015). Regardless, it doesn’t seem like Fair Trade cares about investing the efforts needed to completely eradicate child labor. But under these standards, what does the certificate even represent?

This question can be asked again in response to the variability of products who all wear the same certificate. To be clear, some labels require significantly lower Fair Trade ingredients than others, providing misleading information to the consumer (Lindgren, 2015). A company who uses a larger percentage of cheap, non Fair Trade ingredients while still maintaining the Fair Trade certificate will obviously have an advantage over a company that pays the higher price for a greater amount of Fair Trade products. This obviously isn’t just and doesn’t help those who are largely dedicated to using Fair Trade ingredients.

Solutions

As farmers continue to be left in poverty, the world may soon face the consequences of malcontent farmers, and thus a lack of new farmers to overtake the current businesses. The Fair Trade system seems to claim a desire for better lives for farmers, especially those of small-scale, however motives will not change these farmer’s lives, only action will. The practicality of the current plan is not enough to pull small-scale farmers out of poverty, which is what Fair Trade initially set out to do.

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Fair Trade’s current certifications do little to help close the gap between large-scale farmers and small-scale farmers.

Fair Trade’s certifications seem to have lost their power to distinguish between large-scale farmers and small-scale farmers. The current labels provide no advantage to the already disadvantaged small-scale farmers, giving them little chance to pull themselves out of poverty. In order to fix this, Fair Trade needs to create a language that helps create a distinction between small-scale farmers and large-scale farmers so that consumers can know who they are supporting. A language could also be created to help differentiate between the varying degrees of Fair Trade ingredient use so as to provide a better representation of the product. Fair Trade could also increase the standards required to be considered Fair Trade certified for large-scale farmers to help small-scale farmers fair better in the market (Lindgren, 2015).

Lastly, in response to the lack of enforcement of the ban on child labor within the Fair Trade community, Fair Trade could implement a third party who would be observing the current labor practices with “a rigorous human rights lens” so as to be able to enforce the laws without a bias for the use of cheap labor through whatever means possible.

The Big Picture

Fair Trade’s efforts to confront unjust practices in the supply chain has consequently associated the brand’s mark with a commitment to high ethical standards. However, the organization may be getting more credit than it deserves. It is without a doubt a major step in the right direction to acknowledge the injustices that have plagued the success of small-scale farmers. However, there are a number of changes that must be implemented in the system if it is to have any significant effect on the lives and businesses of small-scale farmers. So is Fair Trade the answer? It may be the beginnings of an answer; however, it is one that currently remains incomplete.

 

 

 

Works Cited

Clifton, Helen. “Is It Time to Rethink Fair Trade?” Equal Times. N.p., 6 Nov. 2015. Web. 1 May 2016.

 

“Fair Trade Certified Cocoa Review.” Fair Trade Certified TM COCOA Review(2011): n. pag. Fair Trade USA, 2011. Web. 1 May 2016.

 

Galandzij, Anna. “Choose Fair Trade to Make a Positive Impact for Cocoa Farmers.” Fairtrade Foundation. N.p., 13 Oct. 2014. Web. 1 May 2016.

 

Haglage, Abby. “Lawsuit: Your Candy Bar Was Made By Child Slaves.” The Daily Beast. N.p., 30 Sept. 2015. Web. 1 May 2016.

 

“Kupa KoKoo.” KUAPA KOKOO (2010): n. pag. Oxfam Australia, Apr. 2010. Web. 1 May 2016.

 

Lamb, Harriet. “There Is a Solution to the Looming Chocolate Shortage – Pay Farmers a Fair Price.” The Guardian. N.p., 21 Nov. 2014. Web. 1 May 2016.

 

“Why Fair Trade?” Kopali Chocolate. N.p., n.d. Web. 1 May 2016.

 

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