Fair Trade, An Interview with Jonathan Rosenthal: Ethical Choices in the World of Chocolate and Beyond

For as long as chocolate’s popularity has reigned, questions about the ethicality of cacao production across the world have also been prevalent. When chocolate was first introduced to Europe, its influence was fairly restricted to only the most elite members of society, with limited influence beyond the one percent of society. In a similar vein, sugar as a commodity was only consumed by the wealthy, with limited medicinal influence. As European Historian Woodruff D. Smith explained in his paper “Complications of the Commonplace: Tea, Sugar, and Imperialism”, “sugar was the object of a sustained vogue in Northern Europe” in the 1500s and 1600s. But as sugar and chocolate, became increasingly popular across the continent, its production was forced to catch up with the suddenly commonplace consumer good. In order to make sugar and chocolate available to the consumer population, there had to be significant “growth of West Indian plantation production and the high level of integration between production and distribution” (Smith, 262). These concerns over labor conditions and plantations have continued across the ensuing centuries, as many cacao farmers in Africa are still not paid a living wage, forced to work arduously for minimal pay. This struggle highlights one of the fundamental problems with the cacao production chain, as the lion’s share of profit is enjoyed by the retailers, who are most removed from the cacao production process. Meanwhile, cacao farmers tend to see less than seven percent of the value of cocoa sales (Cocoa Barometer 2015). The website https://makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0 is a resource that demonstrates the struggles of many people that are lower on the chain of production, like farmers and traders, especially relative to manufacturers and retailers. It is along this backdrop of unfairness and inequality, that arrangements like Fair Trade arise.

A diagram representing the percentages of revenue going to different sectors of chocolate production.

The central principle of Fair Trade was designed to protect the interests of producers, in order to pay them a living wage. Fair Trade guarantees farmers a baseline price, which enables them to put food on the table and make ends meet on a more consistent basis year-round. I had the opportunity to interview Jonathan Rosenthal, one of the early pioneers of the American Fair Trade movement, from the 1980s onwards. Rosenthal, along with Rink Dickinson and Michael Rozyne, helped popularize Fair Trade in the form of a business that would reconnect people to their food in an ethical and just manner (Just-Works.com). Rosenthal’s foray into the Fair Trade movement morphed into idea of Equal Exchange coffee, a worker-owned Fair Trade company, and later into Oke USA, the first American Fair Trade fruit company.

Equal Exchange Coffee was the company that Rosenthal helped create, early in his career.

“Three of us decided we would set up our own food company, somewhat in response to all the things that we couldn’t do in the consumer food coop world, so we decided to set up a worker-owned Fair Trade food company,” Rosenthal said. “We set out to set up a food company to basically see how idealistic we could be and still survive. So now how I summarize it is instead of paying as low a price as possible to farmers, what would it mean to have the aspiration to pay farmers as high a price as possible and still survive in the market.”

Articles previously written about Rosenthal demonstrate the breadth of his knowledge, and touch upon his impressive experience in the Fair Trade world. https://grist.org/article/rosenthal/ My conversation with Rosenthal helped shed light on the relationship between Fair Trade and chocolate, as well as the importance of continuing to improve working conditions for farmers worldwide.

“The idea of Fair Trade is, how can we, in a practical way, integrate our core social, spiritual, economic, political values in how we live our lives. In the case of Fair Trade, that’s about how products are sourced, especially since very little of our population knows where their food comes from,” Rosenthal said. “My work in Fair Trade was about helping people connect or reconnect to food, and connecting to understanding who produced the food, and how it was produced. Feeling like it’s ethical and sustainable, and that people are being treated well enough. Take the case of coffee or cacao, most of those products are grown in very terrible conditions, but it’s so far away and so far removed through processing from our daily lives of eating a chocolate bar, you have no idea how people lived that helped produce this. The simple idea of Fair Trade is to provide some transparency and fairly compensate farmers.”

A four-minute summary of the basic tenets of Fair Trade.

In the past several decades since Rosenthal’s foray into the food world, and as Fair Trade has grown in prominence across the United States, some influential companies have taken steps towards sourcing their products in a more ethical manner. An archetypal example of this is Kraft Foods, that created “the Cocoa Partnership, established by Cadbury, [which] has committed approximately $70 million to invest in cocoa farming over ten years” (Kruschwitz). The Cocoa Partnership in Ghana was designed to help sustain the next generation of cacao farmers in Ghana, and demonstrate a desire to improve working conditions for farmers nationwide. This Partnership is an example of one of the ways in which large conglomerates can take positive steps towards change. While initiatives like these constitute movement in the right direction, there is still much more work to do from a corporate perspective. One of the biggest problems is that as larger companies like Kraft and Starbucks become increasingly involved in Fair Trade movements, the meaning and radicalism of these movements can become changed or watered down.

“I think trying to create transformational change in corporate America by threatening and attacking and policing is really really difficult and it’s hard to see a long term win in that,” said Rosenthal, about Fair Trade’s initial strategy of being combative towards corporations like Kraft Foods. “Working with large corporations, large NGOs and nonprofits, and governments is important, because those are areas with a lot of resources, so if you can convince those people to do things differently, you can have a big impact. The challenge of this of course, is that a lot of those big institutions and people that have a lot of power and have a lot of responsibility, it’s really hard for them to create big change, even small things, because systems have momentum. And it’s really hard to shift the momentum. So it’s often not because they’re bad people or bad CEOs, but they’re in a system that has momentum and structure.”

Not only have the fluctuation of world market cocoa prices impacted farmers’ incomes, but taxes and local trading structures have had a similarly negative effect. For example, over the past decade, farmers in the Ivory Coast have been able to retrieve merely between 40 to 50% of the world market price for their beans (Makechocolatefair.org).  The volatility of the world market prices for cocoa also result in unpredictability for the livelihood of farmers. While Rosenthal’s experience with these problems are more concentrated in the coffee and fruit industries, he sees the chocolate production chain as similarly problematic, but potentially remedied by Fair Trade organization.

Cacao Production in the Ivory Coast, one of the countries where farmers constantly struggle with fluctuating market prices.

“One of the things about Fair Trade certification is that they usually have a floor price, and farmers and never paid lower than that price,” Rosenthal explained. “So that provides a lot of stability for farmers, knowing that at least the product that they sell to the Fair Trade system, they will always get at least a certain price. And so they can always afford basic necessities for most of the year and can help put food on the table, and send their kids school, those kinds of things. So for me, that gets us to another one of the core things that Fair Trade does, which is to create that stability.”

The implications of low incomes for farmers extends well beyond putting food on the table. These problems can result in farmers’ employment of child labor, as well as reducing salaries and farming using less environmentally sustainable techniques (Makechocolatefair.org). While this might not sound like a significant issue, utilizing less sustainable methods of farming for cacao production can have ecological and environmental consequences. As our planet enters a more critical juncture in the battle against climate change, it is important to understand the ways in which unjust labor and production chains can result in less sustainable farming. Against this backdrop, Fair Trade movements are all the more important.

“I think overall, Fair Trade and environmental work overlap a lot,” Rosenthal said. “One of the big dilemmas is that the more success Fair Trade has, and the more integrated into the market and capitalism it becomes, which is inevitable if you’re gonna succeed, is that the opportunity to create change is less. In the earlier days of Fair Trade it was easier to create change or talk about making change in a more revolutionary way.”

Fair Trade hasn’t always been as prevalent as it is today, however. One of the struggles that the Fair Trade movement has consistently sought to resolve is consumer’s willingness to spend more money for ethically sourced products. A study conducted by Patrick De Pelsmacker, Liesbeth Driesen, and Glenn Rayp sought to determine the premium that Belgian consumers were willing to pay for Fair-Trade coffee. The three scholars, all academics at Ghent University in Belgium, sampled over 800 consumers in Belgian supermarkets to determine their purchasing practices. On average, consumers were willing to pay approximately 10 percent more for their Fair Trade coffee, than they would otherwise spend on a normal brand (De Pelsmacker et. al, 376). Unfortunately, the price premium for coffee in Belgium during the study was around 27 percent, which is 17 percent more than the average consumer was willing to spend. Therefore, amongst the sample, only around 10 percent of the 808 consumers were willing to pay a 27 percent premium for their coffee, while 90 percent were either unwilling to pay a premium or were willing to pay a premium of less than 27 percent (De Pelsmacker et. al, 379).

While this study was focused on coffee in Belgium, its results have implications beyond this one specific example, capturing one of the core questions at the heart of the Fair Trade movement. If it costs more, are consumers willing to pay for more ethical sourcing? If cacao farmers are going to be paid fairly for their work, allowing them to farm more sustainably, avoid child labor, while earning a living wage, it will require willingness on the part of the consumer. Many experts, Rosenthal included, believe that future generations are more aware of the concept of Fair Trade, making them more likely to lean into the idea of spending more money for ethical products.

“In terms of it becoming more popularized, I think people are willing to pay more for quality. The social values, the ethical criteria, are becoming part of the quality menu for younger people. There’s a lot more awareness today that part of quality is social relationships embedded in the products. When I started in this industry, none of that really was around,” contextualized Rosenthal on how newer generations of consumers are becoming increasingly aware. “Younger generations, take it for granted, they know to look for some label, whether it’s organic, or fair trade products, or it’s a direct trade or there’s cage free, like, there’s so many now, different programs, hundreds, really, for all different kinds of products. And so I think, to me, that’s very exciting. The downside is that most people have no idea what those things really stand for.”

Ultimately, much of Rosenthal’s work and experience have serious implications for the cacao industry. The plight of cacao farmers is undeniable, as the large majority, particularly in Africa, struggle to consistently provide for their families. Unfair production chains and fluctuating costs mean that many are unable to have reliable income, forcing some child labor among a myriad of other problems. In order to help ameliorate conditions, alternatives like Fair Trade can help provide a fair price to farmers, and provide them with stability and structure. Fair Trade is not without its flaws, however, as some believe that it creates a price ceiling instead of a price floor, and it can reward lower quality beans with higher prices. Despite these drawbacks, overall, Fair Trade’s effects seem reliably more positive than allowing the market to regulate itself, particularly for farmers. From a consumer perspective, the choice seems fairly straightforward as well, for those that can afford to be ethically conscious.

“I think we are what we eat to some extent,” Rosenthal said. “We all have dreams and aspirations about who we want to be and what we want the world to be. Fair Trade is, in a way, a microcosm of that same dilemma.”

Bibliography

Scholarly

De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee. Journal of Consumer Affairs, 39(2), 363-385.

Kruschwitz, N. (2012). Why kraft foods cares about fair trade chocolate. MIT Sloan Management Review, 54(1), 1-4.

Smith, W. (1992). Complications of the Commonplace: Tea, Sugar, and Imperialism. The Journal of Interdisciplinary History, 23(2), 259-278.

Grist. “Jonathan Rosenthal, Fair-Trade Fruit Purveyor, Answers Questions.” Grist, 10 Oct. 2006, grist.org/article/rosenthal/.

“Cocoa Prices and Income of Farmers.” Make Chocolate Fair!, 16 Aug. 2017, makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0.

“5 Unintended Fair Trade Coffee Problems.” Camano Island Coffee, camanoislandcoffee.com/fair-trade-coffee-problems/.

Multimedia

https://makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0

https://www. youtube.com/watch?v=xIX04o0xxa4

https://www.google.com/search?rlz=1C5CHFA_enUS761US761&biw=1440&bih=706&tbm=isch&sa=1&ei=qwPFXLu_B4LL_QaQ5Z74Dw&q=ivory+coast+cacao+farmer+price&oq=ivory+coast+cacao+farmer+price&gs_l=img.3…1021951.1026243..1026307…0.0..0.107.1884.28j1……1….1..gws-wiz-img…….0j0i67j0i8i30j0i10i24j0i24.Dm6vW15uWTk#imgrc=vnTvegc0Lih5EM:

https://twitter.com/FairTradeCert/status/983388476069613568

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