The Fair Trade movement seems to have entered a once in 25-year time of tremendous change. As the dominant certification system experiences its first major split since its founding in 1988, producers, businesses, and other advocates continue to debate the direction of Fair Trade, differences between Fair Trade USA and Fairtrade International, and the very essence of Fair Trade. Some of the most relevant,  recent online comments to date include:

Mexican Coordinator of Small Fair Trade Producers public statement

Fair Trade USA publicly lists supporters and a letter of support from Coope Tarrazu at FTUSA

Equal Exchange online campaign publically lists supporters of Fair Trade for small farmers, and opposes FTUSA’s Fair Trade for All, at Small Farmer campaign

The 3 major producer networks at Producer Statements

Merling Preza, President of CLAC, on Coffeelands blog

Jerónimo Pruijn van Engelen, Executive Director of FUNDEPPO/Small Producers´ Symbol, and CLAC Delegate to Fairtrade International’s Standards Committee, at FTRN Webinar 118 (text notes at Webinar 118 insights)

Coffeelands blog posts of Michael Sheridan, Catholic Relief Services, and Bill Fishbein, founder of Coffee Kids

Fair Trade People discussions on LinkedIn

Equal Exchange Small Farmer blog, especially the speech by co-founder and co-president Rink Dickinson

Fair World Project press release

Fair Trade USA CEO Paul Rice on FTRN Webinar 117 (text highlights at Webinar 117 insights)

With the major news that FTUSA is leaving FLO, FTRN is producing a webinar series in October/November for the public to discuss implications and ask questions of FTUSA, FLO and advocates. See details of FTRN webinars.

On November 1, FTRN produced Webinar 118: A Community Discussion of What FTUSA Leaving FLO Means for Producers and the Movement-Part 2 with a Producer Leader.  The panelist was Jerónimo Pruijn van Engelen, Executive Director of FUNDEPPO/Small Producers´ Symbol, and CLAC Delegate to Fairtrade International’s Standards Committee (CLAC-Latin American and Caribbean Network of Small Fair Trade Producers owns FUNDEPPO, which is managed independently from CLAC), and moderator was Jeff Goldman, Executive Director of Fair Trade Resource Network. Part 3 with FLO, and Part 4 with both FTUSA and FLO, are expected as webinars in coming weeks. You can download the 50-min recording of webinar 118, or register for upcoming webinars, at FTRN webinars.

Some of the speakers’ main points from the webinar include comments below.Some history of Fair Trade certifications-
Fair Trade as a concept came from the southern small producers (80s)
Fair Trade at its start was a synonymous to grass roots Small Producers´ Organizations (SPO)
The concept was “widened” in the North to include Plantations and others
Structures and vision became much more market than producer driven
Different visions within the FLO members

CLAC struggle-
The CLAC (SPO´s of Latin America and the Caribbean) have been struggling for 20 years to gain power within FLO
The CLAC and its members have and still put many resources into this
The CLAC is the only continental FT Producer Network of only SPO´s in FLO system
The CLAC advocates for the interest and values of SPO´s, inside and outside FLO

Main problems with the split-
Producers do not share the Fair Trade for All (FTFA) vision, for being only market oriented and not respectful of producer realities
Producers question the governance structure of FTUSA /FTFA; no broad backup or democratic participation of producers
No clear control system and discounts
It does not add any value to producers

Expected impacts of the split-
Unloyal competition by private plantations and big corporations
Standards against the interest of small producers; in favor of big players
Losses of markets, visibility and/or benefits for SPO´s
(Even) less influence on the system by SPO´s
Loss of credibility of Fair Trade and its certification systems

Small producers propose-
Maintain the struggle towards FTUSA and also FLO of the interest of SPO´s and the original values of Fair Trade, such as self-managed sustainable development, strengthening of local organizations, markets and economies
Promote the Small Producers´ Symbol as a way to differentiate ourselves in the (fairtrade and sustainable) markets with all the values the producers stand for

It is strange that FLO and other certifications have resisted equal power for producers within certification systems, perhaps because FLO was afraid producers would break down the markets, or that labeling initiatives would lose power. FLO did recently make the important change of giving 50% of highest decision power to producers, possibly because of worry that producers would leave FLO system.

Small producers were not “at the table” when FTUSA made the decision to leave FLO, probably because FTUSA knew small producers would disagree.

CLAC believes large plantations are kicking small producers out of the Fair Trade market, as large plantations have done in other markets. The market will not grow for small producers, only for large (monopolistic) ones, so CLAC doesn’t believe in “Rising Tide” theory.

CLAC is reconsidering its participation in COOPLINK, FTUSA’s program to strengthen coops, since CLAC’s initial commitment was made before the split came as a disappointing surprise to CLAC.

The Small Producers’ Symbol seems just as important after the split, as before, as a tool for small producers to differentiate themselves.

Asia and Africa producer networks built themselves by including hired workers, while CLAC didn’t, so the 3 producer networks have some different interests, despite many common interests, for small producers.

Small Producers’ Symbol system was created using ISEAL principles for labels and ISO 65 principles for certification, so the system has good credibility.

As an example of FLO standards favoring big producers, compliance costs are more burdensome for small producer organizations, so they are at disadvantage when receiving the same minimum price for their products like bananas.

A big part of consumers still think Fair Trade mainly benefits small producers, but the reality is quite different. So, the differentiation of SPOs is critical for ensuring benefits to SPOs.

The main worry of producers, due to the split, is what will happen to their markets and to their certifications. Those challenges are in addition to prior ones such as climate change and unreasonable price volatility.

The Fair Trade movement seems to have entered a once in 25-year time of tremendous change. As the dominant certification system experiences its first major split since its founding in 1988, producers, businesses, and other advocates debate the direction of Fair Trade, differences between Fair Trade USA and Fairtrade International, and the very essence of Fair Trade. Some of the best online comments to date include:

Fair Trade USA publicly lists supporters and a letter of support from Coope Tarrazu at FTUSA

The 3 major producer networks at Producer Statements

Merling Preza, President of CLAC, on Coffeelands blog

Jerónimo Pruijn van Engelen, Executive Director of FUNDEPPO/Small Producers´ Symbol, and CLAC Delegate to Fairtrade International’s Standards Committee, at FTRN Webinar 118 (text notes at Webinar 118 insights)

Coffeelands blog posts of Michael Sheridan, Catholic Relief Services, and Bill Fishbein, founder of Coffee Kids

Fair Trade People discussions on LinkedIn

Equal Exchange Small Farmer blog, especially the speech by co-founder and co-president Rink Dickinson

Fair World Project press release

Fair Trade USA CEO Paul Rice on FTRN Webinar 117 (text highlights at Webinar 117 insights)

With the major news that FTUSA is leaving FLO, FTRN is producing a webinar series in October/November for the public to discuss implications and ask questions of FTUSA, FLO and advocates.  See details of FTRN webinars.

Fair Trade USA (FTUSA) has announced that the dominant label on U.S. and Canada products certified as Fair Trade will change to the one pictured at left. Both the new label, as well as the outgoing “bucket boy” one, will appear on products sold in N. America in 2012. The new “Fair Trade Certified” label, for the first time, can also be used on products sold in countries outside of N. America. So, the 3 widely recognized product labels in Fair Trade (Fair Trade Certified, FAIRTRADE, and Fair for Life) will now be seen in the U.S., Canada, and other countries.

Details at new Fair Trade Certified Label Launch

On October 12, FTRN produced Webinar 117: A Community Discussion of What FTUSA Leaving FLO Means for Producers and the Movement-Part 1 with FTUSA.  The panelist was Paul Rice, CEO of Fair Trade USA, and moderator was Jeff Goldman, Executive Director of Fair Trade Resource Network. Part 2 with FLO, and Part 3 with both FTUSA and FLO, are expected as webinars in coming weeks. You can download the 50-min recording of webinar 117, or register for upcoming webinars, at FTRN webinars.

Some of the speakers’ main points from the webinar include comments below.

Jeff:

Fair Trade seems to be in a once in 25-year moment to reaffirm, or redirect, where Fair Trade is going.

Paul:

Diversity of models in Fair Trade is a strength of the movement.

New “Fair Trade Certified” product label will be rolled out in coming months.

Producers and businesses now have more choice in certifications due to FTUSA splitting from FI.

The main change to FTUSA standards, for now, is in coffee, to allow hired labor and unorganized farmers to participate in the system. There are no changes at present in environmental standards from FI. Some producers have complained that the costs of compliance with environmental standards exceed the financial benefits, so FTUSA will consider how to make compliance more cost-effective for producers.

I’m not sure if FTUSA will accept IMO “Fair for Life” certification for producers, but I am talking again tomorrow with the CEO of IMO to explore things. I’m actually talking to others too to explore how we can move the field forward.

Participant question:

Much of the discomfort about your departure from FLO surrounds the unilateral nature of the decision.  Producer networks such as CLAC (Latin America producers), Fairtrade Africa, Network of Asian Producers, and WFTO have all come out publically against it.  Will you publish who among your stakeholders you consulted with prior to the decision, and what stakeholders will transparently help you set the new course for unorganized farmers, domestic farmworkers, etc.  As you go forward, with or without stakeholders, how will you be accountable to the movement (NGOs, FT Towns, etc) who promote your FTUSA brand?

Paul:

We seek input from multiple viewpoints through Advisory Committees on issues, initiatives or crops; through our Board of Directors; and, through our relationships across various stakeholders. I can’t publish a list of all the people we spoke to, that wouldn’t be appropriate. I met with leaders from all 3 producer networks, some in the elected structure, but with more leaders outside those elected structures. We also met with those without a formal voice, like farmworkers. About 20-30 producer coops sell the majority of volume into the US, and we’ve reached out to almost 100 coop leaders in the past few weeks.

The decision to leave FI was not so much a political decision, but a business decision. The level of service from FI didn’t justify the cost, financially as well as through the constraints of membership.

Participant question:

What evidence, or rationale, do you have that hired labor needs Fair Trade USA to generate benefits for them, when smallholders in coops may not have enough benefits yet?

Paul:

In many cases smallholders and hired laborers are from the same families, the same communities. IMO works with farms of all sizes, organics or Rainforest Alliance work with estates of hired labor, and FLO works with hired labor in certain products. When Fair Trade bananas opened to estates, Fair Trade sales increased for coops too. Many coffee businesses already source from both coops and estates. We’re not going to flood the market by opening supply from 100 estates, we’re going to do 5-10 estates in 1-2 countries in the first year. Then we’ll build on what we learn from the data, publically available, of sales from coops v. sales from estates. If coop sales don’t increase, we’ll have to adjust course.

Participant question:

To use the “Fair Trade Certified” label on a multi-ingredient product, will FTUSA require that all commercially available ingredients that could be FTC, are FTC, as FLO 2.2 requires?

Paul:

No, we disagree with that approach, and FTUSA has always had a different approach to ingredients. US market conditions are different from those in Europe. About 8-9 years ago the chocolate companies we were hoping to partner with said that they wouldn’t do both FTC cocoa and sugar, because the sugar quota and tariff system in the US market made sourcing sugar too difficult and expensive. Now, as supply is growing slowly, those companies are sourcing some FTC sugar too.

Participant question:

Could the product label distinguish between 50-100% ingredients being FTC, and minority % being FTC? Could the label distinguish between ingredients produced by coops and ingredients produced by estates/plantations?

Paul:

Labels can only pack so much information into them before they break down. Transparency will be available on the website with information about % of ingredients that are Fair Trade. We’ve heard many proposals about using color coding, number of stars, etc., to distinguish organic from not, 100% Fair Trade companies from not, coops or hired labor, and such information is better communicated by companies on their packaging. Most companies don’t think their customers care for that level of detail.

Participant question:

How are you incentivizing companies to climb the ladder and increase their Fair Trade commitment?

Paul:

Historically, many in the movement saw Fair Trade a partnership between producers and consumers, and businesses were a necessary evil. We see the business community as an equal partner, and work with them over time. Our experience with Ben & Jerry’s validates our approach, as we were patient at first, not making unreasonable demands like converting all their sugar to FTC. Then the company commited fully to Fair Trade after 5-6 years.