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Binita Rai, a member of Sanjukta Vikash Co-op in Darjeeling, India, in her diverse tea garden. Photo courtesy of Equal Exchange.
Binita Rai, a member of Sanjukta Vikash Co-op in Darjeeling, India, in her diverse tea garden. Photo courtesy of Equal Exchange.

Crisis in Fair Trade

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"We need to be clear: …fair trade came from the south, most specifically from one coop (UCIRI) in southern Oaxaca, Mexico. The idea was not to give control of the fair trade system to European non-profits, or bureaucrats, or multi-national companies or to plantations; but that is exactly what is happening." Equal Exchange co-founder Rink Dickinson, in his November presentation to the InterReligious Task Force on Central America

Co-op members' commitment to small farmer cooperatives and Fair Trade, over the past 25 years, has helped trading co-ops like Equal Exchange build and strengthen small farmer cooperative supply chains. Because consumers are willing to buy Fair Trade, small farmer organizations across the world have achieved the level of success they currently enjoy.

Unfortunately, this success and all our advances are now in jeopardy.

Deep controversies in the Fair Trade movement have been simmering over the past decade. Today, the situation has reached a boiling point and concrete actions must be taken or we risk losing everything we have collectively built.

Read this report from Rink Dickinson, co-founder and co-president of Equal Exchange, about the state of Fair Trade in the tea industry:

"The area we (EE) work most closely with in tea is Darjeeling in India. A tremendous number of estates there are fair trade. Those estates do not need access to markets. They already sell to tea companies and brokers throughout Europe and the U.S. For them fair trade is simply another aspect of their product that they offer to consumers that want it. To an extremely large extent nothing really changed for those plantations in becoming fair trade. They simply allowed their workers (who were already in unions) to create a committee shared with management to disburse some modest premium dollars to a development fund. In return, they had this extra "product attribute" to offer to Twinings or Bigelow, or Celestial or Stash. Perhaps more importantly the northern certifiers such as Transfair got to offer more products, take more market share in their competition with other social responsibility programs, and make more income.

Making this situation more ironic, the plantation tea workers who are weak players in this system are legally bonded to the land. They are tied to the plantations in a feudal manner. How can the people who pick the tea be bonded and the product be considered fair trade?"

How indeed can modern serfdom be part of Fair Trade?

How did this happen?

Fair Trade USA (formerly TransFair USA) has slowly but steadily chipped away at our principles and values, only recently taking the final steps in building their strategy. They have taken the name Fair Trade USA, then proceeded to leave the international Fair Trade System (FLO International/FairTrade International), lower standards, eliminate farmers from their governance model, and invite large-scale plantations into coffee and all other commodities.

This is not Fair Trade and we are asking you to join with us in differentiating TransFair's model from the authentic small farmer Fair Trade that we are collectively building.

Our Model: Authentic Fair Trade

In 1986, Equal Exchange (EE) was founded to challenge the existing trade model. EE supports small farmers and connects consumers and producers through information, education, and the exchange of products in the marketplace. At its founding, EE joined a growing movement of small farmers, alternative traders (ATOs), religious organizations, and non-profits throughout the world who shared similar principles and objectives. The U.S. consumer co-op movement has been an integral part of this movement.

Underlying EE's Fair Trade work is the belief that only through organization can small farmers survive and thrive. The cooperative model has been essential for building this model of change.

In the 1990s, Equal Exchange joined with a number of other organizations to create the certifying agency, TransFair USA. The goal was to create a mechanism to ensure that a company's products were providing social, economic and environmental impact for the small farmer organizations that grew them. Third party certification for Fair Trade was similar to certification for organic products, in that it provides consumers with confidence in their purchases. This turned out to be good business and TransFair grew as a result.

The certifiers have their own ideas… and interests

As time passed, TransFair began to take on a life of its own. Rather than confine itself to its purpose as a certifying agency, collecting fees from industries that used its seal and monitoring them to ensure that Fair Trade practices were being met, TransFair soon developed its own vision. "Quantity over Quality," "Breadth over Depth," and other qualifiers came to be used to describe TransFair's vision of a world in which vast numbers of products throughout the grocery store could be certified Fair Trade, in as fast a manner as possible.

Their problem was supply. Working with small farmer organizations can be challenging and time-consuming. These organizations don't have the same access to market, credit, infrastructure, and technology that large plantations generally do. Over the opposition of the ATOs, farmer organizations, and a host of other Fair Trade advocates, TransFair and its umbrella organization FairTrade Labelling Organization (FLO) began certifying plantation tea, bananas, cut flowers, and other products with a set of different, less rigorous standards than those elaborated for small farmer organizations.

Soon, large corporations began to see value in certification as well. They discovered that consumers would respect all of their products, even if only one or two were certified as Fair Trade. TransFair rapidly began courting big businesses into the Fair Trade "family", such as Chiquita, Dole, and Nestle. The Fair Trade advocates protested, to no avail. Big business profits grew and, as more volume got certified, TransFair continued to grow as well.

Current happenings

These actions, and many others throughout the years, have created large-scale opposition against the certifiers and bad feelings have mounted about the lack of transparency, accountability, openness, and representation on the boards and within the committees of FLO International and TransFair USA. Little has changed. Until this year, when the growing rift finally reached a head:

It is time to withdraw support from TransFair USA/FairTrade USA products. They do not represent Fair Trade.

What are we asking?

Please join with us in signing, and circulating, the public statement.

At this time, EE is asking co-ops to inform and educate staff and consumers. Eventually, we hope to enter into dialogue with the companies who are using the TransFair seal on their products in order to explain to them that authentic Fair Trade means support for small farmers, not plantations and corporations. These conversations will ultimately affect what certification will look like and how consumer/citizens think about fair trade and the future economic, social, and political prospects of small farmers.

For more information on Equal Exchange's perspective on the differences between Authentic Fair Trade and what TransFair USA is doing, please read Rink Dickinson's views. Read a producer point of view.

The Wedge fully supports and will remain engaged with small farmers and with the international Fair Trade system. We will keep you posted on events as they unfold.

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