Capitalism Chews Over Fair Trade

2 04 2012
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Capitalism chews over fair trade

Fairtrade accreditation is the current big thing for the major food companies, but fair’s not always fair. What big corp fair trade products are greenwash and which should we be buying?

Fair trade coffee

Starbucks, Cadbury, Sainsbury and other big brands are stocking more and more fairly traded produce. Photograph: NewsCast

So now every cappucino, latte and espresso in Starbucks is Fairtrade. All Cadbury’s Dairy Milk is too. So are all the bananas in Sainsbury’s. The British government isputting your tax money into the Fairtrade Foundation‘s work with producers in the poorest countries. What’s left to fight about?

The ethics were pretty simple in the early days of Fairtrade. It was a rebel brand; every penny spent was an easy poke in the eye for capitalism and that nasty, greedy Man. But, just as happened with organic, the Man saw that there was money in such fine thoughts, and started to stock Fairtrade. In the late 90s the twirly-whirly green and blue hippy label started appearing on the shelves in the Co-op and Sainsbury, and in 2005 even Nestlé, food campaigners’ great Satan, launched a Fairtrade coffee.

So should we celebrate?

If major global corporations have taken to fair trade, the argument that it’s better to pay producers a living wage is winning. Right? If Cadbury can do it with their most popular product maybe Nestlé and Mars will follow. Note that the price of Dairy Milk is staying the same. Perhaps the big corporations are learning that it’s worth sacrificing a little bit of profit for ethical gain.

Hmm. Capitalism has, as you may have noticed, an unnerving habit of assimilating challenges to it, of turning radical innovations to its own advantage. Hence the string of buy-ups of supposed orthodoxy-challenging, ethical businesses over the years (Innocent, Green and Blacks, Pret a Manger, Ben and Jerry’s, The Body Shop: the list goes on and on).

I can’t think of many examples where that sort of deal has brought any lasting change to the big corp that did the swallowing: generally the original ethical raison d’etre of the acquisition turns out to be just a nifty bit of marketing. And deals with the grateful sellers don’t always survive corporate restructurings or boardroom clear-outs. If Kraft does succeed in its attempts to buy Cadbury, as ongoing talks suggest it could, which of the chocolatier’s non-profit-generating promises will the Americans keep?

So what’s the ethically-challenged consumer to do? Clearly, when these deals happen, you need to take a cold look behind the hype (on this company blog, for example, Cadbury may give you a Fairtrade T-shirt!!) and examine each one very carefully.

Cadbury Schweppes bought Green and Blacks organic, fairly traded chocolate four years ago. Now Cadbury turns one of its many brands – admittedly, Britain’s most popular chocolate bar – Fairtrade. Why not the others? Why not a Fairtrade Crunchie, Wispa and Creme Egg? What, exactly, is the argument against paying people a decent, stable rate for their crops and helping them make their business is sustainable? This is serious stuff – child labour and even slavery is reportedly endemic in West African cocoa farms.

Cadbury says: “This is a step in a long journey for Cadbury and the hope is that it’s just the start.” What does that mean, exactly? Buy the Dairy Milk and maybe we’ll do the right thing by all the children on the cocoa farms?

Going Fairtrade doesn’t mean turning nice all over, of course. Cadbury still puts azodyes in Creme Eggs. According to the union Unite, they have just reneged on a pay deal, despite rising sales this year. They want to move a lot of British jobs offshore. There may be a strike.

Greenwashing is the term used to describe that PR scam where a big corporation boasts about a small ethically-minded change (a petrol company puts solar panels on filling station roofs, say) so it can get away with doing everything else (selling petrol) just as it did it before. Pharmaceutical corporations are adept at it. During the great coffee wars early this decade, the four biggest global coffee companies greenwashed themselves by changing part – often a very small part – of their product line to Fairtrade, or the Rainbow Alliance certification.

Nestlé notoriously pushed its profit margin on coffee up to 26% when prices collapsed at the end of the 1990s, while millions of farmers and their families dropped into poverty. Roundly criticised by Oxfam and others, in 2005 Nestlé launched a Fairtrade certified coffee: Partner’s Blend – “coffee with a conscience”. When I last saw some in a supermarket it was priced at nearly double the shop’s own-label Fairtrade brand – which may explain why Partner’s Blend is hard to find.

It is just one of 640 Nestlé lines and accounts for far less than 1% of Nestlé’s total global coffee purchases. If Partner’s Blend is coffee that “helps farmers, their communities and the environment”, why should we not assume that the other 99% of Nestlé’s coffee does not help them at all?

So – what big corp Fairtrade should you buy? I’d love to know your views. Here’s my rule of thumb:

Don’t buy the new green or fairly traded big brands unless they are plainly a significant part of the company’s business, and you can assume your cash might act as a lever to persuade other manufacturers the same way. And don’t trust go-it-alone “ethically sourced” rubrics – if the label is not Fairtade or Rainforest Alliance, the scheme is usually not as good. Or it’s a spoiler.

So I would support the Co-op, who have led the way in turning all their own-brand coffee, tea, sugar and chocolate Fairtrade – they deserve it. I would not buy Nestlé, in any shape or form. I’m not tempted back over Starbucks’ doorstep yet, because I’m still cross at how long they prevaricated over sourcing all their coffee in a provably ethical manner. (While campaigning during the coffee crisis in 2002, I remember arguing with a Starbucks exec who said with supreme smugness that there was absolutely no need for the chain to go Fairtrade because the company was inherently decent in all its dealings with both customers and suppliers “That goes with our name”. A little later Starbucks tried to trademark the names of Ethiopia’s most ancient coffee varieties.)

But I am going to start buying Green and Black’s again because I think we can accept that Cadbury (who now own the brand) are making more than token changes to their business. Dairy Milk? – I can’t stand it. I’d rather eat Galaxy. But that’s owned by Mars – who own what may be the world’s most widely-stocked brand, M&Ms, and produce no Fairtrade chocolate at all.

There is some trenchant criticism among economists of the Fairtrade model: there are intrinsic problems over how it expands to benefit an entire industry, rather than some farmers at the expense of others. But the Fairtrade Foundation appears to be reacting to this in interesting ways. Fairtrade 2.0 is on its way, and not before time.

  • © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.



Ethical traveller: Do “slum tours” profit off the poor?

12 03 2012

07 March 2012 | By Lori Robertson

Children play in the Favela do Metro shantytown in Rio de Janeiro, Brazil. (Victor R Caivano/Associated Press)

Read the rest of this entry »




Resource Table for Fair Trade in (NYC)

12 03 2012

Fair Trade Organizations

Fair Trade Corporations (Case Studies)

- Local (New York City)

  1. New York City Fair Trade Coalition http://nycfairtradecoalition.org/
  2. Fair Trade Federation NYC www.fairtradefederation.org/
  3. Fair Trade Resource NYC http://www.fairtraderesource.org/about-2/who-we-are/
  4. Corporate Responsibility New York http://www.csrnyc.com/home/currentnews.html

National

       1.     Fair Trade USA

          http://fairtradeusa.org/products-partners

 

1. Major Rally in Times Square Calls on Hershey Company to Stop Using Child Labor Chocolate

http://www.greenfestivals.org/press/major-rally-times-square-hershey

2.     Case Studies on Child Labor in the Cocoa industry

http://nycfairtradecoalition.org/tag/cocoa/

3. NY Gets Friendlier to Socially Responsible Business

http://www.wnyc.org/articles/wnyc-news/2011/dec/13/new-york-enacts-benefit-corporation-to-attract-socially-responsible-business/

4. Fair Trade Chocolate: Sweet!

Child slavery is rampant in the chocolate industry. To protect children, farmers, and the environment, make your chocolate purchases fair trade.

http://www.greenamerica.org/livinggreen/chocolate.cfm





Free trade vs. Fair trade

22 02 2012

http://www.globalenvision.org/library/15/834

This website contains specific cases regarding
both Free Trade and Fair Trade.




Obama pushes manufacturing, fair trade with China

18 02 2012

http://www.cnn.com/2012/02/17/election/2012/obama-boeing/index.html?iref=allsearch

Obama pushes manufacturing, fair trade with China

By Dan Merica and Alan Silverleib, CNN
updated 3:41 PM EST, Fri February 17, 2012

(CNN) – President Barack Obama trumpeted his manufacturing and export agenda Friday, telling a crowd in Washington state that the American economy is poised for a strong, long-term recovery with the right kind of government assistance.

“The last few decades haven’t been easy for manufacturing,” the president said during a tour of Boeing’s assembly plant in Everett. But “in this country we don’t give up even when times are tough.”

Americans “don’t have to sit there and settle for a lesser future,” he asserted.

Obama’s remarks were made on the third day of a West Coast swing mixed with policy announcements and political events. Among other things, he discussed the need to provide greater export financing to American manufacturing companies while expanding support for small business.

He hit on the need to ensure fairer trading practices with China — a political hot button in the current campaign. Several of Obama’s Republican critics have attacked the administration for failing to do more to reduce America’s trade imbalance with the growing Asian power.

“I will go anywhere in the world to open up new markets for American products,” Obama said. “If we have a level playing field, America will always win because we have the best workers.”

The speech — built on the administration’s “Blueprint for an America to Last” — came three days after a litany of administration officials, including the president and Vice President Joe Biden, met with Chinese Vice President Xi Jinping in Washington.

During the speech, the president highlighted his promise to double American exports over five years — a goal he said is on track to be reached ahead of schedule.

Obama pushed Congress in his speech to reauthorize the U.S. Export-Import Bank, the official credit agency tasked with helping to finance the foreign purchase of goods from American companies who are unable to accept the credit risk themselves. In 2011, the bank provided $41 billion in financing to over 3,600 U.S. companies.

According to a White House news release, these “programs come at no cost to U.S. taxpayers, as the (bank) not only operates on a self-sustaining basis, but it has returned well over $3 billion to the U.S. Treasury since 2005.”

Obama also said he wants to help American firms get matching support to counter financing that other multinational companies are receiving from their governments. He encouraged Congress to reform the tax code to discourage overseas manufacturing while providing additional support to manufacturers that make cutting edge products or set up shop in economically depressed areas.

Obama was scheduled to visit two campaign fundraisers following his visit to Boeing.




Oxfam

18 02 2012

http://www.oxfam.org.uk/shops/content/fairtradefaqs.html

 

Oxfam is one of the leading NGOs that is committed to reduce economic inequality and poverty

in the third world. One major difference that Oxfam has from other IOs and NGOs is that it attempts to

build a sustainable economy based on fair trade in the underdeveloped nations instead of giving direct aid to them.

 

This information page provides a thorough view on

what is fair trade and what Oxfam strives to achieve.

 

 




Making the Case for Corporate Social Responsibility

18 02 2012

http://culturalshifts.com/archives/181

 

This article is very (I mean really really) long, but it contains a lot of useful information about fair trade corporations.

It goes over four dominant fair trade corporations in the market – such as the body shop and starbucks (the latter which is slightly

controversial) – and their practices of corporate responsibility in the global market.

 

 

 




Fair Trade in Bloom

18 02 2012

http://www.nytimes.com/2007/10/02/business/worldbusiness/02trade.html?pagewanted=all

This article discusses about the increasing demand for fair trade products (in this specific case, coffee) from a global perspective.

Those of you who do not have access to NYT:

Fair Trade in Bloom

Lalo de Almeida for The New York Times

The fair-trade market is still small, but fast-growing, and it has been a boon in places like Varginha, Brazil, where coffee roasters like Café Bom Dia, above, work directly with small farmers.

By ANDREW DOWNIE
Published: October 2, 2007

VARGINHA, Brazil — Rafael de Paiva was skeptical at first. If he wanted a “fair trade” certification for his coffee crop, the Brazilian farmer would have to adhere to a long list of rules on pesticides, farming techniques, recycling and other matters. He even had to show that his children were enrolled in school.

“I thought, ‘This is difficult,’” recalled the humble farmer. But the 20 percent premium he recently received for his first fair trade harvest made the effort worthwhile, Mr. Paiva said, adding, it “helped us create a decent living.”

More farmers are likely to receive such offers, as importers and retailers rush to meet a growing demand from consumers and activists to adhere to stricter environmental and social standards.

Mr. Paiva’s beans will be in the store-brand coffee sold by Sam’s Club, the warehouse chain of Wal-Mart Stores. Dunkin’ Donuts, McDonald’s and Starbucks already sell some fair trade coffee.

“We see a real momentum now with big companies and institutions switching to fair trade,” said Paul Rice, president and chief executive of TransFair USA, the only independent fair trade certifier in the United States.

The International Fair Trade Association, an umbrella group of organizations in more than 70 countries, defines fair trade as reflecting “concern for the social, economic and environmental well-being of marginalized small producers” and does “not maximize profit at their expense.”

According to Fairtrade Labelling Organizations International, a group of fair trade certifiers, consumers spent approximately $2.2 billion on certified products in 2006, a 42 percent increase over the previous year, benefiting over seven million people in developing countries.

Like consumer awareness of organic products a decade ago, fair trade awareness is growing. In 2006, 27 percent of Americans said they were aware of the certification, up from 12 percent in 2004, according to a study by the New-York based National Coffee Association.

Fair trade products that have experienced the biggest jump in demand include coffee, cocoa and cotton, according to the Fairtrade Labelling Organizations.

Dozens of other products, including tea, pineapples, wine and flowers, are certified by organizations that visit farmers to verify that they are meeting the many criteria that bar, among other things, the use of child labor and harmful chemicals.

There is no governmental standard for fair trade certification, the same situation as with “organic” until a few years ago. Some fair trade produce also carries the organic label, but most does not. One important difference is the focus of the labels: organic refers to how food is cultivated, while fair trade is primarily concerned with the condition of the farmer and his laborers.

Big chains are marketing fair trade coffee to varying degrees. All the espresso served at the 5,400 Dunkin’ Donuts stores in the United States, for example, is fair trade. All McDonald’s stores in New England sell only fair trade coffee. And in 2006, Starbucks bought 50 percent more fair trade coffee than in 2005.

Fair trade produce remains a minuscule percentage of world trade, but it is growing. Only 3.3 percent of coffee sold in the United States in 2006 was certified fair trade, but that was more than eight times the level in 2001, according to TransFair USA.

Although Sam’s Club already sells seven fair trade imports, including coffee, this will be the first time it has put its Member’s Mark label on a fair trade product, which Mr. Rice of TransFair called “a statement of their commitment to fair trade.”

He added, “The impact in terms of volume and the impact in terms of the farmers and their families is quite dramatic.”

Michael Ellgass, the director of house brands for Sam’s Club, said the company could afford to pay fair trade’s premium because it has reduced the number of middlemen.

Coffee usually passes from farmers through roasters, packers, traders, shippers and warehouses before arriving in stores. But Sam’s Club will buy shelf-ready merchandise directly from Café Bom Dia, the roaster here in Brazil’s lush coffee country.  –> minimizing the cost by eliminating extensive processing lines and  reducing transaction fees

“We are cutting a number of steps out of the process by working directly with the farmer,” Mr. Ellgass said.

Some critics of fair trade say that working with thousands of small farmers makes strict adherence to fair trade rules difficult. -> counterargument for Pro-free trade

Others argue that fair trade coffee is as exploitive as the conventional kind, especially in countries that produce the highest-quality beans — like Colombia, Ethiopia and Guatemala. Fair trade farmers there are barely paid more than their counterparts in Brazil, though their crops become gourmet brands, selling for a hefty markup, said Geoff Watts, vice president for coffee at Chicago’s Intelligentsia Coffee and Tea, a coffee importer.

But in Brazil, a nation with little top-grade coffee, the partnership between small producers and big retailers is a better blend, Mr. Watts said.

Fair trade coffee farmers in Brazil are paid at least $1.29 a pound, compared with the current market rate of roughly $1.05 per pound, said Sydney Marques de Paiva, president of Café Bom Dia.

Most coffee farmers are organized into cooperatives, and some of that premium finances community projects like schools or potable water.

Like most of his cooperative’s 3,000-odd members — and three-quarters of coffee growers worldwide — Mr. Paiva, the coffee farmer (no relation to Mr. Marques de Paiva), farms less than 25 acres of land. He produces around 200 132-pound sacks for the co-op, with 70 percent of that sold as fair trade to Café Bom Dia.

The company would buy more if there were more of a market for fair trade coffee, it said.

The fair trade crop brought Mr. Paiva about 258 reais ($139) a sack, compared with about 230 reais for the sacks that were not fair trade. For the latest crop, that meant an additional 3,920 reais ($2,116) for him, a huge sum here in the impoverished mountains of Minas.

“It’s been great for us,” Mr. Paiva said with a huge, toothless grin. “I call the people from the co-op my family now.”

Mr. Ellgass, the Sam’s Club executive, said the chain hoped to expand its fair trade goods.

So do Brazil’s farmers. “Everybody is doing their best to come up to standard so we can sell our coffee as fair trade,” said Conceição Peres da Costa, one of the co-op’s growers. “Everybody wants to earn as much as he can.”




NYCFTC

18 02 2012

http://nycfairtradecoalition.org/about-2/fair-trade/

 

NYCFTC is an all volunteer grassroots organization educating consumers

on the value and importance of fair trade and promoting fair trade businesses in NYC.

 

  • This website contains a succinct, but well-organized introduction about Fair Trade.

For our group project,  it would be interesting to research this kind of fair trade coalitions in the city,

and their (practical) impact on the NYC’s economy.