Last time I was talking about Labeling Fables I floated the idea of unveiling some of the most prominent labels so you know what you are buying in the grocery store. Well, here is installment #1: Starting with one of the most famous labels around: Fairtrade. Chances are, you know it stands for fair trade (duh.) and treating producers more fairly in the value chain. But how exactly does that work?
What is the label’s motto/what does it stand for?
Fairtrade is “a global organization working to secure a better deal for farmers and workers.”
With this aim, it is not a trading company per se, but only certifies (through the initial certification and regular auditing processes) that producers and traders adhere to its standards in fair trading practices.
What does the label guarantee?
- Its standards ensure that producers receive prices that cover their average costs of sustainable production – to achieve that goal, producers receive guaranteed minimum prices independent of world market prices for their products (if market prices are higher, producers should receive the current market price or the negotiated contract price);
- In addition, the producers – only smallholder farmers that are organized democratically, e.g. in cooperatives, are admitted to the standard – are awarded an additional Fairtrade Premium which can be invested in projects that enhance social, economic and environmental development;
- In hired labor situations, companies have to pay decent wages, guarantee the right to join trade unions, ensure health and safety standards and provide adequate housing where relevant in order to be allowed to use the Fairtrade label;
- Forced labor and child labor are prohibited;
- Environmentally sound agricultural practices, e.g. with regard to minimized and safe use of agrochemicals, proper and safe management of waste, maintenance of soil fertility and water resources and no use of genetically modified organisms, are required, and organic products receive a higher minimum price;
- The system enables pre-financing for producers who require it;
- It facilitates long-term trading partnerships and enables greater producer control over the trading process;
- And it sets clear core and development criteria to “ensure that the conditions of production and trade of all Fairtrade certified products are socially, economically fair and environmentally responsible.”
What does it not guarantee?
- Though it promotes environmentally sound practices and Fairtrade Premiums are often used to train producers in organic and sustainable techniques like composting and integrating recycled materials, its products are not certified as organic per se.
- If you buy a “composite” product with several ingredients with a Fairtrade label, that doesn’t necessarily mean that 100% of the ingredients stem from Fairtrade-certified sources. In fact, the label just requires that all ingredients for which Fairtrade standards exist be sourced through this system, as well as that 20% of the total ingredients are Fairtrade-certified (this is also linked to the fact that Fairtrade certification of producers is limited to the countries of the Global South).
How accountable is it?
It’s about as legit as it gets. The system separates its standard-setting (FLO) and certification (FLO-CERT) bodies, and FLO-CERT is itself certified according to the international standard of certification body ISO 65 (meta, right?). All participating producers are inspected on-site initially – which can last up to 7 weeks depending on the size of the farm – and audited annually.
What products can you buy with it?
Mainly agricultural raw materials – the commodities it started with were bananas, cocoa, coffee, cotton, sugar, tea. Since, the product range has steadily expanded and now includes also flowers, fresh fruit, honey, gold, juices, rice, spices and herbs, wine, and of course composite products such as chocolate.
Are there drawbacks?
Oh dear, this might be a topic for a whole different post – as one of the most widespread and well-known ethical labeling organizations, Fairtrade hasn’t been spared with criticism. Basically, because it is based on this very extensive auditing system, all participants that want to enter the system have to pay a licensing fee, which can be prohibitive for the poorest farming communities – the movement’s purported targets! In addition, it is unclear whether the majority of the fair trade premium that consumers pay actually reach the farmers it is supposed to help – some studies only find a relatively small impact. Furthermore, since certified producers still have to market their products and demand for fair trade goods so far is rather small, it is very possible (and even likely) that they will only be able to sell a part of their harvest as actual labeled Fairtrade coffee and sell the rest to market conditions despite having gone through the trouble of following all the standards. This is a pretty well-reasoned critique of fair trade.
Verdict – Top or Flop?
Let’s differentiate. I would advise to always buy fairly traded products when possible. If you are in your supermarket and are deciding between the no-name coffee brand and the one with a Fairtrade label, I would definitely choose the labeled one. The only caveat I would raise is that the Fairtrade label, while very rigorous and easily recognizable, is not the only source of fairly traded goods you have access to – if you go to any of the smaller One World stores (or also many stores specialized in organic and sustainable products), you will be able to have access to goods without the label that are nevertheless produced according to the general idea of fair trade, just without having paid the licensing fee.
What do you think about the Fairtrade label? Top or Flop? Do you buy it? Have you heard of the criticism?