The High Cost of Certification
Posted in: Opinion
IB -
The problems are not from having been spun off. The challenges are inherent in the Fairtrade model.
You quote one pervasive misunderstanding of the Fairtrade process, "The vast majority of the money goes back to the farmers ... " While it is true that the co-op purchases the coffee from the farmers, paying them the Fairtrade minimum, the premium that gets paid goes to the co-op and is typically used to cover overhead and invest in infrastructure to increase production.
There are far more subtle forces at play here that rarely get looked at or reported. One thing that most people don't understand is that the amount of labor, water, and energy required to produce coffee to the Fairtrade quality standard is significantly greater than that which the farmers are normally used to.
In fact, the labor demands (as reported in the thesis) are so much greater that coffee farmers now spend a significant portion of their income on food, whereas before they would grow it themselves and hunt and fish for it. Apparently, the price of rice has trebled in the last few years. Thus, while there has been a rise in income, an unintended consequence is that now the farmers are dependent on the world food market. Whereas now they might be making more than the per capita income, they are working far harder for it and many find themselves with expenses they never faced before - and are, in actual fact, poorer for it.
There are other trade-offs - while the farming practices may be organic, the associated production practices may not be sustainable because of the increases in water usage and energy. I am sure these figures are not properly accounted for in the the ASEAN figures you link. Another way in which they are an example of poor statistics is that they don't indicate how many farmers are involved from year to year and don't include the number of dependents. So, we don't know anything about how much of the growth in sales is due to an increase in the number of farmers.
These are just a few examples of why the situation is not simple: there are no simple answers, no simple fixes. The blindness is built into the system, which is a lot about forcing western consumer culture values on to farmers in producing countries. Furthermore, the social and economic contract is essentially the same worldwide: it is culturally insensitive and therefore cannot be equitable.
The real issue is that most consumers don't take the time to go an look for themselves in any depth or examine the situation with any critical facility. We want to believe that by spending a few extra bucks at the grocery store that we can make a difference in the lives of farmers. Sometimes it works that way - but many times it does not. Who benefits most from Fairtrade (in coffee)? The companies near the top of the supply chain who, between them account for more than 80% of the increase in value of the commodity once it is exported.
I maintain that while "Fair Trade" as it is currently constituted by FLO/Fairtrade, Rainforest Alliance, et al, may A part of AN answer, it is not THE answer. However, the institution of Fairtrade has garnered so much weight and prestige from unthinking adherents that other legitimate attempts to address the very real issues at stake are not given a chance in the market because of the suasion of an informal "moral mafia" that has arisen around Fairtrade and organic certification.