Saturday, April 07, 2007

World Fair Trade Day Discussion Topic

My friends at Fair Trade Resource Network have created some awesome resources for World Fair Trade Day, May 12. Yes, I'm slightly biased but check them out: they have beautiful images, useful tools and Fair Trade enthusiasm and commitment that is really inspiring. Notice, for instance, the image on this year's poster (which you can get for free for your community event). FTRN made a "fair trade" and donated scholarship fees to the school the young girl, Soshi, attends.

These are just the kinds of stories that help get folks excited about Fair Trade. Over the past several years steam has been building for community events around the United States on May 12. Let's do more than just buy Fair Trade let's live Fair Trade lives in our Fair Trade communities. Get the resources and let's share ideas for creating fun, festive and welcoming events.

One suggestion is to gather folks to discuss items of concern to the movement. Below is an excerpt of my book Fair Trade: Beginner's Guide. Chapter 9 focuses on the "Future of Fair Trade." You can use this chapter to get the conversation started and post discussion and debate here.

The future of Fair Trade

"I started this guide with a memory of the 2005 Fair Trade Futures
conference, a gathering of 750 people from twenty countries who
were interested in what Fair Trade could mean to them, their
families, and communities of the world into the future. The
conference was conceived for many reasons, not least of which
was the need for a time and place to contemplate the emerging
challenges and potential fault lines in the movement. The issues
arising from the success of Fair Trade are sometimes complicated
and not easily resolved, reflecting the complexities of our world
today and, “the blurring of previous boundaries between the economic
sphere and the political, social, and cultural realms” of our
lives as consumers.

The organizers of the Fair Trade Futures conference were
interested in how “Living a Fair Trade Life” meant achieving
social justice and change through the market. They – myself
included – wanted to create the chance for individuals whose life
values and personal vision match those of Fair Trade to build and
deepen the vision of the Fair Trade movement. We also welcomed
mainstream companies with only a limited offering of Fair
Trade products. As is the case in most efforts for social and economic
justice, there is a tension between “revolutionaries” and
“reformers.” In the Fair Trade movement boundaries have sometime
been drawn between “100 percenters” and “mainstreamers,”
or between “for profit” and “non-profit” organizations.

Into the future, diversity could be an asset to the movement.
The complexities and controversies of Fair Trade reveal the
vibrancy of the movement. As Valerie Orth of Global Exchange
notes, “People are constantly questioning Fair Trade. Infighting
isn’t good but pushing each other is. Fair Trade can be confusing:
Are we marketers or are we working for farmers?” For Fair Trade
to even have a future it must be dynamic, committed to critical
questioning, open to new dimensions, and ready for change.

The promise of technology

Consumers can join the debate and help the movement find solutions
to the conundrums that are stumping the Fair Trade leadership.
We are in the twenty-first century, so let’s leave politics and
philosophy for the moment and start with technology. Two
recent initiatives on the Fair Trade scene are offering the movement
new pathways to increase the value craft producers receive.
They are also raising questions about the role of Fair Trade intermediaries
who distribute and market the products of artisans.

Catalog Generator

Anyone who has purchased a product from a website, bid during
an eBay auction, or signed up for an on-line dating service has
taken part in e-commerce. As we saw in chapter six, the Internet
is providing a new channel for the sale of Fair Trade products. It is
also serving as a driving force in connecting fair traders through
listservs, electronic mail, blogs, and the like. The Internet is clearly
one of the best aspects of globalization.

A recent U.N. Development Programme survey of initiatives
in Nepal found that income and employment for small, micro,
and medium-size enterprises is dramatically increased thanks to
e-commerce. “Firms using [e-commerce] reported sales generated
via inquiries to their sites averaging $1,103 per month in 2004
and growing dramatically to $1,852 in July of 2005.”

Fair Trade visionary Daniel Salcedo, along with an international
team of programmers and producers, has embraced a technological
advance known as CatGen, which stands for Catalog
Generator. The CatGen platform, which is promoted by
Salcedo’s non-profit organization, Peoplink, allows producers to
create their own on-line catalogs which can process orders
directly from customers. The CatGen technology requires a
laptop, open source software, and a phone line. In an era of cell
phones and satellites, these are resources even producers in the
remotest locations can access.

In the realm of Fair Trade, such technology allows producers to
process orders without working through wholesalers – even Fair
Trade importers. And, it allows producers to capture more value
along the chain for themselves. Suggesting that the “Fair Trade
movement is built on misperceptions ... that the artisan receives
most of the value,” Salcedo calls into question the role of Fair
Trade organizations who warehouse, export, import, market, and
ship products. Salcedo believes these F.T.O.’s effectively serve as
a “softer face” of the conventional supply chain while retaining
the majority of dollar value in Fair Trade transactions. With the
availability of technology and shipping services, producers can
now control more of their operations. Instead of serving as ethical
intermediaries, Salcedo posits the role of “infomediaries” for Fair
Trade organizations. Building on the generation-old reputation of
Fair Trade credibility and adhering to Fair Trade principles, fair
traders can offer transparency in a marketplace crowded with
questionable sourcing. F.T.O.’s can also help build relationships
between producers and consumers by maintaining referral systems
that drive particular constituents, such as students or a women’s
church group, to a “metamarket” of preferred producer partners.

Although retaining more value in countries of origin is clearly
a laudable aim, it sometimes bumps up against the realities of
implementation. We have seen throughout this guide that Fair
Trade producers struggle against the constraints of poverty and
isolation. Salcedo tells a great tale of a solar powered cell phone
downloading orders on a Brazilian mountaintop. However, by
virtue of the fact that some Fair Trade cooperatives and associations
have to attend to critical concerns related to the livelihoods
of their artisans, they may not have the capacity for real-time
negotiated invoicing and other enhancements provided by new
technologies and services.

The U.N.D.P. report from Nepal notes that business leaders,
such as Bill Gates, Michael Dell, and Steve Jobs, never graduated
from college, suggesting that in developing countries “a relatively
inexperienced group of young information technology professionals
could, with the proper tools, create employment for themselves
and [small scale enterprises].” However, the report goes on
to suggest that women in particular benefit from e-commerce
employment. The overall literacy rate for women in Nepal is only
thirty-five percent. While there is clearly potential for utilizing the
power of technology in developing countries, the producers of
traditional concern to Fair Traders – those who are socially marginalized,
for example – may need further development assistance
before being able to become e-commerce agents.

Another concern about the use of CatGen is that it is open to
any producer group whether or not they meet Fair Trade standards.
Salcedo dismisses this concern, saying that groups, such as
I.F.A.T., can police the membership of their metamarkets and can
remove any groups that aren’t in compliance. However, if the role
of F.T.O.’s is to provide transparent information about the veracity
of the producer groups, their communication strategies may
get muddied as they seek to distinguish between deserving producer
groups. As I was navigating around the various sites supported
by CatGen, I often had a difficult time distinguishing
which group was or was not classified Fair Trade by a third party
such as I.F.A.T. Although Salcedo, a long-time development
practitioner, is more interested in getting value to producer countries
than making distinctions as to who is inside or outside the Fair
Trade system, I argue this distinction is crucial for consumers
trying to make their way through the crowded marketplace. This
is to say that the CatGen technology is an important lightning rod.
If the future of Fair Trade is to be relevant, we need to debate and
experiment with new approaches to, as Salcedo says, “take advantage
of opportunities [within] systems to get as much of the value
back to the producer [as possible].”

Wage Guide

Another technology-based tool for artisans was conceived by a new
generation of fair traders, the founders of World of Good and its independent
non-profit, the World of Good Development Organization
(W.O.G.D.O.). The mission of World of Good (W.O.G.), the business,
is to make purchasing Fair Trade artisan products easy for the
consumer, to help artisans and their communities, and to educate
consumers about the benefits of Fair Trade. Ten percent of the
company’s net profits are reinvested dollar for dollar in the artisan
communities in the form of infrastructure and health projects.

Priya Haji and the other founders of W.O.G. share a zealous
commitment to helping artisans access the $55 billion dollar
American gift market. W.O.G. creates unique shopping opportunities
by offering kiosks filled with appealing Fair Trade items to
mainstream retailers, such as Wild Oats food stores. With more
than a thousand “stores within a store,” consumer exposure to Fair
Trade products is growing rapidly. W.O.G.D.O. also aspires to set
clear, transparent operational standards that will encourage
mainstream retailers to adopt fair trade purchasing and sourcing
practices, thereby improving the lives of thousands of Fair Trade
artisans around the world.

A tool for such standard setting is the Fair Trade Wage Guide,
provided on a straightforward, user-friendly website that helps
artisans and traders calculate fair wages. As pointed out in chapter
three, the tremendous number of variables involved in handcraft
production – including materials used, time spent, and producer
location – has made identifying a standard price for crafts difficult.
The Fair Trade Wage Guide addresses one element of this
dilemma by creating a methodology for calculating fair wages. By
providing standardized information, the guide helps ensure that
artisans are fairly compensated and also “creates an auditable trail
of the transaction for a Fair Trade craft purchase ... and [reinforces]
the movement to create a fair trade craft product label.”

I visited the Wage Guide website to test out the hypothetical
situation of paying an artisan in Madagascar for the labor involved
in making handmade Fair Trade greeting cards. In four straightforward
steps, I filled in variables related to the materials and techniques
used to create a product. I ended up on a page that
evaluated whether or not I had paid a living wage relative to
Madagascar’s national standards for a minimum wage and the
international poverty line. In this case, my projections were well
below a living wage. The guide gave me suggestions for making
increases. The suggestions were based on the results of a test conducted
in cooperation with Mercado Global in Guatemala. As the
website explains:

Representatives and artisans realized how long it was taking to
complete the intricate knotting design work [of a test product] ...
[T]he artisans and representatives determined that by cutting the
knotting from five inches to three inches in length, they were
able to lessen labor time without decreasing the value of the
product ... Therefore, the artisans were able to make more of the
product in less time, increasing their wage per piece.

This type of advice alongside verifiable wage standards
empowers artisans to negotiate with both Fair Trade and conventional
traders.

If any wholesaler – Fair Trade or not – is able to use the guide,
then the lines between Fair Trade and conventional traders may
be blurred. As with the CatGen situation, important distinctions
can be lost if consumers think they are supporting Fair Trade
enterprises but instead are giving their business to mainstream
companies with limited commitments to Fair Trade. Then again,
increasing market access is a major priority for artisans. Much like
the concerns of mainstreaming labeled food products discussed in
chapter three, the Wage Guide calculator opens up debate in
the artisan sector as to how to distinguish between mission-based,
100 percent Fair Trade organizations and commercial companies.

The Wage Guide could also create situations where traders will
only pay a minimum price because the calculation created holds
up the floor price as acceptable. Here, too, this is not a critique
limited to artisan products. As Equal Exchange co-founder and
current chief executive officer of the Oké USA Fair Trade fruit
company, Jonathan Rosenthal points out, “There is a huge
inequality still [in the Fair Trade system] ... to pay producers $1.26
or even $1.50 for a pound of coffee that is selling for $10, nothing
is fair about that. Eighty percent of the value is not going to the
producer and the labor certainly is eighty percent of the product.”
Artisans could find that traders will not negotiate beyond the minimum
daily wage, although such a minimum may not, given varying
circumstances, provide for a sustainable livelihood.

This potential pitfall invites a new opportunity for dialogue and
partnership among fair traders, as well as continued analysis into
the nature of current trading mechanisms. If equipped with shared
information and mutual understanding, artisans and traders could
come together around the Wage Guide, and it could develop into
another step in the right direction toward poverty reduction and
empowerment. As W.O.G.D.O. tests the tool with artisans and
traders on several continents, it has gathered an advisory committee
to help inform the process and the final result. One participant
in the process, Yannina Meza from Peru, has declared that “the
Fair Trade Calculator is a dream come true!” With engaged
advisors and responsive consumers, the dream may very well be
realized.

Although increasing income opportunities and promoting
transparency are, as we have seen throughout the guide, cherished
aspects of Fair Trade, the Wage Guide and CatGen have encountered
some resistance. The roles of traditional Fair Trade organizations
may diminish if artisans are able to set their own prices
based on data provided by the Wage Guide. Fair Trade organizations,
often based in the Global North, have a long, distinguished
history of contributing to the capacity of, taking risks for, and
investing in Fair Trade producer partners. Fair Trade champions
have traditionally put the concerns of disenfranchised producers at
the center of their efforts. As is often true with managing change,
accepting new approaches and shifting activities and risks can be
uncomfortable.

Multiple meanings of certification

Earlier we considered the role of the F.L.O. product label in the
history and current practice of the movement. The implications of
the mainstreaming of Fair Trade cannot be overstated and are central
to the future development of the movement. Although Yale
University
senior researcher Michael Conroy calls certification,
“market-based voluntary corporate accountability ... with teeth,”
the emergence of a label for some Fair Trade food products has
proven to be a mixed blessing. By virtue of the fact that “a large
part of [the] growth [in the Fair Trade market] would not have
been possible without a growing number of commercial partners
becoming involved through the Fairtrade labeling schemes,” Fair
Trade is now confronted with tensions that are a product of its
success.

We have seen that mainstream companies have adopted some
products without embracing Fair Trade as a business model.
Purists, who wish to preserve the highest bar possible for the Fair
Trade concept, see this as a dilution of the Fair Trade ideal. With
a particularly jaundiced eye toward multinational corporations,
some fair traders also see the adoption of the label on a few
product lines as an attempt to “fair wash” the deeper realities of
business operations or, worse, to dominate the fledging Fair Trade
market as they dominate the conventional value chain. For its
part, F.I.N.E. identifies that labeling organizations must “find
innovative ways to co-operate with multinationals and still continue
to maintain a critical perspective wherever and whenever
the corporations act to the detriment of people and/or the
environment.”

No doubt multinational corporations – past and present – have
been guilty of horrific practices. Our society is also replete with
attempts to capture customers through deceptive marketing.
Corporations are filled with individual human beings, so they are
filled with opportunities for redemption and change, as well as for
deception and exploitation. Consumers have to evaluate current
policies and do business with those companies that most closely
match their personal values and priorities. Organizations such as
Net-Impact and the Business Ethics Network seek to help ethically
minded entrepreneurs influence the corporate world.

Within Fair Trade’s own quarters, there are also concerns that
the national certifying bodies of F.L.O., when awarding a license
to use the Fair Trade labels, are not setting their standards high
enough. National initiatives have been accused of being satisfied
with adherence to the fair price aspect of fair trading without
strictly applying the other principles. Because some corporations,
when pushed on issues such as the quantity of their annual Fair
Trade purchases, cite confidentiality and propriety information as
a reason for not revealing actual commitments to Fair Trade, the
principle of transparency is also called into question. Although
certifiers, such as TransFair USA, are responding to some specific
questions related to the certification system and farmer empowerment,
what the label actually means to the company licensing its
use and the consumer using it to make meaningful purchasing
choices is of particular concern. Brian Backe, who leads the
Domestic Programs Support Unit of Catholic Relief Services after
more than a decade with SERRV International, laments:

When people talk about fairness their minds go to money and
economic exchange, but in my estimation the money is not the
most important. The relationships, the commitment to advance
payments, to being there where your partners are, is every bit as
important if not more than the price paid ... The [use of] labeling
is a simplified and one dimensional understanding of the trading
relationship [offered by Fair Trade.]

Concerns about the label are not limited to licensee use. The
coffee registry that producers join to enter the Fair Trade system
has been plagued with backlogs and, some say, shuts out new producer
groups. During a chat at a Fair Trade convergence in early
2006, an executive from Starbucks pointed out to me that Fair
Trade is very concerned with promoting long-term relationships.
However, if Starbucks were to shift all its purchases to Fair Trade
suppliers, it would have to sever ties with family farmers who cannot
enter the system by virtue of the fact that they don’t meet the
requirement of being members of a cooperative. She went on to
say that even within the certified system, it is difficult to establish
verifiable paper trails when coffee cooperatives exist on two tiers.

The COSURCA cooperative introduced in chapter seven, for
example, consists of thirteen first tier cooperatives – groups of
farmers who are organized geographically. COSURCA itself is a
tier-two cooperative that provides services to approximately
1,700 tier-one farmers. Creating adequate paper trails while
working through the tiers is a challenge, particularly in developing
countries. F.L.O. has taken steps to address problems with the
system, establishing an independent certification structure. “The
main reason for the foundation of FLO-Cert as a limited company
is to make Fairtrade’s certification and trade auditing operations
more transparent.” Aside from the audit worthiness of the value
chain, when farmer associations number in the tens of thousands
it calls into question the notion of direct relationships between
producers and consumers. More to the point, however, is the perception
that the registry is a closed system that only accrues benefits
to a limited number of needy farmers. The system is also
effectively closed to artisans because there is currently no system to
label products, although the pros and cons of such a label are being
considered by I.F.A.T., F.L.O., and others in the movement.

Individual consumers have to determine comfort levels with
the use of a label and how it does or does not act as a signal of Fair
Trade principles. In a world jammed with messages and symbols,
and in the context of tensions within the labeling system, it can be
difficult to know which claims are authentic. Producers also have
concerns about the meaning of product labels. In a March 2006
declaration, C.L.A.C. – the Latin American and Caribbean
Network of Small Fair Trade Producers
– pointed out, “We work
in the market, not only for the market. Our participation in the
market is not based on a principle of obtaining the maximum price
without considering total quality of life.” (emphasis mine)
Additionally, the network announced an initiative adopting a new
symbol for identifying small producers saying “With this initiative
and our symbol we promise to continue fighting for a new model
of trade with justice.”

Although I have not spoken directly with leaders of C.L.A.C.,
I suspect the declaration signifies a concern that current label use
does not sufficiently address producer priorities. However, I have
my own concerns that a new symbol clutters an already crowded
field of labels. Nevertheless, the point goes beyond the actual label
in question. A representative for I.F.A.T.’s Latin American region
says, “We need to generate trust in the Fair Trade movement. Fair
Trade is a fashionable term, and is poorly used ... We shouldn’t be
an exclusive movement, but our movement needs the core Fair
Trade values over everything.” This, too, indicates a preference
for an holistic approach to holding fair traders to a high standard.
Such an approach is not simple and not easily implemented. A
label, symbol, or mark undoubtedly plays a role. The voices and
perspectives of consumers need to be involved in the debate as to
what such tools mean.

Neighborhood trade

In the same spirit as the U.S. based domestic Fair Trade we
considered in chapter eight, fair traders in the Global South are
finding ways to promote Fair Trade in their own backyards. As
we heard from Priya Haji of World of Good, the potential market
for Fair Trade handcrafts in the United States is vast. However,
other untapped markets are present in South-to-South trading,
wherein producing countries sell to other developing countries,
usually in their own region. Domestic markets are also being
created through solidarity trade, which has been defined as
efforts toward “producing and sharing enough material wealth
among all in order to generate sustainable conditions for self-
managed development of each and every member of societies, the
peoples and the planet.” Solidarity trade’s values and practices
are drawn from the cultures and traditions of the indigenous
people of the Global South. The U.S. family farmer efforts
described in chapter eight could also be seen as a form of solidarity
trade.

Comercio Justo in Mexico was the first southern initiative to
develop its own product certification with the intention of selling
to local markets, in this case to the Mexican middle class and
tourist markets. Brazilian fair traders have garnered support from
their federal government and have created the Brazilian Fair
Trade Forum, extending the scope of Fair Trade to internal
markets. Several countries, such as Ecuador and Kenya, have their
own Fair Trade shops. These developments in South-to-South
and solidarity trade are encouraging initiatives. Unfortunately, not
all initiatives are successful. Fair Trade shops run by Viva Rio in
Brazil closed after just a few years in operation. Their failure may
reflect a lack of disposable income in developing countries and
also points to the need for more consumer awareness and interest
in Fair Trade.

Regional and local trade shifts the power dynamic in the historic
North-South relations. In fulfillment of Fair Trade aspirations
to contribute to producer empowerment, these types of
trade hold much economic and political promise for artisans and
farmers in the future.

Creating the future

As we reflect on the challenges in the Fair Trade movement it
seems evident that a phenomenon does not have to be perfect to
be valuable. But for Fair Trade to sustain itself as a vibrant, relevant
movement it will need to bring together the various visions, ethos,
and interests of traders, North and South, global and local. It will
require a tireless spirit of introspection in the face of critiques. It
will require the flexibility to embrace new concerns, such as those
of working class consumers, without losing sight of core commitments.
It will require, therefore, a diverse and engaged consumer
base.

Readers of this guide are being invited to consider Fair Trade
as a movement worthy of their participation. What, then, is being
asked of the consumer as she or he considers Fair Trade?

Consumers are trained to be bargain hunters and to get the best
deal. They live in a world where cheap, quick and plentiful are
considered cutting edge and savvy. Embracing Fair Trade fully is
likely to mean changing old habits and patterns. It may mean
viewing the world from different perspectives. To do so, consider
some questions from The Conscious Consumer: Promoting Economic
Justice through Fair Trade
:

  • Is the ultimate goal of Fair Trade to advance an entirely new
economic model, one that permanently shifts the means of
production – and therefore profits – to workers?

  • Is it responsible to persuade affluent societies, where most consume
resources at an unsustainable pace, to continue consuming,
as long as they’re buying fairly traded products?

  • How can Fair Trade producers best develop domestic markets

rather than rely heavily on exports?

  • How can more domestic Fair Trade products be marketed in

developed regions?

And, now, on a more personal level:

  • In an increasingly disconnected, impersonal world is Fair Trade a
way to connect authentically with other people in my community,
as well as the broader world?

  • What relevance does Fair Trade have to people struggling in
poverty in so called “developed” countries?

  • How can my purchasing decisions translate into being an
effective citizen and neighbor?

  • Is it possible to translate Fair Trade shopping into opportunities
to promote values-based consumption?

Each of us has to answer these types of questions for ourselves,
to decide the right level of engagement with potential trading
partners around the world. The final chapter of this guide is
designed to help you consider some of the possibilities.

1 comment:

  1. With this book, Jacqueline DeCarlo succeeds in stimulating readers' thinking around complex issues that refuse to be easily "solved" (and therefore dismissed). Those who promote Fair Trade concepts and practices seem to excel in their ability and commitment to raise popular awareness of the complicated and evolving social/political/economic realities of our day.

    For all of us, developing the ability to think clearly and well makes us not only better-informed consumers but, I humbly suggest, more engaged citizens -- of the world, of our countries and of our neighborhoods.

    ReplyDelete