Fair Trade System Research Articles

Nahrung, Sicherheit und Freihandel: Wie globale Paradigmen und Interdependenzen den Policy Space nationaler Akteure einschränken

The liberalization efforts of the World Trade Organization (WTO) with regard to agriculture were supposed to create a fair global trade system and international food security. But instead, the Agreement on Agriculture of the WTO, in the context of a global development paradigm focussed on capital-intensive agriculture, led to the reduction of policy space of national actors. In various emerging economies this led to narrow agricultural development policies, which negatively affected small-scale agriculture. But also large-scale, exportoriented agriculture felt significant pressure because the industrialized countries did not follow through on their commitments. Against this background, the negotiations for a new international trade agreement are stagnating. At the same time, the situation of small-scale farmers and landless people has worsened.

Towards a Fair Agro-food Regime? A Regulationist Reading of the Fairtrade System

The hypothesis of an emerging corporate-environmental food regime postulates that accumulation in the sector is based on the organization of quality audited supply chains governed by corporations. However, this reorganization of the food regime is being done on the basis of the appropriation of demands for a more socially, economically and environmentally sustainable agri-food system. This article proposes to examine the certification-based Fairtrade initiative as an entry point to the discussion of the potentiality of a corporate-environmental food regime. To do so, a regulationist conceptual framework is put forward in order to analyze the case of Fairtrade wine produced in Argentina and consumed in the United Kingdom. The analysis is done in two parts: first, by describing the concrete ways in which the Fairtrade mode of regulation institutionalizes socioeconomic relations; second, by reconstructing the Fairtrade concept of control in order to account for the political dynamics and ideological elements that underlie this system. The analysis concludes that the Fairtrade mode of regulation offers a very limited scope for transformation due to the inherent limitations imposed by the central role that capital fractions are given in the system.

Who’s the fairest of them all? The fractured landscape of U.S. fair trade certification

In recent years, consumers in the United States have been confronted by no fewer than four competing fair-trade labels, each grounded in a separate certification system and widely differing standards. This fracturing is partly a response to the recent split by the U.S. certifier Fair Trade USA from the international fair trade system, but also illustrates longstanding divisions within the fair trade movement. This article explores the dynamics of competition among nonstate standards through content analyses of fair trade standards documents from the four U.S. fair-trade certifications for agrifood products (Fair Trade USA, Fairtrade America, Fair for Life, and the Small Producer Symbol). It analyzes the differences among them, asking what kinds of social and labor relations are facilitated by each, and identifies how closely they correspond with key fair trade principles. We make two primary arguments. First, we contend that the case of fair trade challenges the dominant conceptual model used to analyze competition among multiple private standards in a single arena, in which newer challengers lower the rigor of standards. Second, we argue that the current fractured U.S. certification landscape illuminates divisions among different interest groups over which principles—and which labor and production forms—should be privileged under the banner of fair trade.

Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?

Abstract The Fair Trade (FT) coffee initiative attempts to channel charity from consumers to poor producers via increased prices. We show that the rules of the FT system permit this rent to be eliminated due to free entry and costly excess certification of output. Using data from an association of coffee cooperatives in Central America, we verify that expected producer benefits are close to 0 when we take into account the output that is certified but not sold as FT. Our results illustrate how free entry undermines the attempt at extending charity via a price distortion in an otherwise competitive market.

Etyczne aspekty światowego systemu handlowego na przykładzie koncepcji Fair Trade

The effect of globalization is not only an improvement of living conditions in many developing countries, but also a widening of development disparities and economic inequalities between countries of the rich North and the poor South. Fair trade can be considered as a response to emerging problems of development. Therefore it is a form of assistance directed to the marginalized producers in the Global South by enabling them to manufacture, sell and distribute goods to markets in developed countries. This is an alternative to the existing formula of international trade, whose aim is to help producers in the South by integrating them into the current trading system under certain conditions. The idea is to create a new business relationship between producer and consumer, where the production and consumption are bound together in a new supply chain and where the economic benefits are distributed more fairly. It means that the prices of fair trade products are set at a level that would ensure a steady income to the producer and would lead to raising their living standards and prosperity. The ethical aspects of the fair trade system are clear, the problem is whether the fair trade standards can be used on a wider scale in the global economy, where there is a clash of certain ethical values with market economy rules based on maximizing profits and increasing efficiency.

Dispatches

Dispatches

The fair trade scandal: marketing poverty to benefit the rich

This critical account of the fair trade movement explores the vast gap between the rhetoric of fair trade and its practical results for poor countries, particularly those of Africa. In the Global North, fair trade often is described as a revolutionary tool for transforming the lives of millions across the globe. The growth in sales for fair trade products has been dramatic in recent years, but most of the benefit has accrued to the already wealthy merchandisers at the top of the value chain rather than to the poor producers at the bottom. Ndongo Sylla has worked for Fairtrade International and offers an insider's view of how fair trade improves - or doesn't - the lot of the world's poorest. His methodological framework first describes the hypotheses on which the fair trade movement is grounded before going on to examine critically the claims made by its proponents. By distinguishing local impact from global impact, Sylla exposes the inequity built into the system and the resulting misallocation of the fair trade premium paid by consumers. The Fair Trade Scandal is an empirically based critique of both fair trade and traditional free trade; it is the more important for exploring the problems of both from the perspective of the peoples of the Global South, the ostensible beneficiaries of the fair trade system.

Moisture content in raw rubber sheet analyzed by transflectance near infrared spectroscopy

Moisture content is an important trait for rubber sheet trading system. Therefore, a calibration equation for predicting moisture content was created by near infrared (NIR) technique in order to develop a more fair trading system in Thailand. Spectra were recorded in two systems. One was measurement on each rubber sheet and the other was on a pile of sheets. Both were measured by a handheld NIR spectrometer in the short wavelength region (700–1100 nm) in the transflectance mode using Teflon as a diffuse reflector. The spectra showed the peak at about 900 nm which belongs to isoprene, the major component of rubber sheet. Pretreatment with second derivative was applied to remove baseline shift effect occurring due to thickness differences on each rubber sheet. From validation results, moisture contents predicted by single sheet system were more accurate than a pile of sheet system with standard error of prediction (SEP) = 0.39% and bias of -0.07%, and they were not significantly different from the actual values at 95% confidence. As a result, determining moisture content in each rubber sheet by a handheld NIR spectrometer provided accurate values, easy and rapid operation.

Sąžiningos prekybos plėtros galimybės Lietuvoje

Straipsnyje nagrinėjama Sąžiningos prekybos (angl. Fairtrade), kaip socialinės atsakomybės reiškinio ir ekonominės veiklos fenomeno, koncepcija, raida, šio tipo produktų gamybos, realizavimo ir sertifikavimo ypatumai. Ypatingas dėmesys skiriamas Sąžiningos prekybos produktų atpažįstamumui ir jų realizavimo augimo Lietuvoje trikdžiams identifikuoti bei šios socialiai atsakingos veiklos platesnio taikymo galimybių paieškai. Remiantis mokslinės literatūros sistemine analize ir šio straipsnio autorių atlikta vartotojų bei prekybos organizacijų vadovų ir vadybininkų apklausa, pristatomas Sąžiningos prekybos produktų realizavimo plėtros mūsų šalyje modelis ir jo įgyvendinimo algoritmas.

Access to the Fairtrade system: the geography of certification for social justice

A growing body of research and analysis identifies that fair trade practices create opportunities for developing world producers in a manner best described as providing ‘shaped advantage’, as access to Northern markets is reconfigured to operate under preferable conditions for some producers, but is not necessarily universally expanded and improved. From this point of view, impact potential is first and foremost delineated through the conditions of access to fair trade supply networks. In order to unpack this perspective, the article analyses barriers to entry embedded in the most significant avenue through which producers become involved in fair trade: certification by Fairtrade International. Here it is found that in addition to arguably justifiable restrictions on participation, structured around producer capacity to viably engage in trade, more arbitrary geographical restrictions embedded in the Fairtrade system are also an ongoing and significant barrier to widening impact. This article illustrates the reality of these technical limitations by presenting the mixed experiences of the National Smallholder Farmers' Association of Malawi, and their efforts to use Fairtrade certification as a market development tool.

Where does the Fair Trade price premium go? Confronting consumers' request with reality

Purpose– An important characteristic of Fair Trade products is that a fair price is paid to the producer. At the same time the Fair Trade system is accused of being inefficient with respect to the distribution of the price premium paid by consumers along the supply chain. This study aims to focus in particular on consumers' perceptions of fair pricing. Besides, the paper seeks to assess the extent to which consumers' expectations are somehow anchored in or in accordance with reality in Germany in 2007.Design/methodology/approach– To get insights into German consumers' perception of Fair Trade a consumer survey based on face-to-face interviews withn=484 participants was conducted in 2008. To approach the profit distribution along the Fair Trade coffee chain a web-based market investigation was performed.Findings– One important result is that most of the consumers actually narrow Fair Trade down to the issue of paying fair prices to farmers. The comparison of the efficiency of the Fair Trade system that is requested by the study participants (measured as the share of an additional euro paid for a Fair Trade product) and the point of sale calculations (revealing the percentage of the retail price going to the producer) indicates that for 60 percent of the respondents a calculated share of 50 percent reaching the producer would not be high enough. Results reveal that 10 percent of the respondents require a minimum share of 90 percent of the retail price to reach the producer. A total of 23 percent are satisfied with 80 percent; 60 percent of the respondents want that more than 50 percent of an additional euro spent reaches the producer. Only 4 percent of the participants are willing to accept an efficiency of less than 20 percent.Originality/value– This is the first paper not only investigating how much of the price premium paid by consumers reaches the Fair Trade producers but also delivering insights regarding how much of the price premium paid in the retail store for Fair Trade coffee consumers do request to reach the Fair Trade producer.

Buying for a Better Tomorrow? – A Literature Review of Fair Trade Consumer Motivations

This research summarizes and analyzes the academic literature on motivations of consumers of Fair Trade products. Basic disciplinary, methodological approaches and thematic emphases are described. Ethical consumption, labeling, and the significance of meaning and identity in consumption of Fair Trade are the three main themes found to predominate in the literature. All three themes are found to be addressed across disciplines. Two major Fair Trade models, referred to in the paper as alternative and mainstream, found in the Fair Trade consumer literature, are shown to be linked to patterned variations in the central concerns of authors about ethical consumers, labeling and identity. The mainstream model favors incorporating Fair Trade products into the current global system in place on a larger mass-produced scale where economic solutions are going to push Fair Trade into a more sustainable path. This model was found to be more prevalent in literature in the Economic (Arnot (2010), Becchetti (2007), De Devitiis (2011), Loureiro (2005), Ozcaaglar-Toulouse (2006)), and Business disciplines (DePelsmacker (2005), Doran (2009), Ferran (2007), Gielissen (2011), Laine (2009), Morrell (2010), Nicholls and Opal (2004)). The alternative models are more concerned with finding different ways to sell and market Fair Trade products compared to the mainstream, and emphasize equity as well as economics as a solution for sustainability of the Fair Trade system. This model was found to be more prevalent in the Social Science litterature (Adams (2010), Brown (2009), Brown (2010), Clarke (2007), Howard (2010), Jaffee (2010), Low and Davenport (2009), Lyon (2006), Raynolds (2002), Soron (2010), Webb (2007), Zick Varul (2008)), Environmental Design and Politics (Fridell (2007)), Political Ecology (Bryant (2004)), Environmental Design and Politics (Political Science (Micheletti (2008)), and Design and Merchandising disciplines (Littrell (1999), Littrell (2010)). This paper contrasts the key differences in analysis of ethics, labeling, meaning and identity in consumer motivations within these two major Fair Trade models and suggests that better communication across disciplinary boundaries is needed. Also recommended is increased recognition and articulation of underlying assumptions of the different models of Fair Trade and acknowledgement of their influence on research questions and conclusions. This research makes evident the need for more empirical research on consumers of Fair Trade and increased integration of broader understandings derived from research across disciplines to increase the capacity of Fair Trade to deliver on its promises.

Developing Entrepreneur to Fairtrade System for Food Industry Group in Thailand

Developing Entrepreneur to Fairtrade System for Food Industry Group in Thailand

Perceptions of fair trade labelling and certification: three case studies

PurposeThe fair trade system was established as an alternative to the free trade system. In the case of fair trade apparel, certification standards are nascent and there is no consistent logo or labelling to aid consumers in their quest to purchase fairly‐made garments. The purpose of this paper is to examine the practices and marketing strategies of three fair trade apparel businesses based in a metropolitan city in the USA, where there are no clear standards to follow. The interviews taken for these case studies were conducted before the launching of a certification program for fair trade apparel by TransFair USA.Design/methodology/approachThis research comprised three case study fair trade apparel companies – two wholesale and one retail. The case studies are based on in‐depth interviews, the examination of documents provided by business owners, and publicly available information on each of the companies.FindingsThese three case studies revealed differences in fair trade practices. The wholesalers communicated that they perceived a hierarchy of importance in fair trade practices, placing an emphasis on labour standards and workers’ rights and considering environmental standards to be secondary. The lack of a standardized logo for labels on fair trade apparel has meant that the businesses have had to find creative ways to communicate their fair trade practices to consumers. None of the participants felt that this lack of standardization negatively impacted their businesses.Practical implicationsThere is need for a standardized label to make fair trade apparel easily identifiable for consumers and for the further development of standards for fair trade apparel and the marketing of fair trade apparel.Originality/valueStandards for fair trade apparel are currently being developed and the paper provides valuable information about the process by which fair trade standards are formed and marketed in practice.

We're 15 years behind Africa, Asia and Latin America!: Fair Trade meets the Pacific

Fairtrade market growth is characterised by expansion and exclusion in terms of producer opportunity. This paper draws producers in the Pacific region into the debate, analysing the development context among these small-island developing states and, specifically, the practices and principles of four ‘ethical’ enterprises. The analysis reveals that the unique and complex context in which these organisations operate is at odds with Fairtrade's requirements, standards and assumptions. The paper highlights the need for contextually relevant requirements and principles, and the likelihood of alternative governance arrangements and actors, for an inclusive Fairtrade system and market in the region.

Barriers to Entry, Vertical Integration and Price Floors: Economic Impacts of Fair Trade Coffee

The Fair Trade coffee market has emerged as a response to the adverse conditions faced by small-scale coffee producers. Though the market has grown steadily, it has received criticism from inside and outside the Fair Trade system. This paper examines three critical elements of Fair Trade certification to find theoretical and empirical support and rebut of the criticisms that the market is too limited, is inefficient and encourages over production. We find the Fair Trade coffee market has been successful at improving living conditions for a select group of coffee producers without causing significant market distortions to non-Fair Trade producers.

Fairness in the WTO Trading System

We first provide a brief critique of the utilitarian principle as a guide to fairness in the world trading system. We then turn to the alternative conception of fairness in terms of economic equity, exploring the meaning of its two components: equality of opportunity and distributive justice. We thereafter proceed to discuss the conditions of autonomy and reciprocity that have to be met in order to realize greater fairness in multilateral trade negotiations. Next, we comment on aspects of procedural justice that are necessary for the functioning of a fair trading system. Finally, we conclude with an overall assessment of the considerations of the fairness achieved in the Uruguay Round multilateral negotiations.

EXPORTING BANANAS FOR IMPROVED LIVELIHOODS AND SOCIAL DEVELOPMENT: EXPERIENCES AND CHALLENGES FROM LATIN AMERICA AND AFRICA

Smallholder banana (Musa spp.) farmers traditionally play a role to buffer supply and demand fluctuations of large banana marketing companies. As a result, smallholder farmers faced permanent commercial insecurity. The plight of smallholders in export markets led to the development of the fair trade business model, which was first applied to coffee markets. Since that time, other products, including bananas have been integrated into the fair trade system. This offers smallholder farmers an alternative market opportunity, where they can benefit from stable contract volumes, gain direct access to export markets and share in the upstream revenues. Instead of multinational marketing and production companies controlling the value chain and netting the lion's share of the profits, smallholders can effectively export and market their own bananas. More recently, smallholder farmers' organizations from Latin America have successfully entered the European markets with their co-owned banana and fresh fruit importer AgroFair, operating under fair trade certification and marketing the fruit under its own Oke brand. As shareholders in AgroFair, the profits are ploughed back into the farmers' communities, instead of being added to shareholder's value in stock exchanges. Moreover, a part of the sales revenues is paid to the farmers' organizations as a premium for social and economic development. This improves the quality of the livelihoods of banana farmers and boosts social development throughout communities. At the same time, the farmers respect the environment by means of integrated pest management and in some cases through organic agriculture, so that their value chain is both socially and ecologically sustainable. Whilst this has been successful, the organizational models for farmer and supply chain organizations need to be adapted to the context and the business model does not perform equally well in all value chains. In Africa, good results have been obtained by a plantation that is partially co-owned by the workers, and by a competent export house that works entirely in the interest of small producers. This article analyses the fair trade value chain from production to marketing, highlighting some lessons learnt, the social advantage that can be assessed and the opportunities and challenges it presents to African banana producer communities.

The FairWild Standard – A fair and sustainable deal for wild-collected ingredients throughout the supply chain

The increasing demand for natural products in the sectors of food, cosmetics, wellness and medicinal ingredients poses major ecological and social challenges. The high pressure on potentially vulnerable plants can endanger local ecosystems and livelihoods of collectors who often belong to the poorest social groups in the countries of origin. In order to deal with these challenges, a standard and certification system for sustainable wild-collection of plants was developed by different stakeholders and interest groups, leading to the establishment of the FairWild Foundation in 2008. The Foundation is responsible for the maintenance and implementation of the FairWild standard that consists of sound ecological as well as social and fair-trade principles and criteria. FairWild Foundation aims to provide a worldwide framework for implementing a sustainable, fair and value-added management and trading system for wild-collected natural ingredients and products thereof. FairWild Foundation informs, advises and assists customers with projects in sustainable wild-collection and implementation of the standard. In addition, FairWild Foundation advises on the inclusion of sustainable and fair management principles in conservation strategies, trade policy and other regulations. While encouraging sustainable and fair business practices, the FairWild Standard also focuses on influencing consumer choice. The FairWild Standard is based on existing traditional knowledge and appropriate resource management, as well as on Fair Trade principles and ILO Standards. The Standard is geared to a worldwide approach.

Dancing with the Devil: Fair Trade’s Expansion as a Regulatory Standard-Setter

Fair Trade is now a common occurrence of the average consumer’s shopping basket. From coffee to rice, it has become a standard over the last few years. The more ‘conscious’ the consumer the more ‘Fair Trade’ labelled products in his shopping basket.Hence ‘Fair Trade’ has expanded from a grassroots, alternative and exceptional form of consumption to becoming commonplace and sold by the largest corporations in the coffee sector. This paper argues that in expanding its role as a regulatory standard-setter, Fair Trade has had no other choice but to “dance with the devil” and collaborate with the largest multinationals in the world. In so doing, we question whether by adopting the traditional attributes of private regulatory standard-setters, the Fair Trade Label has been able to remain true to the cause it originally purported to defend.We shall first examine contemporary legal aspects of standard-setting and the differences between traditional ‘Hard Law’ and ‘Soft Law’ before reviewing the Fair Trade system and the way it operates. This will be followed by the analysis of ISEAL Alliance Codes of Conduct and their compliance with WTO law. Finally, we shall scrutinise the Fair Trade certification process, its costs and impacts on coffee producers before further questioning the phenomena of collaborating with corporate giants and how this has resulted in ‘astroturfing’. Far from using an alternative system to the liberal economic order, Fair Trade’s success is entirely owed to it. It is even more twisted in its use of the you-do-good-when-you-buy-Fair-Trade marketing scheme as it makes producers pay to be allowed to be help. MNCs have found their new Eldorado in this ideal, as it enables consumers to buy their way out of guilt without changing their own lifestyle.