Fairtrade Certification Research Articles

Fairtrade, Food Security and Globalization: Building Alternative Food Systems

This article examines the politics and practices of Fairtrade certification in order to assess whether this alternative trading system could contribute to innovative solutions for global food security. The analysis begins by assessing the main challenges and problems characterizing the contemporary global food system. It then explores the history, vision and certification standards of the Fairtrade label. In the third section, the results of the impact studies of Fairtrade certification on producer livelihoods are discussed, analyzing the various strengths and weaknesses. Finally the article analyzes whether, and how, the Fairtrade system could positively contribute to improving global food security. To conclude this paper argues that the greatest strength of Fairtrate is not the certification mechanism itself but rather the social and environmental principles it represents. Fairtrade standards could serve to inform broader international policies, which could lead to a sustainable transformation of the global food system.

Fairtrade Certification and Livelihood Impacts on Small‐scale Coffee Producers in a Tribal Community of India

AbstractCan Fairtrade certification improve farmers’ livelihoods in small‐scale coffee farming tribal communities in India? Has Fairtrade contributed to capacity‐building among the farmers? To answer these questions, household data of 256 coffee farmers from a tribal coffee‐producing community in southern India was collected in 2010. Using the propensity score matching technique, the empirical findings show that Fairtrade certification has a positive impact on farmers’ income. However, the incidence of poverty in the community is very high, with 84% of the certified farmers being extremely poor. Some improvement in the livelihoods of certified farmers has occurred from higher and assured farm gate prices, regular collection of coffee from the village centers that reduces travel costs, and from the social Fairtrade premium. But while the benefits are modest and the process is slow, challenges remain in terms of improving the effectiveness and management of the cooperative system, as well as raising the awareness of farmers about Fairtrade certification. There is a need to strengthen the positive impacts created by Fairtrade certification by collaboration between the cooperative and local government to enhance the technical, financial and human capacities of the coffee cooperative members.

Livelihood diversification with certification‐supported farming: The case of land reform beneficiaries in the Philippines

AbstractThe promotion of intensive farming through organic and fair trade certification appears contradictory to the increasing significance of non‐farm income sources in rural Asia as well as in many other parts of the rural South. By observing a sugarcane producer co‐operative comprising land reform beneficiaries in the Philippines, this paper explores the reality of livelihood diversification as practised by member households of the certified co‐operative, focusing on the compatibility of certification‐supported farming with diversified activities. In this case, diversification at the household level progressed both away from farming and into farming. Behind the long‐term use of agricultural certification, there are compelling reasons for continuing both certification‐supported farming and diversified activities, and for employing mechanisms that further the compatibility at all phases between the former and the latter, and maximising income‐generating opportunities. The operation of communal land with agricultural certification may be an effective form of assistance to land reform beneficiaries who share a strong desire to be landowners.

Can Minimal Autonomy Legitimate Coercive Institutions?

The central thesis of Hassoun’s book states that coercive international institutions, in order to be legitimate, must ensure sufficient autonomy for those subject to them. While part i analyses the theoretical structure of this argument, part ii aims to assess its practical implications in the contexts of aid and trade. This effort to bridge the gap between theory and practice is welcome, even though the connection could be strengthened further. At the core of Hassoun’s theoretical stance lies the innovative idea of a sufficientarian account of the legitimacy of coercive institutions. This review suggests that, in contrast to a sufficientarian theory of the just distribution of material resources, relying on a sufficientarian view in the context of legitimacy is more controversial. Following the discussion of some more specific theoretical issues, the review closes with an evaluation of Hassoun’s proposal of a fair trade certification system for pharmaceutical companies.

Credibility of propensity score matching estimates. An example from Fair Trade certification of coffee producers

ABSTRACTPropensity score matching (PSM) is an increasingly popular method for evaluation studies in agricultural and development economics. However, statisticians and econometricians have stressed that results rely on untestable assumptions, and therefore, guidelines for researchers on how to improve credibility have been developed. We follow one of these guidelines with a data set analysed by other authors to evaluate the impact of Fair Trade certification on the income of coffee producers. We provide thereby a best practice example of how to evaluate the credibility of PSM estimates. We find that a thorough assessment of the assumptions made renders the data we use not suitable for a credible PSM estimation of the effects of treatment. We conclude that the debate about the impact of Fair Trade certification would greatly benefit from a detailed reporting of credibility checking.

A Role of Fair Trade Certification for Environmental Sustainability

Although most studies on the Fair Trade initiative are, to some extent, cognizant of its contribution to environmental sustainability, what the environmental aspect means to Fair Trade has not yet been explored fully. A review of environmental issues in the Fair Trade literature suggests that Fair Trade might influence participant producers’ farming practices even if it does not directly impact natural resources. This paper attempts to interpret Fair Trade certification as an intermediary institution that links two significant objectives of rural development in the global South—environmental conservation and poverty reduction. This theoretical concept is examined in different real settings by observing four cases of Southern small farmer groups involved in the Fair Trade initiative. Findings from these case studies imply that if Fair Trade certification ensures tangible benefits for small farmers, it can not only help such disadvantaged farmers but also work as an approach for natural resource management.

Fishers, Fair Trade, and finding middle ground

The goal of Fair Trade certification is to contribute to sustainable development by offering trading conditions that are transparent and equitable. One important condition is improved market access and strengthened producer organizations. In regions like Southeast Asia this goal can be hard to achieve in value chains where local middlemen play a central role in not only trading fish, but also providing fishers with access to capital, infrastructure and essential services. Despite these contributions, Fair Trade principles presume that middlemen adversely control market benefits that should accrue to primary producers. The social and economic contributions of middlemen, and the potentially dependent relationship fishers have with them, is therefore a controversial issue if Fair Trade fish is going to be marketed as a product capable of improving fisher livelihoods. In this paper, we explore the role of middlemen in the first ever Fair Trade USA fishery: handline-caught yellowfin tuna from Molucca in Indonesia. Interviews with fishers, middlemen, the local processor and those involved in Fair Trade implementation were conducted and analzed to understand changes to the organization of the value chain and of the community by defining how middlemen contribute to the assets and capabilities of fishers. The results indicate that middlemen contribute but also control the full range of assets required to enable fishers to fulfill their value chain functions. Introduction of Fair Trade has facilitated a rapid reorganization of value chain structure in the fishery with notable impacts on fisher perceptions of the resource and the market. However, it remains unclear what this value chain reorganization means for community structure. The opportunities and challenges for Fair Trade USA fish to be an empowering force depend heavily on fisher-middlemen dynamics being adequately considered.

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 certification as oversight: an analysis of fair trade international and the small producers' symbol

ABSTRACTIn this article we analyse Fair Trade as a form of non-state regulation, building on the literature on the internal politics and governance of Fair Trade International (FTI) certification. We focus on recent developments in the FTI certification system, including the split of Fair Trade USA from FTI and the emergence of the Small Producer's Symbol (SPP) as an alternative to FTI certification. We highlight the role of the three regional Producer Networks, in particular the Latin American Producer Network, the CLAC, in the politics and governance of the FTI system. In order to analyse these issues we employ an alternative reading of Karl Polanyi's work in relation to Fair Trade. We problematise the claim made by some in the literature that FTI certification is an example of Polanyi's concept of re-embedding. Instead, we draw on Polanyi's concept of oversight to analyse Fair Trade certification. We argue that the emergence of the SPP out of the CLAC shows promise for being a mechanism of oversight more reflective of Polanyian re-embedding than FTI certification. We also emphasise how the growth of the SPP and the pressure from the Producer Networks have prompted governance reform within the FTI system.

Assessing the social and economic benefits of organic and fair trade tea production for small-scale farmers in Asia: a comparative case study of China and Sri Lanka

AbstractOrganic agriculture has the potential to provide improved livelihood opportunities, increased income and social benefits for resource-poor small-scale farmers. It has thus become a popular strategy for economic development and poverty reduction in many areas of the global south. However, there has been limited empirical research regarding the actual benefits of certified organic production, particularly when organic is combined with fair trade certification, and for small-scale farmers who are not engaged in coffee or banana production. Further research is needed to demonstrate experiences of farmers under diverse socioeconomic conditions, organizational contexts and degrees of market access. To address these gaps, two surveys of certified organic and fair trade tea producers in China and Sri Lanka were undertaken to investigate the contributions of organic crops to the household economy. In both cases, organic production required lower investment in terms of external inputs but a higher input of farmers’ labor. The price premium received by farmers for the organic tea compensated for the extra labor input and lower yield, resulting in a net profit. However, given the relatively small plots of tea gardens of each household, organic production could not fully provide for the households’ livelihood. Non-farm income dominated the total income of the households across the study cases, despite the earnings from organic farming. In both sites, market-oriented organic tea projects have created more options for paid work locally, which benefits women of reproductive age. Social benefits of organic farming were also reported. Pursuing fair trade certification on top of organic production facilitated farmer organizing, training and community development. Organic agriculture and fair trade certification offer important prospects to improve the livelihoods of small-scale farmers in other, less favored areas of Asia. These forms of certified production could provide economic and social benefits in instances where farm income is the main source of household income.

A positive analysis of Fairtrade certification

The Fairtrade program transfers income to farmers by establishing a price floor and an alternate distribution channel that bypasses intermediaries between the raw commodity and world markets. I develop a model of the international commodity supply chain, with monopolistically competitive final goods producers and consumers who value the ethical quality of goods. A small number of oligopsonistic intermediaries purchase the raw commodity from farmers in a given country and then sell to final goods producers in the world market. I consider the effects of a Fairtrade program that is too small to have an effect on the world price of the commodity. I show that the Fairtrade program decreases the intermediaries' market power and consequently, even farmers that are not selected into the program receive a higher wage than in the absence of the program. I establish the Pareto optimal Fairtrade price and assess the overall efficiency of the program. The program is a more efficient way to transfer income to farmers than a direct transfer equal to the premium commanded by certified products if the Fairtrade price is not set too high above the efficient wage for farmers. If the number of intermediaries were large, however, then the direct transfer would be more efficient than the program for all binding Fairtrade prices.

The Hidden Labor of Fair Trade

In this article, Sarah Lyon explores the impact of fair trade on agricultural laborers within Latin America. She situates fair trade within regional processes of agrarian change, exploring how the movement and certification practices intersect with broader socioeconomic and political forces, paying close attention to fair trade's insertion into local, regional, and national contexts. The data come from three sources: the author's own research among small coffee producers in Guatemala and southern Mexico, related studies on contract labor within small producer fair trade value chains, and an exploration of fair trade standards for plantation production. In its current form, fair trade certification provides few identifiable advantages to waged agricultural laborers. It is critical that certifiers begin to explicitly acknowledge and strengthen the legal frameworks already in place to protect agricultural worker rights. Where these are inadequate, fair trade organizations can and should work with other stakeholders to change both norms and regulations.

Willingness to pay for organic and fairtrade certified yellow chili peppers

Purpose– The purpose of this paper is to evaluate the consumers’ preferences in middle- and high-income districts in Lima for three organic and Fairtrade certification attributes: environmental protection, production without pesticides, and improvement in the quality of life of farmers. Yellow chili pepper was used as case study.Design/methodology/approach– A survey of 183 households was conducted among the population located in middle and high income districts in Lima, because of their higher ability to pay. Choice experiment data were analysed using random parameter logit models (RPM) with and without interaction effects.Findings– The results suggest that there is a statistically significant willingness to pay for organic and Fairtrade certification attributes (ranging from S/4.4 to 9.3). The results also indicate that the higher the income the higher the willingness to pay for yellow chili peppers grown without pesticides.Originality/value– The results provide support that willingness to pay values for particular food certification attributes are statistically significantly associated with the ability to pay even among the middle and high income population in Lima. This positive association between willingness to pay and income is not always present among the general population in developed countries. As such, the demand for certified products would be especially associated with the overall economic growth of the emerging and developing country under consideration.

An integrated environmental and fairtrade labelling scheme for product supply chains

Environmental initiatives such as carbon labelling have been suggested as a driver for achieving sustainable production systems of product supply chains. The paper therefore presents a systematic process of developing an environmental labelling framework as an extension of carbon labelling using the fairtrade certification as a platform to facilitate the process. Using the general theoretical constructs of lifecycle assessments, the framework presented provides insight into the formulation of multi-regional supply chains which has been specifically characterised in this paper for the UK–India–Rest of the World supply chain. The environmental labelling process presented in this paper is based on two key principles; Quantitative Principle in Eco-labelling and the Principle of Whole Lifecycle Perspective and it is used to inform two key stakeholder groups in the supply chain: consumers and supply chain partners.For consumers, a consistent way of presenting the environmental label information is presented highlighting the supply chain impacts across the indicators of CO2-eq emissions, water consumption and land use in addition to regional contributions to these impacts from a global supply chain perspective. Additionally, communicating the environmental impacts to supply chain partners provides a decision support to take actions to reduce the overall impacts by identifying processes within the global supply chain that needed prioritisation.Given that fairtrade partnership is based on participatory development and a strict guidelines and standardisation process, it is envisaged that synergies can be derived by integrating environmental labelling with the fairtrade scheme to enhance the environmental sustainability of product supply chains.

Sustaining Inter-organizational Relationships Across Institutional Logics and Power Asymmetries: The Case of Fair Trade

This paper explores an empirical puzzle, namely, how inter-organizational relationships can be sustained between organizations that draw upon distinctive—and potentially conflicting—institutional logics under conditions of power asymmetry. This research analyses cases of these relationships and suggests some key conditions underlying them. Examining relationships between ‘Fair Trade’ organizations and corporate retailers, a series of contingent factors behind the dynamic persistence of such relationships are proposed, namely: the presence of pre-existing ‘hybrid logics’; the use of boundary-spanning discourses; joint tolerance of conflict; and co-creation of common rules. These four elements are supported by a fifth mediating factor, i.e. the presence and use of a Fair Trade certification system in the collaboration. The latter appears as a central vehicle facilitating cross-logic relationships—it can be seen as a ‘boundary object’ embodying a series of narratives and discourses that are open to multiple interpretations corresponding to the dominant institutional logics of each partner organization.

Fair Trade Towns USA: growing the market within a diverse economy

Fair trade is both a movement and a market, and the tension between these two domains reflects an ambiguity at the center of fair trade in the United States, resulting from long-standing debates within the contemporary movement. In practice, this ideological division produces a struggle between companies that offer a small number of fair trade products aside a vast number of conventional items, and those that sell only fair trade certified products. However, it also shapes the experience of on-the-ground fair trade advocacy work. This article uses Gibson-Graham's diverse economies framework to explore three arenas in which this is most clearly evidenced. First, some fair trade advocates are wary of Fair Trade USA's (FTUSA) power and strategies. They are aware that multiple fair trade certification frameworks currently exist; however they aren't always sure which ones are most desirable and why. This confusion can be problematic in Fair Trade Towns (FTT) advocacy work which involves convincing community members, institutions and governments to purchase more fair trade products. Second, in light of FTUSA's strategic marketization of fair trade and the entry of large corporate players into the U.S. fair trade market, fair trade advocates increasingly find themselves in the equivocal position of providing free labor and marketing for large corporations. Third, the efforts of some FTT advocates are stymied by the determined localvores in their community who are more focused on minimizing carbon footprints and supporting local farmers than promoting social justice and environmental stewardship in the developing world. These tensions raise important questions about the scalar politics of alternative markets and diverse economies.Keywords: fair trade, social movements, localism, ethical consumption, Gibson-Graham

Food Standards, Certification, and Poverty among Coffee Farmers in Uganda

Summary Voluntary standards are gaining in importance in global markets for high-value foods. We analyze and compare impacts of three sustainability-oriented standards – Fairtrade, Organic, and UTZ – on the livelihoods of smallholder coffee farmers in Uganda. Using survey data and propensity score matching with multiple treatments, we find that Fairtrade certification increases household living standards by 30% and reduces the prevalence and depth of poverty. For the other two certification schemes, no significant impacts are found. Several factors that can explain differential impacts are discussed. Overly general statements about the effects of sustainability standards on smallholder livelihoods may be misleading.

From ‘criminals of the earth’ to ‘stewards of the environment’: The social and environmental justice of Fair Trade gold

The recent emergence of the Fairtrade certification of gold in Latin America and sub-Saharan Africa promises a radical new direction for the environmental governance of artisanal and small-scale mining (ASM). In doing so, it aims to tackle the longstanding environment and development challenges of the sector which mainstream policy has failed to alleviate. The move towards more responsible ASM practices is premised on the strategic deployment of a Fair Trade discourse that argues for its operators to be recognized not as criminals, but as valued and formalized parts of their broader economies. It is argued in this paper that this development intervention should be read within a social and environmental justice framework, one which directly answers the call from political geography for ‘compelling accounts’ of positive representations of the sector.Through a discourse analysis of 10years of media reports, interviews and recorded life histories of key ASM and Fair Trade stakeholders in Tanzania, it shows how three strands of justice (conceptualized in terms of fairer distribution, procedure and recognition) are articulated by the Fair Trade gold movement and critically assesses the politics behind such a deliberate strategy. In particular, it argues that recognition is a key part of justice that has been underplayed by erstwhile analyses of Fair Trade. Through a case study of Tanzania, it is concluded that although significant progress has been made in terms of arguing for greater recognition for ASM operators, there remains a need to better link discourse with practice in establishing greater distributional justice.

Governing Fair Trade Coffee Supply: Dynamics and Challenges in Small Farmers' Organizations

Farmers' organizations are essential actors in fair trade certification schemes, and therefore in delivering their associated benefits for poor small-scale farmers. However, the dynamics and challenges faced by these cooperative organizations have been largely bypassed in the fair trade literature. In this context, this paper aims to unpack the multiple, coexisting and interwoven marketing channels available for small-scale coffee producers, unveiling potential sources of uncertainty and tensions among competing actors and interests, and identifying and assessing the strategies used by organizations to influence farmers' marketing decisions. The analysis comprises two case studies based in the department of Huehuetenango (Guatemala), where the existence of distinct marketing channels combines with processes of product differentiation, namely organic production. Results show the limitations of standard fair trade mechanisms to secure farmers' engagement with cooperative organizations. Rather, technical advice to improve farming practices and quality construction seem to be a more effective mechanism to govern this collective supply chain. Nevertheless, these strategies could be further constrained by productive and organizational factors, affecting the sustainability of potential benefits delivered by these key collective actors. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment

FairTrade’s theory of change: an evaluation based on the cooperative life cycle framework and mixed methods

This study presents a quasi-experimental analysis of the impact of FairTrade certification on the commercial performance of coffee farmers in Tanzania. In doing so the study emphasises the importance of a well-contextualised theory of change as a basis for evaluation design. It also stresses the value of qualitative methods to control for selection bias. Based on a longitudinal (pseudo-panel) dataset comprising both certified and conventional farmers, it shows that FairTrade certification introduced a disincentive to farmers’ commercialisation. We explain this counterintuitive conclusion on the basis of the ‘cooperative life cycle’ theory developed by US agribusiness scholars.