Fair Trade: Environment
What the heck is Fair Trade doing on Green Options? Well, there are many ways in which it intersects with the environmental movement.
For example, the most recognizable poster child of Fair Trade the delicious coffee. In the 1970's coffee demand grew and a high-yield tree was developed that flourishes in direct sunlight but requires heavy pesticide use to do so. Many coffee producing countries have no laws regulating the use of these pesticides and the effect on local communities and the environement can be devastating. In Columbia in 1993 &1994 “the insecticide endosulfan resulted in more than 100 poisonings each year, and four deaths."
Conversely certified Fair Trade coffee requires farmers to use eco-friendly practices, with 60% having already achieved organic certification and the remaining utilizing organic practices such as integrated pest management. Not only are many crops organic, but the coffee is frequently shade grown, which allows natural habitats beneficial for wildlife to grow around and amongst the coffee crop. According to the Sierra Club, rainforests are vanishing at 40 million acres a year, which makes these habitats increasingly vital to tropical wildlife. Small traditional coffee farms also cultivate other crops such as fruit, cacao and trees used for firewood creating a diversity which benefits both farmer and land. Fair Trade also offers social premiums and resources for “organic conversion, reforestation, water conservation and environmental education.” These benefits are found through all Fair Trade agricultural products, including chocolate, tea and bananas.
Mother Nature is not only being helped by Fair Trade produce. Many crafts produced by Fair Trade artisans are created from recycled materials; intricate purses are made from salvaged sari’s which would otherwise be burned, totes made from recycled rice bags and juice wrappers, floor mats from old flip flops. There are fun decorative chickens formed from old plastic bags and jewelry from melted old coins. Frames and coasters from rolled paper and cards from recycled pulp.
And most importantly, Fair Trade is about a sustainable trade system that is fair to all parties. It offers people in poverty a chance at a secure future, so that they may look forward and invest in the betterment of their community and land. A sustainable and fair economy cannot be acheived without environmentally sustainable production methods.
This is the third in a series of posts discussing the Fair Trade criteria. Also check out Fair Trade: Transparency and Fair Trade: Fair Wages.
Tags: environment, Fair Trade, fair+trade, green, sustainable
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May 22nd, 2007 at 4:59 pm
Great article. Many coffee drinkers are proud of the fact that they support an industry that, to a significant degree, supports its workers and the environment. HOWEVER, many of these same coffee drinkers do not demand the same from the wine industry, here in the U.S. or abroad. There is some small movement on that front, but currently over 99% of the wine produced is NOT pesticide, fungicide or other chemical free. In fact, grape growing is incredibly chemical-intensive.
And let’s not even get into the labor practices in the U.S. wine industry. . .it’s horrific.
Think about this more often folks, next time you toast a glass of wine. Demand more from the wine industry! Support only companies who practice fair trade and organic methods!
May 22nd, 2007 at 6:39 pm
Here’s a line of argumentation that I was hoping you could comment on. A few months ago, the Economist wrote about fair trade coffee. Their contention was that fair trade coffee inflates the potential farm value of coffee, thereby sending ‘market signals’ to farmers to grow more or get into the business. They argue that the low price of coffee indicates the market is saturated and there needs to be fewer, not more, coffee growers, and that Fair Trade distorts the market value.
I personally don’t agree with this, but would appreciate more discussion of the argument…
May 22nd, 2007 at 7:44 pm
Great point TodBrilliant! Fair Trade & organic wine options are far too few at this point. I tried the French Rabbit wine at the Green Festival in Chicago but wasn't particularly wowed, although the packaging was intriguing.
Clayton, this is one of the most common criticisms to fair trade. Interestingly this argument is rarely accompanied by discussion of our own farm subsidizing practices and the effect this has on us, other countries and the supply and demand system. But that’s another very, very large can of worms. . .
There are 2 main responses to this criticism, from L.Becchetti & F.C. Rosati’s , Globalisation and the death of distance in social preferences ad inequity aversion: empirical evidence from a pilot study on fair trade consumers, CEIS Working Paper, n.216 and World Economy (forth.)
1. First, in many cases the exchange between producers and intermediaries does not occur in a competitive framework. In such case the market price is a distortion because it does not reflect the productivity of producers but their lower market power.
2. Second, the food industry produces highly differentiated products with a continuous wave of innovations which create new varieties. There is not one single coffee but instead many different coffee products which are differentiated from one another in terms of quality, blends, packaging, and now also "social responsibility" features. For each of these products there exists a specific and different market price which is determined by consumer taste for that kind of product. In this sense, fair trade is an innovation in the food industry which creates a new range of products.[40]
According to FLO, Fair Trade is “a market-responsive model of trade: the farmers only receive the Fairtrade Minimum Pricing and Premiums if they have a buyer willing to pay them, and may producer groups continue to also sell in the conventional market” (http://www.fairtrade.net/faq_links.html?&no_cache=1)
Fair Trade also encourages crop diversification through technical and financial support, an opportunity which would not be financially viable to many farmers in the current market. Most importantly in my opinion, is that Fair Trade is an attempt to level the playing field. Basic supply and demand systems are compromised when bullying occurs, and we must seek a solution that allows trade to be a truly fair system.
May 23rd, 2007 at 3:10 am
I have an answer to the Fair trade price signal issue (raised by The Economist) and more on the “green-ness” of Fair Trade.
First, Fair Trade pricing does _not_ encourage over-production, nor, by the way, do the frequent poverty-inducing low prices of the free market induce as many farmers to switch out of coffee as the text-book, arm chair economists predict. Why?
A) High prices only enduce increased production to the extent they’re available. Because Fair Trade demand is still quite limited, the vast majority farmers only stand to get paid the going, local, normal “farm gate” price - not the Fair Trade price - so for them there’s no incentive to increase production. In fact, for the foreseeble future, Fair Trade demand will only represent a portion of all the coffee already being grown by small farmers. So, for the lucky few who can, say, sell 1000 pounds through their co-op for Fair Trade prices, they still will only get a conventional price for each extra pound they grow beyond that 1000 pounds. In other words, each year when a farmer is deciding how much to grow (which involves many variables beyond just the market price) they know that any extra production will need to be dictated by the likely conventional market price, not a fair trade price.
B) Conversely low prices do not drive as many farmers out of coffee as text-book theory predicts because reality is so much more complex than theory. For example, as poorly as coffee pays it can still sometimes provide a slightly less-worse livelihood than the alternatives. For ex, thousands of Peruvians became coffee farmers after World War II because new roads finally gave them a chance to try something, anything, other than the potato-farming they had traditionally done on the cold altiplano. From what I saw in Peru no one was eager to go back to the even-more meager livilihood potatoes could provide.
Also, as a long-lived tree crop coffee (& cocoa) changes the calculus. Because it’s a long-term investment it can take years of repeatedly low prices before a farmer finally gives up on it.
Also, in some areas the land is not suitable for other crops.
Also, in many areas there is neither the physical nor market infrastructure to successfully switch to other crops. You might switch to strawberries, but without a sophisticated (& expensive) transportation/refrigeration/& marketing operation they’ll rot before they get 1/2 out of the country. So, again, the price signal mechanism is weaker than predicted.
Lastly, because the economies in coffee growing countries are weaker, and less diverse than in rich, northern countries often the best economic alternative to coffee is not to switch CROPS, but rather to switch COUNTRIES, ie migrate. Is that what The Economist magazine was advocating? Not from what I remember.
As for Fair Trade’s green-ness:
If you want to support sustainable or, more specifically organic, agriculture it helps to make a consumer choice that you know delivers a real financial incentive to the grower. Therefore its central that in coffee (& cocoa) ONLY dual-certified FAIR TRADE, ORGANIC coffee GUARANTEES growers a price premium. Specifically, small-farmer co-ops are guaranteed at least $1.51/lb for Fair Trade organic coffee (& at Equal Exchange we guarantee at least $1.56). In both cases that’s 20 cents/lb more than the non-organic Fair Trade price. And its way above the going market price for conventional (ie non-organic) coffee of $1.10/lb.
In contrast there is no guaranteed price for NON-Fair Trade organic coffee. Nor is there is any for Rain Forest Alliance certified coffee, or any other sustainably-certified coffee.
May 23rd, 2007 at 5:49 pm
Another example of the environmental benefits of the Fair Trade movement - this time with a tie-in to FSC certification…
Our line of sports balls is certified for both FSC and Fair Trade. More info on the environmental impact (good and bad) of sports balls on these posts: http://fairtradesports.com/?cat=8.
- Scott James
Fair Trade Sports
http://www.fairtradesports.com
Fair Trade Soccer Balls with FSC Certification!
May 23rd, 2007 at 6:25 pm
Thanks for the very detailed answers!
That’s exactly what I was looking for.
-Clayton
May 30th, 2007 at 5:11 am
I’ve just come across this blog and I am *very* impressed with the content! I found the point about fair trade wine to be eye-opening. Could anyone recommend a particularly good organic and fair trade wine? My wife and I try to buy local and organic/fair trade as much as possible, but I’d just never thought of it for wines before.
I’m not as familiar with the coffee market (just not a coffee drinker), but it’s interesting to read that coffee growers can only sell up to a portion of their crop at the “fair trade” price, and then after that have to sell at the conventional price. That is really unfortunate. I work in the shirts and other apparel business, and I’m pretty sure that all of the cotton that is grown and made into apparel according to organic and fair trade practices gets sold at the corresponding price point. Although, now that I’ve read this, I’ll be checking with my suppliers to find out if that is indeed the case.
Thanks all for a very interesting read!
Andy
http://www.sayitgreen.com
Organic, Fair Trade, Custom Printed Apparel