TRADE: Fair Is Not Easy

from IPS News

By David Cronin

BRUSSELS, From its humble beginnings in the 1950s, the fair trade movement has gone from selling coffee at left-wing political meetings to having whole sections devoted to its fruit and chocolate products in European supermarkets. The last five years have been especially buoyant; after witnessing annual growth rates of up to 40 percent, the sale of fair trade products hit 2 billion euros (3.2 billion dollars) in 2007.

Yet the expansion has not been trouble-free.

In 2005, Nestlé brought out a brand of coffee called Partners, bearing the widely recognised fair trade logo. One of the world's most boycotted companies, the Swiss multinational has long been accused of aggressively marketing its baby milk products in a way that has discouraged mothers in poor countries from breastfeeding. The World Health Organisation has estimated that 1.5 million infants die each year because they are given milk products mixed with unclean water, rather than breast-fed.

Nestlé's chairman Peter Brabeck-Letmathé has dubbed as "extremists" those who advocate that access to water should be recognised as a universal human right.

Fairtrade Labelling Organisations International (FLO), which bands together groups responsible for awarding fair trade certificates, admits lessons have to be learnt from the Nestlé episode. "It was a surprise for the full (fair-trade) movement," its spokeswoman Gelkha Buitrago told IPS. "It created a lot of controversy."

Nonetheless, she defends the granting of fair trade labels to firms whose overall conduct has come under fire from anti-poverty activists. "We don't endorse companies," she added. "We put labels on practices, and we try to guarantee that they fulfil ethical standards."

FLO believes that fair trade sales have brought benefits to more than 1.4 million small-scale producers in poor countries. The core principles behind fair trade are that producers are paid a stable minimum price, so that they are not completely at the mercy of volatile markets, that conditions of labour are good, and that the environment is respected.

Over the past year, fair trade has become increasingly mainstream, particularly in Britain. Sainsburys, a leading supermarket chain, has decided that all its bananas should be fair trade. Its rival Co-Op has followed suit for the tea and coffee that it sells.

Meanwhile, Tate & Lyle has announced the biggest ever switch from conventional products to fair trade for a British firm. By the end of 2009, it hopes that 100 percent of its retail branded sugar will be fair trade. This should provide Belize, the Central American country where the sugar is being sourced, with a so-called social premium worth two million pounds (4 million dollars) in the first year, according to the company.

Both the successes and the challenges for the fair trade movement were debated at a conference held in Brussels Apr. 16. It was organised by the Technical Centre for Agricultural and Rural Cooperation (CTA), a European Union-financed body promoting farming in Africa, Caribbean and Pacific (ACP) countries.

One problem facing the fair trade movement is that companies are increasingly using labels other than the recognised fair trade one to claim that they adhere to high social or environmental standards.

Despite the confusion that a proliferation of different labels can cause, it is unlikely that the European Union will introduce binding rules for fair trade certification. Liselotte Isaksson, a European Commission official dealing with trade and development issues, said that the EU executive regarded labelling schemes as private initiatives. "It wouldn't be appropriate or beneficial for the Commission to try and regulate in this area," she argued.

Anja Osterhaus, coordinator of the Fair Trade Advocacy Office in Brussels, stressed that the fair trade movement is actively involved in lobbying for a more just system of international commerce. "We campaign against the practices of multinationals but we also constructively engage with companies that want to change," she said.

Stephanie Barrientos from the University of Manchester questioned how sincere major retail outlets are in promoting fair trade. "Some supermarkets do have a genuine commitment," she said. "Others are just jumping on the bandwagon."

Christopher Wunderlich from the United Nations Conference on Trade and Development suggested that greater research is needed on fair trade. Information is often based "on anecdotes or just case studies," he said.

Mamadou Outtara from the Association of African Cotton Producers in Mali urged more efforts to ensure that money made from fair trade sales reaches the poor. "If we look and see what consumers pay and what reaches the producer, there is room for improvement," he said. "We have got to aim for fairness."