Intention of fair trade
As Daryl Reed explains, the intention of fair trade is to develop long term relationships with micro-producers of goods that are based on trust and solidarity. Fair trade initiatives seek to help small producers gain greater access to markets, technology, and knowledge. The relationships between the small producers and the fair trade organizations are built upon the basis of being long term. The organizations also look to help producers develop their product quality and increase their income by broadening the number of workers, and the technology available to them. By doing this the advantages of using a co-operative approach begin to reach the community at large through a strengthened and better-organized infrastructure (2009).
Origins of fair trade
Though the origins of fair trade are somewhat debated, it is generally accepted that it started with charitable organizations post World War II (Reed, 2009). When we think fair trade today it is often coffee or bananas that pop into our minds, however, it was originally focused on handcrafts (Berger, 2008). Fair trade has again come to the forefront of social issues in the past couple of decades because of social injustice being caused by deficits in trade agreements such as the North American Free Trade Agreement. These agreements have led to prices of exports from developing nations dropping as much as 50%, leaving many small producers struggling, and often forcing them to seek employment in areas that are not subject to health and environmental standards (Palmberg, 2007). It was in response to these trade agreements that organizations in support of fair trade deemed themselves as ATOs or Alternative Trade organizations. These ATO’s along with the Max Havelaar Foundation are credited with developing the first labeling initiative to identify fair trade goods within the market (Reed, 2009). The importance of fair trade is only on the rise and while to many consumers, it may seem a distant other type of worker that is being affected negatively by these trade agreements, the issue actually hits much closer to home. As author Elizabeth Palmberg (2007) points out “In the U.S., the poorest 40% of households are making less than they did in 1975 (taking inflation into account), while only the top 20% of households saw their share of income rise” (p.26). It is well within the capabilities of trade agreements to protect not only the jobs and livelihoods of the small producers in our nation, and the world over, but it is also in their power to increase access to insurance, clean air, and water. Yet, all of these necessities are frequently referred to as trade barriers and countries are frequently pressured to leave them out of trade agreements (Palmberg, 2007). Fair trade seeks to remedy these forgotten options by paying the micro-producers they have teamed with a livable wage that is above free-market price, and help lead them to financial independence (Alexander & Nicholls, 2006).
Challenges in gaining consumer support
One of the main challenges in gaining consumer support for fair trade is the lack of knowledge easily available to the average consumer. Without a sufficient and credible amount of information, consumers remain dubious that their decision to purchase fairly traded goods can be of significant value (Pelsmacker & Janssens, 2007). A MAFF study conducted in 2000 and referenced by Patrick De Pelsmacker and Wim Janssens (2007) found that “around 50% of consumers want more information on labeling and have difficulty finding the information they need to make a purchasing decision” (p.365). This desire for more information is supported by the findings of Andrew Alexander and Alex Nicholls (2006) which states “Consumers, in turn, appear to demonstrate an increasing interest in the goods and services they consume, typically looking for more information concerning their provenance and background.”(p.1237)
This absence of adequate credible information pertaining to the fair trade issue frequently leads to consumers forming negative attitudes about fair trade. This is significant because it has been repeatedly shown that attitudes influence the decision to purchase (Pelsmacker & Janssens, 2007). The importance of cultivating both knowledge and positive attitudes towards fair trade products among consumers cannot be overemphasized. Patrick De Pelsmacker and Wim Janssens (2007) found in their study of Belgian families, that when faced with ethical purchasing a lack of information, incorrect information, and unclear information negatively affects the likelihood of that consumer to make a purchase (p.365). Nurturing consumer involvement lends itself to brand or cause loyalty and the spreading of information via consumers sharing what they have learned and how they feel about fair trade with family, friends, and co-workers (Alexander & Nicholls, 2006).
Benefit from fair trade initiatives
As the world is exposed to what fair trade means they will inevitably, also learn how they personally stand to benefit from becoming involved with fair trade initiatives. As Kate Fletcher (2008) explains, producers, consumers, and companies all stand to benefit when “soft” or cultural solutions are favored over “hard” or technology-based solutions (p.41). In her book, “Hand Made Nation” Faythe Levine (2008) shares firsthand the feeling of empowerment a small producer can gain from selling goods they have created themselves and how having a platform to bring their products to the public encourages producers to “take their lives into their own hands” (p.ix). This sense of empowerment is shared with consumers who purchase fairly traded goods often because they have formed a connection to the cause. In forming a relationship with the fair trade movement, consumers have shifted their definition of what constitutes product value to include the ripple effects generated by its purchase (Alexander & Nicholls, 2006). Another benefit to the consumer who purchases fair trade goods is that the selection is more diverse specifically, in regards to handcrafts; which showcases the talents and creativity of people all around the world (Heimerl & Levine, 2008). The purchase of fair trade goods also encourages companies to include them in their businesses, because of the loyalty of the consumer to the cause. One example of this is Whole Foods who now carries the World of Good brand of fair trade products (Berger, 2008). Carrying this line has encouraged repeat patronage of their store. It is also to a company’s advantage to utilize the techniques of sustainability and fair trade because as author Kate Fletcher (2007) says “They can lead to more efficient resource use, better relationships with workers, lower costs, and valuable evidence of Corporate Social Responsibility activity.” (p.42)
When fair trade is at work, the entire community and mother earth also stand to benefit. When small producers feel supported and are able to be self-sufficient they pour the rewards they have reaped back into their communities; sharing their resources, knowledge, and encouraging others to join them (Heimerl & Levine, 2008). This concept is easily evident in the movement to incorporate fair trade principles domestically (Brown & Getz, 2008). Domestic fair trade offers a community the chance to eat ecologically sound produce because, farmers involved in producing fair trade crops are educated on crop rotation, how to nurture the land, and alternatives to pesticides (Reed, 2009). While the community is their consuming healthier produce, it is also supporting the small family based farms in their community; which as a result of the increasing trend to import produce from foreign nations, frequently struggle to stay afloat (Brown & Getz, 2008). As consumers purchase from these small producers they also encourage a cultural shift in consumption that benefits the environment (Heimerl & Levine, 2008). However, it is not only the products of fair trade farmers that are beneficial to the earth. The producers of fair trade handcrafted goods are also good for mother earth because they are often made of recycled or repurposed goods (Heimerl & Levine, 2008); which aids in decreasing what ends up in our landfills. The environment also benefits because these products are made by small producers, and not in large factories, meaning the pollution they cause is nearly non-existent (Fletcher, 2008).
Tensions within the fair trade community centers
Even though the benefits of fair trade are numerous, there are still hurdles that must be overcome before fairly traded goods become widely available. One of the biggest tensions within the fair trade community centers around whether corporate involvement should be limited to retail, or if corporations should be allowed to become certified in fair trade goods (Reed, 2009). The argument against allowing corporations to become licensed in fair trade is; that in allowing them to become licensed, the principles of fair trade that center around forming long-term relationships with small producers will be compromised. Large corporations are able to exploit the fact that contracts with producers technically need only be for the length of a season. This chance to switch producers is passed on to the small producers in a way that leads them to then fear the loss of business and their livelihood causing them to comply with the demands of the corporation; which often focus solely on improving quantity and quality instead of social causes (Reed, 2009). Another issue raised by corporate licensing in fair trade is, that because large corporations do not deal solely in fair trade products like the ATOs, and are not dedicated to the principles of fair trade they often pay only the minimum premium required, while still reaping the benefits of social responsibility in the consumer’s mind (Reed, 2009). One example of how corporations do this is although only a nominal percentage of the coffee Starbucks serves is fair trade, they are able to advertise that they carry fair trade, encouraging the mind of the consumer to associate Starbucks with fair trade, which as previously stated encourages loyal patronage (Pelsmacker & Janssens, 2007). Corporations like Starbucks are not required to deal solely in fair trade goods they are able to offset the higher cost of fair trade by transferring it to the high profit margin of their non-fair trade products, an option which ATOs are unable to compete with because of their dedication to fair trade values (Reed, 2009). This argument against corporate involvement in fair trade is supported by the finding of the 2009 study conducted by Valery Bezencon and Sam Blili which found that “The positive attitude of the general public towards Fair Trade provides a convenient possibility to build an image of a socially and ecologically responsible company, which might indirectly increase the sales of other products” (P.108).
While arguments against corporate involvement in fair trade are valid, proponents for corporate involvement are quick to counter them with the argument that corporate involvement has led to a tremendous increase of exposure for fair trade initiatives (Pelsmacker & Janssens, 2007). The opportunity for fair trade to break into the cotton and flower markets came as a direct result of exposure created by corporations selling fair trade products (Bezencon & Blili, 2009). As the supporters of corporate involvement would point out, the larger the fair trade market becomes, the more small producers it is able to help, which is, after all, one of the founding principles behind fair trade.
As so often is the case it seems that the true solution to this debate lay somewhere in the middle. If those involved on both sides of the debate are able to recognize that at its core, the issue is not simply about being for or against corporate involvement, but rather, as stated by Gendron, Bisaillon, and Rance (2009) it represents “the challenges inherent in finding economic institutionalization acceptable to social-economic movements.” (p.63). Then a possible solution would be, to utilize the scale developed by Low and Davenport as discussed by Bezencon and Blili (2009) to evaluate a corporation’s motivation for entering the market and their level of engagement with fair trade values (p. 96). A corporation’s acceptance into the fair trade market would then be based on this evaluation. The goal of this solution would be to weed out those corporations who seek to reap the rewards of carrying fair trade without having to put in the effort required to uphold fair trade values. In doing this, the fears of those against corporate involvement would be appeased, by ensuring that the message of fair trade continues to be conveyed undiluted by corporate bureaucracy while also pleasing those fighting for corporate involvement (Bezencon & Blili, 2009).
Future of fair trade
In looking to the future of fair trade, one can sense the opportunity for a brighter future for all those who participate in fair trade initiatives, if the goal of creating a stronger model is achieved. It may seem hard to believe that simply supporting the fair trade movement can have a lasting impact but as Gendron, Bisaillon & Rance (2009) found “New social-economic movements contribute to an ethical restructuring of markets.” (p.75). The key to achieving this ethical restructuring is to create a link in the consumer’s mind between supporting fair trade when they shop and lessening the suffering felt daily by micro-producers, both here, in America and abroad. Then as consumers head out to purchase a unique birthday gift for a dear friend, or bananas for their morning cereal they are reminded that they have the opportunity to create lasting good, which would undoubtedly make Mr. Wiesel proud.