This is part of a series on “The Future of Fair Trade,” written in collaboration with Fair Trade USA. A 501 (c) (3) nonprofit organization, Fair Trade USA is the leading third-party certifier of Fair Trade products in the United States. To follow along with the rest of the series, click here.
We’ve all heard the stories about horrible working conditions in factories and on farms overseas. But, for the average consumer overwhelmed with a multitude of options in the grocery store (not to mention balancing work, childcare, home maintenance, family, friends, and personal health), doing something about it can feel impossible. Choosing Fair Trade products is one easy way for consumers to use their dollars to vote for positive change. And they are. Studies have shown that consumers say that they’re willing to pay more for fair trade – 5-10 percent more on average (the gap between self-reported behavior and actual behavior notwithstanding).
Fair Trade empowers farmers and workers to fight poverty through trade. Here’s how it works: Fair Trade certified farmers can earn a higher price per pound for their produce and other agricultural products, meaning more money for community development and family basics like food and education. But, to become certified, a farm or farmer must comply with social, labor and environmental standards set forth by the certifier. That’s not all. Fair Trade is a true triple bottom line approach with benefits for corporate interests as well.
We at TriplePundit call Fair Trade a win-win-win. But there’s a lot of work still to be done. Despite its successes, the Fair Trade movement reaches less than 1 percent of of the 2 billion people living in poverty around the world. How can groups that are passionate about making change work together to solve an intricate and complicated problem that spans the globe?
Fair Trade USA is taking a collaborative approach to facilitating change. The group recently convened a day-long, multi-stakeholder meeting of groups that are committed to using markets to improve the lives of impoverished communities. Each of the groups in attendance is working individually to tackle a small component of a staggeringly large and complicated problem, but by teaming up, they can allocate resources more efficiently. The meeting included 37 leaders from 20 organizations spanning the supply chain: farmers’ rights groups, NGOs, foundations and companies that procure fair trade products. The group included the Clinton Giustra Sustainable Growth Initiative (CGSGI), the Skoll Foundation, Fundación Avina and, of course, Fair Trade USA. Bill Clinton also made an appearance.
To find out more, I spoke with Mary Jo Cook, Fair Trade USA’s Chief Impact Officer. Cook shared her view of the benefits of taking the time to do some inter-agency collaboration – in short, “Collaboration is the fastest path to launching more Fair Trade products, increasing percentage of goods that are Fair Trade, and increasing education efforts to promote fair trade to consumers.”
Talk is easy. I was curious to hear about the tangible benefits that emerged from the meeting.
Cook was happy to share an example:
Whole Foods is doing more Fair Trade produce. That’s happening right now. But, in order to sell more Fair Trade, they need to increase their supply. In order to get farmers certified, they need to be trained in [all the compliance details]… so one of the things that came out of this meeting was a small group of some of the NGOs, some of the produce suppliers, Whole Foods, and foundation people all working together to determine how to get more farmers certified so that Whole Foods can sell more Fair Trade produce.
One thing that all the attendees of this gathering had in common is that they all believe that people — farmers and workers — should be central to the sourcing strategy of every business, and Fair Trade is one excellent way to facilitate increased support for the folks at the beginning of the supply chain.
This doesn’t have to be a business burden.
The business opportunity
Fair Trade doesn’t just represent a righting of a wrong. It also represents a tremendous business opportunity for forward-thinking organizations. In Cook’s words, “Markets are flawed. They don’t reflect the true cost of degrading natural resources, the true cost of unjust labor practices or frankly, and more excitingly, the hidden opportunities for long term value creation.”
Once business leaders understand that their raw materials may be at risk due to environmental degradation or farmers who leave the land because they can’t make enough money to feed their families, protecting access to those raw materials through a program like Fair Trade makes perfect business sense. Corporate social responsibility is no longer “just a feel good thing” where organizations can get a pass for donating some money now and then. By integrating CSR into natural business planning – it is no longer charity, it’s good business.
Cook shared another great example:
Look no further than the cocoa industry. For decades, cocoa farmers have not made enough money to feed their families. Most cocoa farmers don’t know what a chocolate bar looks like. They get a tiny tiny, tiny fraction of the value of that end product. If you can’t feed your family, and you can’t send your kids to school, do you think you’re going to invest in sustainable farming techniques or quality improvements or productivity improvements? Without these changes, its only a matter of time before there is a shortage of cocoa. So the industry has woken up to the fact that they have to invest in the people and the planet if they want to stay in business. And that’s why you see major cocoa companies saying, ‘You know what? We need to invest in certified cocoa.’
This is not altruism, this is enlightened self-interest.
The proliferation of Fair Trade goods appearing on market shelves shows that this model is working. However, it is causing some confusion in the marketplace – eco-label confusion is a real problem.
When it comes to Fair Trade, there are many different groups certifying products, each with its own slightly different certification scheme. While this can be confusing for consumers, Cook explains that too many labels is a much better problem than too few:
Fair Trade is only a tiny fraction of global agriculture sales. We have so much opportunity to do so much good for so many more people. In this space, the more people who are innovating around a common goal, the higher the likelihood of success. Label proliferation is a sign of more organizations trying more ways to help fight poverty through trade. Given that fair trade has so much opportunity for growth, at this stage, I think that’s a good thing.
When asked if she’d be inclined to buy a competitor’s product as a consumer, Cook said, “Absolutely!”
Support for this piece provided by Fair Trade USA – Opinions are 100% my own