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Bringing Fair Trade Home to the U.S.

By John Peck, IWW 

Ever wondered why the fair trade label only applies to products from outside the U.S.?

Why are all the fair trade certifies located thousands of miles away from the producers?

How can corporations that are so unfair towards workers, farmers, and consumers in the U.S. get away with selling and promoting themselves as fair trade?

What ever happened to the idea of applying fair trade principles in our own backyard?

Bringing Fair Trade Home to the U.S.

By John E. Peck, Family Farm Defenders

Ever wondered why the fair trade label only applies to products from outside the U.S.?

Why are all the fair trade certifies located thousands of miles away from the producers?

How can corporations that are so unfair towards workers, farmers, and consumers in the U.S. get away with selling and promoting themselves as fair trade?

What ever happened to the idea of applying fair trade principles in our own backyard?

It is pretty ironic to realize that virtually all of the certified fair trade products now sold in the U.S. – coffee, tea, cocoa, sugar, fruit, rice, olive oil, clothing, handicrafts, etc. – originate outside the country. This reality appears downright hypocritical when one understands that such a double standard could only exist thanks to a fundamental perversion of the fair trade model itself. More simply put, fair trade in the U.S. – like the organic sector – has come to suffer an acute case of corporate cooptation.

This wasn’t always the situation. When fair trade first came to Madison, WI a decade ago, the new Consumers for Fair Trade group made its debut with community organizing around two popular products – coffee and cheese. Within short order, Equal Exchange fair trade coffee was available in many locally owned coffee shops, and Family Farmer fair trade cheese from Cedar Grove was on the dairy shelf in local grocery co-ops. Back in the early heyday of fair trade, there was no distinction made between imported and domestic items, since it was held that everyone deserved economic justice– coffee pickers in Nicaragua and dairy farmers in Wisconsin alike.

This “fair trade for all” approach still guides much activist work in places like Madison in the 21st century. The Fair Trade Holiday Fair, which has been hosted by Community Action of Latin America (CALA) for ten years running (www.calamadison.org), includes all types of vendors selling both locally made and imported items, as long as they follow fair trade principles. Just Coffee, Madison’s 100% fair trade and fully unionized roaster (affiliated with the Industrial Workers of the World (IWW) – the only labor union that recognizes worker collectives (www.iww.org) has grown by leaps and bounds since its founding five years ago. Family Farm Defenders has now sold over 12,000# of cheese, worth $50,000+ in fair trade income for struggling dairy farmers. In spring 2005 Just Coffee and Family Farm Defenders teamed up to launch a fair trade school fundraising initiative, enabling dozens of schools to offer fair trade items such as coffee, tea, cheese, and chocolate to parents and children who would rather not have to peddle corporate junkfood.

Unfortunately, the dark side of neoliberal globalization has also reared its ugly head, and in many communities market-driven fair trade has eclipsed all other options. When Starbucks first came to Madison in 1998 to open its flagship outlet on State Street near UW, the manager dismissed fair trade and implied that local coffee drinkers (and protesters) were ignorant of trends in the wider gourmet coffee world. Of course, years later Starbucks has now become the largest fair trade coffee seller in the world, even though fair trade still accounts for less than 2% of its multi-billion dollar business. Like Walmart (which will soon claim the mantle of largest organic grocer in the U.S.), Starbuck’s token effort appears larger than life when it’s the biggest gorilla on the block. Those fair trade advocates and socially responsible businesses, which laid the foundation for “another world is possible,” now find themselves marginalized by opportunistic carpetbaggers.

Let’s look closer at some of the obstacles that now frustrate efforts at real fair trade:

Certification: It is important to have independent third party verification of standards. Unfortunately, much certification in the U.S. has now become a dumbing down exercise for consumers and a costly extortion tactic for producers. Rather than having an informed and meaningful economic relationship as fair trade implies, shoppers have been trained to look for a trademarked logo and put their conscience on autopilot. Certifiers like Trans Fair have sought to create their own monopolies and many would argue have now fallen captive to their largest customers, like Starbucks. In the worst case scenario, certifiers end up running interference as corporate public relations apologists since that is how their bread gets buttered. Conflicts of interest abound, undermining public confidence in the entire fair trade system. Meanwhile, impoverished rural producers are stuck in the position of paying thousands of dollars for a dubious certification procedure that seems more like another version of neocolonial exploitation. As with free trade, many in the South would argue that the North has no business unilaterally imposing fair trade conditions either.

Labor Rights and Living Wages: The primary objective of fair trade is to bring economic justice and workplace dignity to farmers and workers. It would seem odd, then, that the fair trade price for the sector’s flagship product - coffee - has been “stuck’ at $1.26 per pound ($1.41 per pound for organic) for over a dozen years now. A real fair trade system would have the producer in the driver seat, determining a parity price that covered their cost of production and gave them a decent household income (adjusted for inflation). Realizing how wrong it is when a few powerful buyers wield undue influence to suppress market prices, Just Coffee is now paying between $1.56 and $2.00 per pound to its suppliers. A similar situation applies to the Family Farmer fair trade cheese project where producers have enjoyed a 25% gain in their return on rBGH-free milk over the last few years. The $20/100# they now receive is nearly double that set by corporate traders in Chicago (www.familyfarmdefenders.org). Workers at both Cedar Grove Cheese and Just Coffee earn a living wage, plus benefits, as part of the fair trade system. In contrast, Starbucks is trying to bust an IWW-led union drive amongst its barristas (www.starbucksunion.org) and even uses prison labor to bag its fair trade coffee.

Transparency: Another principle of fair trade is democratic accountability, and this is rigorously enforced against producer cooperatives in the South, whose books must be constantly open to public scrutiny. Yet, this rule does not apply to the same corporations in the North who reap the greatest profits from fair trade. Apparently, the commodity chain enters into a black hole of proprietary information once it crosses the U.S. frontier. While 100% fair trade roasters like Just Coffee are proud to post their producer contracts on their website (www.justcoffee.net) and share solidarity stories of the relationships they’ve developed with communities from Chiapas to Ethiopia over the years, this is not the case for a player like Starbucks. Instead, one hears tales of price gouging, corruption, insider trading, racketeering, ghost buyers – all the worst hallmarks of corporate capitalism. Sadly, there is no internal policing mechanism left when the major fair trade certifiers are bought off.

Amidst all this doom and gloom, there are encouraging countervailing pressures. In 1999 the Agricultural Justice Project (AJP) issued a call for domestic standards in sustainable agriculture and this soon led to an excellent collaborative paper on this very topic (www.rafiusa.org/pubs/Social Justice?_final.pdf). A local fair trade network has cropped up in the Twin Cities, involving producers in MN and WI (www.localfairtrade.org), and in August 2006 Organic Valley hosted the second domestic fair trade working group strategy session at its headquarters in La Farge, WI which drew 75+ activists from across North America, including several migrant farmworker leaders. Just Coffee has joined with twenty other ethical fair trade roasters in an umbrella organization, Cooperative Coffees (www.coopcoffees.com), to better pool resources and mount a serious challenge to the corporate fair traders whose only real interest is profiteering. United Students for Fair Trade (www.usft.org) continues to organize both on campus and off, educating the next generation of fair trade consumers, holding would-be fair trade outfits accountable, and building coalitions with other struggles for worker rights, food sovereignty, and global justice. One such joint project is the Justice From Bean to Cup campaign that is targeting – you guessed it – Starbucks.

Will fair trade go the way of organic – just another marketing moment ripe for corporate picking? Or can a grassroots coalition of consumers, workers, and farmers reassert that people still come before profit under a genuine fair trade system. Stay tuned!