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Fair Trade: Spreading The Wealth

Sharon Cullars

CHICAGO - Before the advent of the Fair Trade system some 60 years ago, an average farmer in Ecuador could expect to receive only a few cents per pound for his crops -- barely enough to sustain himself, his family, and his farm.

Middle distributors often abused the system, shortchanging farmers out of a decent livelihood while keeping profits for themselves. With no other way to sell their goods on the global market, the defrauded farmers had little recourse but to accept the low prices.

Fair Trade broke through this abusive cycle, empowering small farmers around the world to finally command competitive prices for their crops. According to TransFair USA, which certifies Fair Trade goods around the world, a family of four in Ecuador needs about $9.95 a day to provide for basic necessities; non-Fair Trade farms earn as little as $3 a day, a costly deficit.

Fair Trade ensures not only that farms in developing countries thrive, but that farmers can afford to feed their families and send their children to school. It also supports farmers who practice environmentally sound farm management. And because only democratic farm cooperatives can be certified as Fair Trade, democracy gets a boost too, while farmers are given a voice in how their cooperative funds are used.

How the System Works

The establishment of democratic cooperatives is just part of the minimum standards set by the Fairtrade Labeling Organizations (FLO), an umbrella group headquartered in Bonn, Germany that oversees and sets standards for fair trade producers. Generally, to sell goods under the Fair Trade label, small farmers must have formed organizations (such as cooperatives or associations) that contribute to the social and economic development of each of their members as well as their overall communities. All members must have a say in organizational matters.

At a minimum, the organizations must show that Fair Trade benefits will reach all farmers or workers; that there is a potential for development within their association; and that the benefits of joining the Fair Trade system will lead to effects and developments not otherwise attainable.

Fair Trade certification requires specific standards for each product, as well. For example, Fair Trade coffee must either be Arabica or Robusta crops. Both buyer and seller must procure a stable long-term relationship and abide by other international standards.

Most important, buyers must agree to pay sellers at least the Fair Trade Minimum Price set by FLO. For example, in Nicaragua, chocolate runs $0.80 per pound, while coffee growers command at least $1.26 per pound. If certified as organic, both are guaranteed at even higher prices. Compare these prices with the $0.40 per pound global middlemen pay non-Fair-Trade farmers for chocolate or the $0.50 per pound they pay for coffee.

Fair Trade minimums generate significantly higher profits for growers, who in turn can invest their monies for their families' futures as well as bolster the agricultural infrastructure of their respective communities.

Better Prices Just the Beginning

One of the other major benefits of Fair Trade is the elimination of child labor, which is prohibited under the regulations governing Fair Trade certification. Although most poor farmers would rather send their children to school, too often their children are forced to help out on the farm. A 2002 Human Rights Watch report found that in Ecuador, children as young as eight were being used as cheap labor on banana plantations, earning an average of $3.50 a day.

But in Fair Trade areas, child exploitation is dwindling even as communities build new schools. In the Segovia region of Nicaragua, where coffee is a major Fair Trade crop, 40 cooperatives under PRODECOOP (Promotora de Desarollo Cooperativo de Las Segovias) have established a scholarship program for dozens of children to attend primary and secondary school. The program also provides books and backpacks for over 2,000 children.

In African nations like Ghana, where cocoa is a strong crop, Fair Trade earnings have enabled farmers to invest in schools as well as health care facilities, which have improved the overall conditions of the cooperatives where they live and work.

Conditions are also improved through holistic farming, which Fair Trade certification encourages by prohibiting overuse of chemicals and soil-destructive farm management. In rice-growing countries such as India, Fair Trade certifying bodies regulate the use of chemicals in rice cultivation, and farmers are taught to stabilize the soil and the farm environment, promoting a sustainable agriculture that creates organic crops and protects the farmers' health as well.

In other parts of the world, sugar growers under Fair Trade have learned to process their sugar crop to prevent pollution of the surrounding ground, water, and air.

As their power has increased, Fair Trade farmers have also found an increased sense of dignity as they can now build new homes, and provide better food and drinkable water to their families. Fair Trade has improved working conditions for both men and women, and in some places, women now have maternity leaves.

"With Fair Trade income we have made improvements in our community," says Nicaraguan Alexa Marin Colindres, a member of PRODECOOP Coffee Cooperative, in an article posted by The New York State Labor-Religion Coalition. "Before, we slept on the ground and did not have basic amenities. Now some of us have floors, some furniture, sanitary services, and potable water. If we sold all of our production at Fair Trade prices, our dreams would come true."

Another worker with an Indonesian cooperative tells how he is now able to send one of his children to medical school while the other is studying to be a midwife, all because he now sells his goods under the Fair Trade label.

The Future of Fair Trade

Despite the benefits of Fair Trade, not all farmers in developing countries are opting in. Some critics believe the main obstacle is the required cooperative system, which might not be an option for some farmers. Others assert that Fair Trade is an avenue for niche products only, leaving farmers of other products out in the cold.

And without demand, Fair Trade crops would falter in the global market.

But there is little doubt that Fair Trade is working for many small farmers who have been able to meet the strict requirements. And demand is growing each year as more Western markets and shops offer Fair-Trade-certified coffee, tea, rice, flowers, vanilla, and even wine. In the United States and England, some shops offer crafts, as well.

To promote Fair Trade, a coalition of dedicated consumers, merchants, and organizations formed The Fair Trade Alliance. Members include a Quaker house in Washington, DC, a Pilates studio in New York, and a community television station in North Carolina. Increasingly, other businesses and organizations are pledging to provide Fair Trade products for their social gatherings and meetings.

Sixty years ago, Fair Trade began as a way to distribute craftwork from developing countries, and ensure an equitable return for the craft producers. Now, it includes mainstay crops from around the world.

It remains a partnership between consumer and farmer, where long-term contracts for fair prices ensure that small farms and producers can thrive, keeping the global economy stabilized even as global conditions become more equalized.

Sharon Cullars is a writer and artist living in Chicago. This article was the winning entry in OneWorld's Citizen Journalism Awards on the topic: "How selling goods under the Fair Trade label has improved the lives of people who produce goods such as coffee, tea, chocolate, rice, flowers, and more." The monthly contest is run in conjunction with the citizen journalism Web site

© 2008 One World

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