Fair Trade: News & Updates

In the investigative work titled Ecological and human dimensions of avocado expansion in México, profits resulting from this recent avocado boom “are concentrated among a few, powerful large producers, thereby limiting the social and economic benefits to the local community.” Juan, a small-scale farmer and Equal Exchange partner near the city of Peribán, provides context: “The majority of producers are smallholders, but newcomers tend to be large companies who are establishing themselves in the market.” With these new arrivals, he continues, “There is a larger profit that we as smallholders haven’t seen.” The profits raked in by larger companies most often end up in the hands of foreign ownership rather than benefiting the local economy. More yet, the market oversaturation brought on by these corporations drives down the prices paid to all producers.

The Fair Trade Alternative

Equal Exchange imports avocados exclusively from democratically structured, organic- and Fairtrade-certified cooperatives of small-scale farmers (each possessing under 10 hectares of orchard) in Michoacán. With direct weekly pricing negotiations, additional Fairtrade premiums paid to the cooperatives, and collaborative efforts to maximize efficiency, both parties strive to thrive ethically in an industry dominated by large, foreign-owned corporations.

As part of a cooperative, small-scale farmers have their avocados harvested and sold collectively. In doing so, they amplify their power within a market in which large-scale foreign corporations—and the packhouses that often serve as a bridge to them—wield undue control over pricing. In addition to economic benefits, the cooperatives foment positive ecological impacts in a region deeply affected by both local and global environmental trends. 

As if economic and environmental improvements aren’t enough, our partnering cooperatives also strive to bolster social services and general welfare in their respective communities. Such efforts are made possible by a “Fairtrade premium” of $1.356 per case of avocados that Equal Exchange tacks on to every purchase order. During the busiest times of the growing season, these premiums can amount to over $7,000/week (USD) paid to the cooperatives with the express purpose of reinvesting in their local communities. 

In November 2021, the Corporate Accountability Lab (CAL), in coalition with the Fair World Project (FWP), filed a lawsuit against the Hershey candy company as well as the certification label Rainforest Alliance. The consumer protection case suit was filed in the DC Superior Court, after CAL found cases of (forced) child labor, exploitive labor and wage theft at a number of Rainforest Alliance certified cocoa farms in West-African producing for Hershey. In the suit CAL and FWP accuse Rainforest Alliance and Hershey of false and deceptive marketing on some of their chocolate products. They bring forward the fact that labels like the Rainforest Alliance let consumers believe that the labeled merchandise is produced free from child labor, wage theft and environmental destruction. On many of the farms this is not true, and the lack of a living wage paid to the workers leads to a circle in which families have to rely on their children to work to keep themselves fed.

These working conditions have deep roots in corporate greed, a phenomenon that overweighs any ethics. The lower the price for the base product is, the more profit can be generated. In case of Hershey and the Rainforest Alliance. this greed shows its worst. In an effort to appeal to today's more aware consumers, companies cooperate with labels to distract from inhumane production conditions. This way labels and networks like Rainforest Alliance not only trick the consumers but also fail the workers who should be protected by them. 

Now, after almost 1.5 years, a key point was reached in the case on March 23, 2023. After dragging out the case, the defendants now filed a motion to dismiss it, arguing that Hershey as well as Rainforest Alliance already acknowledged the problems in their production chain. In a statement Hershey acknowledged "the existence of child labor and high deforestation rates" in the farming of cocoa beans, and stated that it is not guilty of false advertising since it "publicly acknowledged these challenges" and  that its claims are strictly "aspirational in nature." It gets even more absurd with Rainforest Alliance's excuse for child labor under its label. It stated that it never claimed that the label meant that certified farms are free from human rights and environmental abuse. Rainforest Alliance made clear that the seal "represents [Rainforest Alliance's] vision of sustainability as a journey of continuous improvement." It is clear though that this is not what consumers think the Rainforest Alliance label means.

In the end, false labels like Rainforest Alliance's do far more harm than good. A label means very little if human rights standards are still disregarded and farmers are under paid or don't even know about the certification. To actually end human rights and environmental abuses in farming and production, labeling organizations would not only need to pay fair wages but also create community based monitoring systems and long-term contracts with small, individual farms. Rainforest Alliance does none of this. 

In the end, the lawsuit's main goal is it to shine a light on this misbehavior and  to hold companies accountable for their actions and lies.  

The following article by the long time fair trade activist Kim Lamberty gives insight into the challenges Fair Trade businesses and producers face in a world run on profits and competition. In her years as an organizer and as the founder of the coffee non-profit "Just Haiti," Kim was confronted with a number of difficulties, one of which is pricing. As a fair trade business, Just Haiti requires paying  producers a living wage which can support them and their families. This ambition is hard to retain on a commodity market that keeps the price for a pound of coffee down at $1.90. For Just Haiti and other fair trade businesses that pay high enough to sustain small farms, it means they have to operate as a non-profit with volunteer labor outside of production. In addition to the low prices, rising inflation puts heavy pressure on producers and fair trade businesses.

While one might think that a rise in commodity prices would help farmers to sell their products at higher profits and lift them out of their fatal financial position, that is only partly true. Since most of the farmers living under the poverty line spend most their earnings on food and other utilities for their families, the higher commodity prices come back around and pull even more people into poverty. This exploitation of working families and the ongoing impoverishment becomes especially disgusting when taking into account the fact that quarterly profits in the U.S. non-financial sector have skyrocketed. Within the last two years, profits went up by more than 80%, adding up to a profit of $2 trillion in the 3rd quarter of 2022. To make such a rise in profits possible, corporations increase their prices under the veil of commodity prices, in many cases even surpassing the increase in production and commodity costs.

This kind of behavior by international corporations make it evident that there is more to the struggle for fair business trading than most people expect. If change is to come, production and prices of these goods have to be rethought. The first step is holding corporations accountable for the treatment of their workers as well as cutting dividends for investors as well as salaries and bonuses for CEO's. But it's not all on the businesses. For years, consumer pressure has kept prices low, keeping producers in poverty and actively depressing wages. It is apparent that these systematic problems require a systematic solution. 

To change this inequality, all of us can take measures. We need to organize and educate ourselves as well as our communities on ways to support those who struggle and oppose corporate greed. We can invest and buy from companies paying fair wages. We can make sure not to buy from companies with exploitive off-shore contractors, and we can support non-profits like the Quixote Center, which invest in small partner businesses in Haiti. The Quixote Center additionally works to invest national aid dollars into small community-based businesses to keep profits within these communities and out of the hands of exploitive corporations.  

As conscious people, we all must stand up against corporate crimes against workers, communities and the planet!

Today the buzz-phrase Fair Trade is omnipresent. With the rise of consumer awareness, our stores are flooded with Fair Trade labeled products. No matter whether it's organic farmer collectives or multi-billion dollar corporations like Nestlé or Unilever, everyone is looking to get a slice of the cake that is the Fair Trad market. But far too often, it might be a scam.

With the establishment of Fair Trade International in 1997, a number of environmental and labor standards were set and had to be fulfilled in order to be Fair Trade certified. The production and trade must be,

• sustainable
• free from environmental exploitation  
• free from exploitive labor
• free from child labor
• free from forced labor 

Since the introduction of Fair Trade International, new certification labels have been shooting out of the ground, many with far lower standards than Fair Trade International. This includes, for example, some of the most popular labels like the Rainforest Alliance, Fair Trade USA and Fair for Life. On many farms certified by these organizations, the working conditions and wages are indistinguishable from those of non-certified farms. Today it seems like none of the original standards are actually a necessity for a certification anymore. In 2022 an especially dramatic case of abuse came to the light 0f day. A Rainforest Alliance certified farm was found to use child labor in the process of harvesting and farming. Adding on to such malpractices is the fact that many workers are not even aware if their farm is "Fair Trade certified." Without the knowledge about the standards that should be upheld by certified farms, farm workers have little to no base on which they can speak out against the widespread exploitation. Exploitive labor, wage theft, child labor and hazardous working conditions are just as common on many farms certified by these and other Fair Trade label providers. 

As the popularity of Fair Trade labeled products increased, international corporations--in the hope of appealing to the more aware consumer base--began developing their on labels. These corprate labels often set the bar even lower than the Rainforest Alliance, etc. This sea of Fair Trade labels makes it increasingly more difficult for companies sticking to the Fair Trade International standards to keep up with the cheaper, mass produced competitive products. Furthermore, they lead to confusion among costumers overwhelmed by the sheer amount of different certifications. 

On top of costumer fishing, Fair Trade labels provide a number of other advantages to corporations. It allows an increase of pricing for newly-certified products, provides an image improvement, and green-washes the companies' labor and environmental exploitation. Over the years, consumers have made clear that they are more driven towards ethical products. This development has led to fair trade being used in public relation campaigns by corporations pretending to produce ethically. 

With this watering down of fair trade standards, more and more experts and activists criticize that:

• standards among the labels are not equal, leading to the acceptance of child labor on certified farms.
• the auditing is often sporadic or even non existent. In some industries, the inspections are carried out by the same companies who buy and resell the farmed goods. These companies often tend to certify farms as a means to rise the resale price. 
• even if auditing takes place, it often fails to find abuses. For farms, it is far too easy to hide wrongdoing like child labor or wage theft. The inspections are especially bad at detecting if workers have paid recruitment fees. This is a common procedure to trap workers in debt and often is evidence of forced labor, as the workers are required to clear their debt before being able to look for a less abusive workplace. 
• workers and farmers have little to no input on the implementation of fair trade standards. Till today, Fair Trade International is the only label provider that includes workers on their boards. In comparison, Fair Trade USA and the Rainforest Alliance boards are exclusively made up of corporate representatives. 

Overall, it is indisputable that the labeling and auditing industry has grown immensely over the last years and is pulling in massive profits. As long as Fair Trade labeling is not led by the affected work force, the vast majority of fair trade labels will remain as profit-generating tools for greedy corporations. 

5,087,500 avocados grown by 75 small scale farmers in Michocán, Mexico, supplying 500 food co-ops and grocery stores in the US. Economic impact: $4,532,500 paid to small-scale farmer co-ops. 

32,554,480 bananas grown by 873 small scale famers in Ecuador and Peru, supplying 450 food co-ops and grocery stores in the US. Economic impact: $5,229,063 paid to small-scale farmer co-ops.