Eric Fichtl

 
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The Fair Trade Movement in Historical Perspective

Explaining the “In and Against the Market” Predicament

 

CONCLUSION

This thesis has explored the different phases of the alternative/fair trade movement’s development, from its early roots in Christian goodwill trading and third world solidarity, to the movement’s increased formalization and entry into the mainstream during the last two decades. As an analysis of Fridell’s work helped to clarify, fair trade’s history is embedded in a larger movement for reform of the conventional trade system that sought to insulate the most vulnerable producers from the worst effects of market turbulence. Fridell’s insightful linkage of the shift toward fair trade mainstreaming and the ascendance of neoliberalism served as a basis for delving into the core tension that mainstreaming has unleashed in the movement: the position of fair trade as in or against the conventional market. That fair trade, through the device of certification standards and consumer-facing labels, grew rapidly after entering the conventional markets can certainly be attributed in part to the retreat of statist protectionism amid the rise of neoliberalism and its attendant emphasis on voluntarist solutions rather than regulatory controls. However, I have tried to demonstrate that fair trade realists’ decision to pursue their objectives by entering the mainstream was consistent with the movement’s core commitment to helping marginalized producers, even as mainstreaming sparked philosophical and strategic soul-searching between the movement’s idealist and realist practitioners.

By proposing an analytical model of idealist and realist fair trade, and by tying this framework to historical developments in the movement, I examined the bases of real strategic differences within the movement. But while noting these differing tendencies, I have also demonstrated that the realist and idealist—or the “in and against”—positions are not mutually exclusive and are in fact interconnected and interdependent.

Above all, the idealists and realist positions in fair trade concur that the life conditions and needs of marginalized producers should not be abstracted out of trade relations, and that profit is not the ultimate determinant of value or success in trade. While pursuing variant strategies derived from differing prioritizations and historical tendencies, idealist and realist fair traders continue to build and operate a system of trade that rejects the narrow conventional focus on “economic man” and proposes in its place the increased humanization of trade.

Appendix 1

ABBREVIATIONS AND ACRONYMS USED IN THE THESIS

APPENDIX 2

FLO STANDARD PRINCIPLES OF FAIRTRADE FOR PRODUCERS

Source: FLO website, “Producer Standards”: http://www.fairtrade.net/producer_standards.html

Fairtrade Standards distinguish between minimum requirements, which producers must meet to be certified, and progress requirements that encourage producer organisations to continuously improve in all standard’s areas and to invest in the development of the organizations and their producers/workers. This concept is developed for the target group of Fairtrade: disadvantaged producers. It encourages sustainable, social, economic and environmental development of producers and their organizations…

Social development
For small farmers Fairtrade Standards require an organizational structure that allows the farmers to actually bring a product to the market. All members of the organization need to have access to democratic decision-making processes and as far as possible participate in the activities of the organization. The organization needs to be set up in a transparent way for its members and must not discriminate any particular member or social group.

For hired labour situations the Fairtrade Standards require from the company to bring social rights and security to its workers. Some of the core elements are: training opportunities, non discriminatory employment practises, no child labour, no forced labour, access to collective bargaining processes and freedom of association of the workforce, condition of employment exceeding legal minimum requirements, adequate occupational safety and health conditions and sufficient facilities for the workforce to manage the Fairtrade Premium.

Economic development
For all products Fairtrade Standards require the buyers to pay a Fairtrade Minimum Price and/or a Fairtrade Premium to the producers. The Fairtrade Minimum Price allows the producer to cover the costs of sustainable production. The Fairtrade premium is money for the farmers or for the workers on a plantation to invest in improving their livelihood. Premium money in this sense is meant to improve the situation of local communities in health, education, environment, economy etc. The farmers or workers decide themselves on what are the most important priorities for them and manage the use of the Fairtrade Premium.

Also, Fairtrade Standards require buyers to give a financial advance on contracts, called pre-financing, if producers ask for it. This is to help producers to have access to capital and so overcome what can be one of the biggest obstacles to their development. This promotes entrepreneurship and can assist the economic development of entire rural communities.

Environmental development
Fairtrade Standards include requirements for environmentally sound agricultural practises. The focus areas are: minimized and safe use of agrochemicals, proper and safe management of waste, maintenance of soil fertility and water resources and no use of genetically modified organisms. However, Fairtrade Standards do not require organic certification as part of its standards. Higher costs for organic production are considered though, by higher Fairtrade Minimum Prices for organically grown products.

Additional participant-specific standards
Besides these common principles, there are Fairtrade Standards specific to different participants in the system. More information is available at the following web addresses:
For small farmer organizations: http://www.fairtrade.net/sfprinciples.html
For hired labor situations: http://www.fairtrade.net/hlabourpincip.html
For traders: http://www.fairtrade.net/trade_standards.html

FLO Product Standards, including minimum prices and premiums
FLO develops product standards documentation indicating the certification requirements for fair trade products, including minimum price and premium. In some cases, there are two documents per product (one for small-scale producers and another for hired labor). All of this documentation is available beginning at the following web address:
http://www.fairtrade.net/product_standards.html

APPENDIX 3

IFAT TEN STANDARDS OF FAIR TRADE

Source: IFAT website: http://www.ifat.org

IFAT prescribes 10 standards that Fair Trade organizations must follow in their day-to-day work and carries out continuous monitoring to ensure these standards are upheld:

Creating opportunities for economically disadvantaged producers
Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.

Transparency and accountability
Fair Trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners.

Capacity building
Fair Trade is a means to develop producers’ independence. Fair Trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets.

Promoting Fair Trade
Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing.

Payment of a fair price
A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.

Gender Equity
Fair Trade means that women’s work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations.

Working conditions
Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.

Child Labour
Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organised producers disclose the involvement of children in production.

The environment
Fair Trade actively encourages better environmental practices and the application of responsible methods of production.

Trade Relations
Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. Whenever possible producers are assisted with access to pre-harvest or pre-production advance payment.

APPENDIX 4

FAIRTRADE FOUNDATION’S REQUIREMENTS FOR FAIRTRADE TOWN/CHURCH/UNIVERSITY

Source: Fairtrade Foundation website, “Fairtrade Towns”: http://www.fairtrade.org.uk/get_involved_fairtrade_towns.htm.
“Fairtrade Universities”: http://www.fairtrade.org.uk/get_involved_university.htm

To become a Fairtrade Town (or any other populated area), five goals must be met:

To become a Fairtrade Church three goals must be met:

To become a Fairtrade University or college five goals must be met:

Renewal
There are additional requirements for declared Fairtrade towns, churches, and universities to renew their status.

Notes and Sources

 



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Masters Thesis for:
New School, Graduate Program in International Affairs
May 2007
Advisor: Professor Stephen Collier
Reader: Professor David Gold

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The Fair Trade Movement in Historical Perspective: Explaining the “In and Against the Market” Predicament

Introduction

Part 1: A Historical Overview of Fair Trade

Section 1.1: Goodwill Selling

Section 1.2: Solidarity Trade

Section 1.3: Mutually Beneficial Trade

Section 1.4: Development of Trading Partnerships and the Marketing of the Fair Trade Brand

Section 1.5: A Snapshot of Fair Trade’s Scale and Impact

Part 2: An Alternative History of the Fair Trade Movement

Part 3: In or Against the Market? Realism and Idealism in the Alternative/Fair Trade Movement

Conclusion and Appendices

Notes and Sources

© 2009-2012, Eric Fichtl