Fair trade began about 50 years ago in Africa and Europe when small farmers began working with international aid organizations. The cooperation helped protect farmers against fluctuating market prices and crooked intermediaries, and guaranteed them a dependable market. Alternative trade organizations soon evolved, run mostly by volunteers, where fairly traded products were sold. For-profit companies soon followed, and fair trade became a staple in many countries.
To regulate the industry and increase consumer confidence, an international system of fair trade certification and labelling came into existence in the late 1980s. TransFair Canada is the only third-party licensing body to certify fair trade products in Canada, on behalf of Fair Trade Labelling Organizations International (FLO). FLO works in 45 countries, certifying producer organizations and the trade between them and importers. Products must adhere to FLO standars and companies must submit updates and undergo regular monitoring.
Handicrafts are certified differently, under the International Fair Trade Association (IFAT), which certifies entire companies, rather than individual products. Ten Thousand Villages is one such example. Companies certified by IFAT — of which there are only five in Canada — generally have a mission and vision that reflects fair trade in all their practices.
Some fair trade organizations have a problem with companies that are jumping on the bandwagon by offering one fair trade product while their staples aren't governed by the same practices. Stacey Toews, sales and education manager at Level Grounds Trading Co. in B.C., said consumers shouldn't only look for the fair trade label, but should ask questions about the company itself. "A company can sell a fair trade product but have no fair trade mission or heart," he said.
Toews said the problem with non-fair trade companies is that many buy their coffee through brokers — a process that disrupts the ideal fair trade relationship of farmer-retailer-consumer. Although this depersonalized method doesn't necessarily mean companies are skirting fair trade guidelines, it ignores the general principle of fair trade. "The point of fair trade is to take out the middleman making all the money and get back to the land and pay farmers fairly for their product. Some companies aren't getting their hands dirty."
According to Toews, the future of fair trade in Canada rests upon the growth in sales of other fair trade products such as sugar, tea and fruit. He said coffee — the second-most highly traded product in the world next to oil — is currently the face of fair trade because "it's sexy — it's like wine." It's also an easily-purchased commodity when brokers are used. "It's a convenient way to get your foot in the door and have your company portrayed as ethical," he said.
Ken Kim, a Presbyterian missionary in Guatemala who monitors the working conditions of farmers and farm workers, said fair trade can and does benefit farmers. "Farmers know how much they'll receive ahead of time for their products and can plan accordingly," he said.
However, there is a flip side to this coin. Kim said although the farm owner may benefit, his labourers who work in the fields may not be so lucky. "Who is this farmer?" he asked. "Is it a single owner, a co-op, a community endeavour? Unless it's a small size family plot comprising the individual farmer and his immediate family members, the fair trade farmer must hire labourers. Workers are paid for productivity, thus the more beans picked, the greater the remuneration. In Guatemala, workers during the coffee harvest are not paid the daily minimum wage applicable for agricultural workers."
Kim also said in order to be eligible for fair trade programs limited to smaller co-ops, the trend in Guatemala is for large family farmers to divide their huge plantations into smaller co-ops led by family members.
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