Fair Trade /Direct Trade Certifications: Pros, Cons, and Unknowns

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Much has changed in terms of what we should choose to eat.. just when you thought the toughest decision of your day was between white or whole wheat toast with your breakfast, an entire world of certifications and exotic foods emerged. If you are wondering what a certification is exactly, please see my Food Certifications | Overview page for some more information.

One certification symbol that has boomed recently is Fair Trade. In a nut shell, this certification is meant to display to the consumer/buyer that the item has been acquired fairly – more specifically, that the producer/farmer has received a decent wage, and decent working conditions. But the idea of a ‘decent’ leaves a lot of room for debate.

Another major change within the world of Fair Trade certification is the splitting of Fair Trade International (FLO) into subsidiary national groups of Fair Trade Canada and Fair Trade (US). If you are not confused yet – this change in name has also been paired with new logo.

This is the ‘old’ Fair Trade International logo

 

 

The new Fair Trade symbol (as used on products originating from the US)

 

 

The new Fair Trade Canada symbol – used to signify that Canadian products bearing a Fair Trade symbols meet international fairtrade ‘standards’. So here I will go into more detail about what Fair Trade Canada’s standards are exactly as I found this website a bit dense for people wanting to be well-informed without committing themselves to hours of reading. For the adventurous, Fair Trade Canada’s website can be found by clicking here :

THE PROS:   I’ve pulled this section directly from the Fair Trade Canada webpage, because these ideas do sound good – but how can we measure or guarantee these ‘standards’?

  • Fair and stable price to farmers for their products
  • Extra income for farmers and plantation workers to improve their lives
  • Greater respect for the environment
  • A closer link between consumers and producers
  • A stronger position for small farmers in world markets

These do sound great right? My beef is.. what constitutes a “fair and stable price” is unclear.. please read on..

THE CONS: 

Markets of any type which sell commodities (a commodity being anything that can be bought and sold — oven mitts to hair extensions fall here, so does food!) is ‘regulated’ by supply and demand.

More supply + less demand = low price; Less supply +more demand = high prices…

soo.. as Fairtrade coffee for example, becomes more popular – demand increases. As demand increases, supply must also increase to meet demands. To meet demands more farmers will produce or work on farms that produce Fairtrade certified coffee beans. If all farmers quickly make this switch, the market can become ‘flooded’ = much much more supply than demand. This can cause prices to drop quickly.

So now.. the fairly traded coffee that we feel good about buying because a hard-working farmer should be making a decent wage, is now dealing with low product prices…. this is how much of the capitalist market works in a simplified nutshell.

Who is this person that ‘regulates’ this market you ask? This is another complex issue, which is constantly evolving. Some claim globalisation is to blame, some say the consumer. Please see my post on Market Regulation for more info!

 

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