An alternative economic model
Last Updated April 23, 2007
Canadians consume more than 40 million cups of coffee a day. (CBC)
Globalization. Its supporters say it's opening up world markets to producers from Montreal to Maputo. Its detractors claim globalization does little more than allow producers to acquire their goods from developing countries by exploiting desperately poor people.
But there's a growing movement dedicated to making sure that producers in developing countries are paid a fair price for the goods we consume.
Called fair trade, it's a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been disadvantaged or marginalized by the traditional economic model.
Take coffee, for instance. Canadians consume more than 40 million cups of the stuff a day – an average of about 2.6 cups daily for each coffee drinker. According to figures from the Canadian Coffee Association, 63 per cent of adult Canadians drink coffee on a daily basis.
No, not all of it is bought at retail coffee or doughnut chains. Almost two-thirds of the coffee Canadians drink is consumed at home. That means most of us buy it regularly at places like supermarkets or specialty coffee chains.
The vast majority of the coffee we buy comes from producers who are paid about 54 cents for a pound of beans – or about 11 cents for every dollar spent by the coffee-consuming public.
Under fair trade arrangements, less money goes to "middlemen" and more goes to the coffee grower. They receive about 28 cents for every dollar spent by the coffee-consuming public.
The appetite for fair trade coffee has grown to the extent that several major supermarket chains and specialty coffee shops now carry the product. In 1998, more than 21,500 kilograms of fair trade coffee was sold in Canada. By 2004, Canadians bought more than 940,000 kilograms of the product. Over the same period, sales had jumped to $28.2 million from about $649,000.
Globally, fair trade sales have soared during the past decade. In Europe, sales of fair trade products hit about $950 million in 2005 — up 154 per cent in five years or a rate of growth of about 20 per cent a year.
On April 17, 2007, Wolfville, N.S., became Canada's first fair trade town.
Wolfville Mayor Bob Stead said when the town council was discussing the proposal of becoming a fair trade town, local producers were suffering with the closure of poultry and pork processing plants. He noted that if the town planned on committing itself to supporting farmers in developing countries, they should also back farmers in their own town.
"We'll emphasize [fair trade's principles] locally as it applies to 'buy local' and try to support our local farmers who are sometimes in some jeopardy in terms of market survivability," Stead said.
Garstang in the U.K. became the world's first fair trade town in 2000. Since then, hundreds of towns across Europe have been certified by Transfair, the agency that monitors fair trade goods in Canada.
What are the origins of fair trade?
The fair trade movement has its roots in the United States in the mid-1940s. A group known as Self Help Crafts began buying needlework from artisans in Puerto Rico. By 1958, Self Help Crafts – which would later become the North American chain Ten Thousand Villages – opened its first "fair trade" shop.
In Europe, Oxfam UK began selling crafts made by Chinese refugees in the 1950s. In 1964, Oxfam UK started the first fair trade organization. Three years later, Fair Trade Organisatie was established in The Netherlands. Around the same time, groups in developing countries that had been Dutch colonies began to sell cane sugar that included the message "By buying cane sugar you give people in poor countries a place in the sun of prosperity."
In 1973, Fair Trade Organisatie imported the first "fairly traded" coffee from a farmers' co-operative in Guatemala. That was later expanded to include food products like tea and cocoa.
What are the benefits of buying fair trade products?
Under fair trade arrangements, less money goes to "middlemen" and more goes to the producer, usually an independent farmer, member of a small co-operative or an artisan. You know that more of your money is helping to improve the incomes of regular people.
Isn't that just helping a small number of producers in developing countries?
Yes – and no. Under fair trade agreements, there are mechanisms in place that divert some of the money earmarked for producers to the wider community. So some of the money goes to building schools and improving infrastructure – and not just enriching a small number of producers.
Are fair trade products more expensive than conventionally produced products?
They can be. But you are buying a premium product. If it's a piece of clothing, you will know that it was handmade and not stitched in a sweatshop. In the case of coffee or tea, you can be assured that it was not grown and processed on a factory farm.
How do I know if a product I buy is a fair trade product?
Read the label. If it says "Fair Trade Certified," the product has met standards set by Fairtrade Labelling Organizations International. FLO, which was set up in 1997, guarantees that products sold with a Fairtrade label conform to Fairtrade standards and contribute to the development of disadvantaged producers and workers.
In Canada, TransFair independently audits and certifies fair trade goods. But not everything that carries some form of fair trade label has received official certification. In 2006, more than 450 tonnes of coffee sold in Canada with fair trade labels were not officially certified. That has fair trade advocates calling for tougher rules.
Jeff Moore, who founded the country's first fair-trade coffee co-operative, Just Us in Grand Pré, N.S., wants Industry Canada to protect the term. He says that the federal government should regulate certification. Federal regulations would mean that companies wanting to use a fair trade label would be subject to mandatory rules or face fines.
What are the key elements of fair trade?
- The producer is paid a fair price which covers not only the costs of production but enables production which is socially just and environmentally sound.
- Helps develop a producer's ability to remain independent.
- Helps provide a safe and healthy working environment for producers. Children are not to be exploited as cheap labourers.
- Women's work is properly valued and rewarded.
- Encourages better environmental practices and responsible methods of production.
What other fair trade products are available?
The list is growing beyond coffee, tea, cocoa, clothing and crafts. In April, Florimex, a B.C.-based company began importing fair trade certified roses from Kenya. The company is the first in North America to import fair trade cut flowers. Most cut flowers are imported from Latin America and East Africa, where they are grown in huge greenhouses. The workers – mainly women – are exposed to a range of chemicals that keep the flowers looking fresh.
- Fairtrade Labelling Organizations International
- TransFair Canada
- The International Fair Trade Association
- World Fair Trade Day
- Transfair Canada
- The Fairtrade Foundation
- Oxfam: Make Trade Fair
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