If you’re curious about certifications, this series is for you: Over the course of several blog posts, we’re exploring some of the existing certifications that are available for specialty green coffee, including taking a look at their mission, standards, and whatever auditing or other requirements are important for you to know.
In the second post of this series, we’ll explore what “Fair Trade” means around the world, how to become Fair Trade–certified, and how this alternative marketing philosophy can benefit farmers.
Fair Trade at a Glance
Defining “Fair Trade”
Before Fair Trade was a certification, it was a movement: Throughout this piece, you’ll see the term written several different ways, including “fair trade,” with lowercase letters, which is how we refer to the general sourcing philosophy that came to be starting in the 1940s. You will also see “Fair Trade,” two words and capitalized, referring to the U.S.-based organization, standards, and initiatives. When the word “Fairtrade” (close up) is written, it implies involvement of FLO, or Fairtrade Labeling Organization International, which is generally known as Fairtrade International.
Confusing, right? Yeah, we know. That’s why this next section exists.
There are many ways to describe or define what Fair Trade/Fairtrade means, but the most common one you will likely hear is something simplified along the lines of “it means the producer is paid more money for their work or product,” and often what the speaker means is that there is a built-in price premium for simply holding some form of Fair Trade or Fairtrade certification. This is true: Goods that carry Fair Trade/Fairtrade certification do come with a price premium—but that isn’t the only function of this cert. It is also a mark that carries implication regarding fair labor use (no child or bonded labor, for example), environmentally sound practices, and—historically perhaps the most significant aim—the desire to empower smallholder farmers by encouraging them to band together in order to gain more market access and leverage. (More on this last point in just a moment.)
Why is this premium price important? Good question, thanks for asking!
In the 1940s, as a response to the cycles of exploitation and abuse that arose from increasingly globalized capitalism, many religious, charitable, and/or non-governmental organizations began seeking to develop more equitable supply chains between consumers and producers—specifically producers in the Global South, or countries that had been negatively economically affected by colonialism. Business models like Ten Thousand Villages grew out of this early push, selling art, crafts, textiles, and other handmade items in order to solicit donations that would be used to strengthen those supply chains at their country of origin.
Throughout the 1960s and specifically in Europe, politicized pushback against the continued exploitation of labor through international trade gave rise to a “Trade not Aid” philosophy that saw the emergence of alternative trade initiatives (so-called “fair trade”) designed to bypass complicated chains of custody by connecting buyers and sellers more directly through business networks, shops, catalogs, and other highly specialized means. Alternative trade organizations like Oxfam came into being at this time.
Then, in the late 1980s, consumer demand for credibility and traceability led to the transformation of the fair trade concept into something more standardized, recognizable, and easily distributable across multiple (rather than specialized)channels. The first official alternative trading certification, called Max Havelaar, was established in Holland in 1988 and named for a 19th-century Dutch novel about the horrors of the Indonesian coffee trade under Dutch colonial control. This was the first certification that allowed certified products and to be sold in mainstream shops, as opposed to being limited to fair-trade-only marketplaces.
The rest of Europe and the United States took inspiration from Max Havelaar, and the 1990s saw several new international initiatives to solidify and legitimize the fair trade philosophy. Fairtrade Labeling Organizations International (FLO International) came into being in 1997, creating an amalgamation of like-minded certification organizations around the world and attempting to standardize them along the lines of their policies and procedures.
Fairtrade International (FLO) is the longest-standing standard-setting body, and its certification arm (FLO-CERT) is the oldest entity of its type. In 2012, the United States’ standard-setting body, Fair Trade USA, split off from FLO in order to create and support its own set of certification requirements and prerequisites.
The primary ideological difference between Fair Trade USA and Fairtrade International is that FLO certification is only available to smallholder producers who belong to democratically run associations or cooperatives, while FTUSA recognizes cooperatives as well as individual and large-scale producers. (Fair Trade USA defines “small-scale” as those farms that have 0–5 permanent workers and less than 25 total workers; large-scale operations have more than 25 permanent workers or more than 100 total workers.)
This last point is relatively key to understanding the evolution of the movement and philosophy behind fair trade: Perhaps the pivotal tenet of Fairtrade International was the initiative to encourage smallholder farmers to simulate an economy of scale by banding together into associations and cooperatives with democratic leadership. This aspect of the movement was intended to provide them with greater access to a competitive marketplace, create pathways for producers to share and pool resources, and to provide greater transparency and traceability to producers who have historically had their products sold anonymously and for little (if any) profit back to their pockets. To this day, FLO certifies only smallholder farmers who are affiliated with democratically operated grower groups, as the benefits to the collective action and advocacy has always been the primary goal.
Fair Trade USA, on the other hand, asserts that individual and even large-scale plantation operations should be eligible for certification, which makes FTUSA’s primary focus more about the other standards (agrochemical abatement, labor protections, etc), as well as the premium associated with the certification, and the guaranteed security that comes with the floor price.
Producers who are interested in becoming certified will need to apply and be audited, which means first needing to comply with the requirements of FLO-CERT, FTUSA, or other overseeing entity. The process might take several months or longer depending on how much current operations need to change in order to be compliant.
Certification costs will also vary based on the complexity of the process: For example, organizations will likely need to make investments in their operations both on the group level and the individual farm level in order to achieve certification compliance, which will add expenses above and beyond the cost of the application and auditing. Auditing costs will also vary based on the number of producers and contracted labor, and more.
The initial and annual fees to the certifying organization are paid per unit, such as 3c/lb.
Sellers (such as Cafe Imports) also need to be registered with the Fair Trade/Fairtrade certifying bodies in order to prove our own compliance (e.g. that we are paying the proper premiums and using the seals and logos appropriately). Roasters who want to sell items that are labeled as Fair Trade/Fairtrade will need to do the same and can do so by filling out an application with their preferred entity.
Is Fair Trade Coffee Better?
As with any other certification, model, philosophy, and practice in specialty coffee, there is no cut-and-dry answer to this question: We encourage our customers to take some of the significant pros and cons of this certification into consideration before coming to a conclusion.
There are certainly benefits to Fair Trade/Fairtrade certification, including:
Of course, there are the drawbacks as well:
What about Direct Trade?
While they sound somewhat similar, direct trade (you’ll notice the lowercase letters) is not a certification, but rather a broad and unstandardized range of sourcing strategies and philosophies. It’s a great question, though, and one that warrants further investigation: We’ll dedicate a later post in this series to direct trade, so stay tuned!
Can I Sell Fair Trade–Certified Coffee?
Absolutely! You are welcome to buy any Fair Trade– or Fairtrade-certified green coffee from our offerings list in order to roast and re-sell it. In order to use the corresponding certification marks, however, there are a few guidelines.
Fairtrade International requires any business using their certification marks to sign a licensing contract: The Fairtrade guidelines for sellers is located on its website here. Fair Trade USA also requires its business partners to register as re-sellers: The process also starts with an online form.
Cafe Imports and our sister small-bag company, La Bodega, are both certified buyers and re-sellers of Fairtrade (FLO)- and Fair Trade USA–certified coffees. If you purchase certified coffees from us via either of these outlets, you are welcome to use certain language to describe the coffees’ production and trade history, but you will only be permitted to use the official certification logos if your own company is registered with the corresponding entity.
Still have questions? We’re always happy to talk about Fairtrade/Fair Trade certification and compliance! Feel free to reach out to your sales representative or e-mail firstname.lastname@example.org for more information.