Fair Trade future
When we have a look at the Fair Trade future we can be quite optimistic (well, I am always an optimistic
). Trying to be
a bit more specific, I can see two major trends currently: growth and diversification,
but also some sources of tension.
growth
Fair Trade business volume growth is, by any standard, amazing. It has lied between 20% and 30% annually from 2001 to 2006; an increase which has brought the attention of some large companies... which are not welcome by everybody (more on this later).
Regarding NGOs, who are the main actors, the total number of FLO registered organizations worldwide increased again in 2007, with 1.5 million workers benefiting in 58 countries by the end of the year. This points to a Fair Trade future with ever more products available to concerned consumers.
Total business volume in 2007 reached 2.3 billion euros across the whole solar system
, 47% more than the year before!
However this impresive rise, only about 20% of Fair Trade
producers'
output is sold through this channel. The rest of their
produce goes to ordinary markets, with no product differentiation and no floor price for them. This means that there is
plenty of room (I should even say plenty of need) to enlarge the market.
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| is VISA fair?. Photo by J. Wickerham |
We may also point to an interesting trend: the rise of South-South Fair Trade. Experiences in Mexico and Brazil show that the upper and middle classes in those countries are willing to pay a little more for any item that tries to put an end to poverty for people on their own countries. This is a further step towards economic sovereignty, as dependency on exports diminishes.
You can find some Fair Trade facts here. All these data have been drawn from available reports; you may find lots more of information in them, if you are really interested in predicting Fair Trade future...
diversification
Apart from business volume, which could promise a nice Fair Trade future, we can see both product and point of sale diversification.
It all started with handicrafts and later on coffee was included in Alternative Commerce; now, ever more products have standards for FLO certification and some others are traded by certified NGOs, without a differentiating product label. Nowadays you can find from fresh flowers to sports balls, from furniture to clothes and jewelry.
A second type of diversification, that regarding points of sale, is also on the rise.
In the early days, Fair Trade items were only sold at World Shops, tended by volunteers; later on, some other kinds of stores joined the club.
In 2006, Sainsbury's (a major retailer in the UK) announced selling only Fair Trade certified bananas. Marks & Spencer (also in the UK) did the same for tea and coffee. Some more similar cases have been reported. I have collected some Fair Trade shopping hints, just in case you are interested, taking this into account.
On the other hand, this point of sale diversification has its detractors: should we allow large corporations buy a minimum of Fairtrade items and boast them just to "fair-wash" their reputation? Are mainstream retailers really worried about the poor?
Well, my personal view about it: if those who blasted prices and economies in developing countries cease to do so, a battle is won. However, in the future we may discuss what kind of fairly traded goods deserves to bear what certification... or wheter some other certifications, more precise, should be developed. I try to ask and answer here questions like that.
risks for Fair Trade future
I guess I have already anticipated the main one: division inside the Fair Trade community. One of the disagreements comes over the transnational corporations: should they take part on Fair Trade?. This issue came up first with plantations certification, but it was particularly high when Fair Trade certified bananas started to come to the U.S.A. Bananas are a perishable product which needs a timely delivery from pickers to ripeners to retailers, and not many small companies were capable of doing that.
Fair Trade "purists" were upset when they heard that large banana corporations, still smelling to neo-colonialism, could have a share in this alternative movement and even profit from it.
May be that Fair Trade has some inherent tension built into it:
- shall we stick more to its "fairness" side, even at the expense of not helping as many producers as we can? or
- should we allow "trade" to expand, even letting "not 100%-ethical players" in?
The debate is still open, and it will be open for some time; some voices are talking about a "Fair Trade plus" label for the future, while some other ATOs are developing some "small farmer" labels.
Certainly, there have been cases where mainstream supermarkets have started to sell certified fresh fruit but have shifted to producers all the market stiffness in which they operate: "just-in-time" order and delivery, no long-term commitment... In fact, large retailers can sell FLO labelled items without abiding by FLO rules, as they do not need to be FLO licensees; this allows them to put several Fair Trade producers to compete among themselves just for a lower price. Other non-expected situations also need a clarification.
The final chapter of the book "Fair Trade - the challenges of transforming globalization", by Laura T. Raynolds, poses an accurate analysis of these tensions. I most recommend reading it.
The best future I can imagine for Fair Trade: when we no longer need to differentiate it, because all trade on Earth is Fair.
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