Not Just Nickel and Diming: The Social Premium Makes Fair Trade Different

03/21/2007 - 10:16 PM
The Fairtrade Labelling Organizations (FLO) announced this week that the Fairtrade social premium on coffee will increase from 5 cents per pound to 10 cents per pound for Fair Trade coffee in a few months. The premium, paid by coffee buyers in addition to the coffee price, is a key and unique feature of the Fair Trade system. Most people only think of Fair Trade in terms of floor prices, which are intended to cover cost of production and act as a safety net for small farmers. Beyond this, however, the fundamental mission and purpose of Fair Trade is to change lives in the global south, and the Fair Trade social premium is a key weapon in this fight.

There are many ways to fight rural poverty in the third world, and efforts to do so should be admired. But few of the models give farmers and farmworkers the chance to decide for themselves where to focus the way Fair Trade does. Other sustainability initiatives, for example, tend to focus on working with large landowners, incentivizing or encouraging them to change agricultural practices to help the planet, and/or to focus on minimum wages and improved working conditions. While these are important goals shared and supported by the Fair Trade system, simple compliance with local law and ILO standards tends to support the status quo over upward mobility or structural change. In many cases this process inadvertently codifies local production country wage standards and working conditions over the standards that exist in the first world.

Even in cases considered to be 'models' for positive worker and environmental conditions, it is hard not to be ambivalent. I have had the opportunity to visit estates in Central America which strive to go well beyond the minimum, have the generous support of US coffee partners, and where management works hard to improve conditions for workers. Projects such as new communal kitchen facilities, sports fields, and schools make life better for workers and should be celebrated. But the workers typically have little final say in what and how these facilities are planned. Additionally, these projects often focus only on the present rather than the future, when what my colleagues and I have heard time and time again is that the hope for a better future is what drives many of our constituents. Some Fair Trade communities -- lacking universal basic services -- would rather use their funds to send a farmer's daughter to college, or perhaps invest in longer term solutions to raising their independent living standards though livestock acquisition or production changes.

As the FLO website points out, part of Fair Trade's strategic intent is to work with marginalized producers and workers in order to help them move from a position of vulnerability to security and economic self-sufficiency, and to empower producers and workers as stakeholders in their own organizations. Health clinic expansion or scholarships? A new bridge or a local store? The Fair Trade model gives producers the chance to decide how to invest in their future...and now Fair Trade coffee farmers such as those in Tanzania will have twice as much to invest!

This democratic self determination, whether smallholder-driven in coffee, or via worker councils among tea pickers, is a key part of the social component of sustainability, and what makes Fair Trade different. We are not forcing or legislating this on anyone. Many consumers share this philosophy, and support it via a simple purchase decision of Fair Trade. I should add that the concept is distinctly American...the Boston tea party, after all, was about representation.
03/21/2007 - 10:16 PM
03/21/2007 - 10:16 PM