Despite the fact that farmers only earn an increase of 20% above the price of the market for their products, fair trade chocolate is sometimes hailed as the most equitable chocolate in the world. Why, in a world where the vast majority of cacao growers live in abject poverty, is this what is considered to be the best we can do?
In this essay, we go into the problems that are associated with fair trade chocolate, many alternatives to fair trade, as well as the positives of fair trade as a movement. In a twist of irony, not all labels are made equal; thus, a guide to the most common distinct Fair Trade labels that can be found across the globe can be found at the conclusion of this article.
- 1 Problems With Fair Trade Chocolate
- 2 Guide to Fair Trade Labels
- 3 Fair Trade Chocolate FAQ
Problems With Fair Trade Chocolate
Impact on Income
The fact that the minimum price paid is still determined by the ever-changing price of cocoa on the market is one of the most significant criticisms, if not the primary one, leveled against the present Fair Trade models. Even if there is a guarantee of a lower price, there is still an air of uncertainty due to the changes. The price of cocoa beans has dropped significantly over the last several decades, which implies that even fair trade cocoa may not be able to provide a reasonable income for its producers.
In addition to the minimal profit that can be made from the sale of cocoa beans, the manufacturing process requires a significant amount of work, which drives up the expenses for the producer. Cacao producers invest the same amount of time, energy, and resources into their crops every year, and often even more depending on the season. However, purchasers are ready to pay less for cacao each year simply because they can, but customers of chocolate are still paying around the same price as they did in the past.
I mean, can you image if the price of every chocolate bar, set of tires, and month’s rent was determined on the price of the market on the exact same day it was sold to you? You wouldn’t even be able to create a budget for the month, much alone one for the whole year! Customers who like chocolate don’t pay a varied amount for their go-to bars on a daily basis, therefore it doesn’t make sense for farmers to be paid in varying amounts on a daily basis.
Competing Initiatives to Fair Trade
The Fairtrade Labeling Organization International and FLOCERT, the organization that audits them, need a significant financial investment to keep running. This has two different repercussions. The first of these things has already taken place: major chocolate companies who formerly collaborated with Fairtrade are distancing themselves from the organization in order to concentrate on developing their own ‘fair’ labels. These additional labels are being used by a significant portion of the world’s Fair Trade chocolate businesses at this time.
Second, there is a group of people who support ethical commerce but consider FLO’s overall effect to be less than great. These are the participants that wish to shift away from fair trade and toward other business models that have a greater effect, such as direct trade. Both results are detrimental to the Fair Trade movement since the project depends greatly on the consumer awareness it has built up over the decades. This recognition has been built up over the course of many decades.
However, despite this expansion, the proportion of the worldwide cacao trade that is comprised of fair trade transactions is still negligible. This trade serves the mass market. A growing number of ethical trade projects that compete with fair trade also continue to nibble away at its portion of the market. They run the risk of seeing their expansion slowed down if they are unable to compete successfully against well-established, large chocolate enterprises as well as artisan chocolate manufacturers.
However, this presents quite the catch-22 situation since such a result would just serve to further illustrate how insufficient the influence of fair trade is. It would only serve to enhance the narratives that the competitor utilizes in their marketing, narratives that we will address in the next sentence.
Cost of Organizational Structure
The obligation imposed by FLO on farmers to participate in cooperatives as a prerequisite to receiving benefits from the program is often seen as a sort of gatekeeping. The obstacle of bureaucracy that is created for small farmers as a result of co-ops is another facet of the strength that cooperatives provide. This risk is reduced because to the FLOCERT compliance checklist, which requires democratic procedures and members’ active engagement in the co-operatives’ daily operations.
On the other hand, the breadth of this may make it difficult to police. There are differences in terms of influence, voice, expertise, and resources that exist even within the member farmers. Davenport and Low claim in their article from 2012 that the usage of the term producer in Fair Trade makes it difficult to identify the players behind their model’s supply chain, as well as the degree to which these actors gain from interactions.
Because of the vagueness of some terms, you run the risk of being misled into believing that all fair trade does is replace one intermediary with another. For instance, Fairtrade standards guarantee that the materials supplied in a product are Fairtrade up to the designated quantity. These standards are followed worldwide. However, certified producers do not always need to sell solely Fairtrade material in order to maintain their certification status.
FLOCERT requires that at least fifty percent of the supply be certified as fair trade, as stated in their compliance checklist. On the other hand, this suggests that some producer groups are doing business in marketplaces other those served by Fairtrade.
Effectiveness of Fair Trade Audits
Concerns have also been raised over the capacity of fair trade programs to monitor and regulate compliance with criteria and prevent the abuse of funding. This covers difficulties pertaining to the employment of children and refugees. The use of child labor has been severely restricted under the Fair Trade system. On the other hand, it is important to note that there is a difference between children working on farms for their family when they are required and youngsters who are being forced to do so.
Because of the labor-intensive nature of cocoa production and the cultural norms that accompany it, complete elimination of child labor is just not achievable. Audit agents often work directly with co-operatives and base their evaluations on the documents kept by those organizations as well as site inspections.
In other instances, the records have not been properly kept, and there is nothing that can be done about this. Concerns have also been raised about the capacity to trace transactions, which has been brought up by critics of the Fair Trade premiums and how they have been spent. Because producer groups might consist of thousands of farmers, some people question whether or not there is sufficient staff to carry out quality checks.
Quality of Fair Trade Cocoa
Concerns have also been raised about the market inefficiencies that have been brought about by labeling programs. Some people believe that since there is a set Fairtrade Minimum Price, there is little incentive for cocoa bean farmers to enhance the quality of their product. Although it is anticipated that cocoa beans of lower quality would ultimately have a difficult time competing against goods of higher quality, this has not yet taken place.
Actual Fairtrade Content of Chocolate
According to the Fairtrade definition, compound items (such as chocolate) are those that are made up of many components. If you just look at the primary Fair Trade label, you won’t be able to identify whether or not the bar is made entirely of fairly traded items. The Mass Balance technique is used by Fairtrade, and it is this approach that enables the certification of “compound goods.” Compound products are items that are not created entirely from fair trade-certified materials.
Fairtrade has amended its policy to enable firms to put a “ingredient label” on multi-component goods that are obtained with just one Fairtrade-certified ingredient. This move is part of a worldwide plan that will be implemented in 2020 to increase farmers’ access to global markets. This initiative was once known as the Fairtrade Sourcing Program and underwent further expansion. This tactic does help farmers extend their market to more customers, but it also has the potential to disguise where the finished product originated from.
Consumers who have an interest in learning the specifics of the ingredients included in their chocolate bars should be aware with the labeling rules. Before making a purchase, each of them need to consult with their own distinct organizations to learn more about the manner in which fair trade components are portrayed.
An alliance of major fair trade networks known as FINE defines fair trade as including the following elements:
“…a trading partnership that seeks more equality in international commerce and is built on discussion, transparency, and respect for one another.” It does this by providing disadvantaged producers and employees with improved working conditions and by protecting their rights, particularly in the South. This is how it contributes to the concept of sustainable development.
The mission of the fair trade movement, as articulated by FINE’s definition, is to have a significant influence on the dynamics of international commerce. In addition, the development of their presence assists to provide safeguards against a variety of types of exploitation.
In an article published in 2012, McGonnigal provides some context for the current events. There is just a marginal portion of the market that is devoted to fair trade. Only those who have the financial means to do so will be prepared to pay the premium that is associated with Fairtrade chocolate; everyone else will continue to buy chocolate that is less expensive. The majority of people are just unable to pay it, or they simply do not know any different. In the meanwhile, the movement for fair trade has a responsibility to address the future issues that will be posed by the several different certification badges.
They not only face competition from large businesses and independent private initiatives, but they also face rivalry from other individuals and organizations that are a part of the movement. Rather than focusing on how fair trade might be improved, maybe what is required is a shift in the mentality of consumers with regard to their buying. After all, a sufficient number of customers need to be willing to pay higher prices in order for small farmers to be fairly compensated.
Guide to Fair Trade Labels
The movement known as fair trade is comprised of many different networks of different projects, and each of these networks has its own labels to identify the programs that they run. Even when their goods may not live up to international standards, some manufacturers nonetheless attempt to make a profit off of these labels by promoting their wares under the terms “fair trade” or “fairly traded.”
Thankfully, the Fair World Project has published a guide to Fair Trade Labels that is 124 pages long and contains a listing of major Fair Trade labeling organizations on both the international and national level. These organizations are listed in alphabetical order, and various ratings are included with each entry. Whether you are seeking to purchase fair trade chocolates or not, I’ve included a basic introduction to fair trade labels below. At this guide, I’ve highlighted some of the most popular labels that you’ll find in your neighborhood market.
Association for Fair and Sustainable Tourism (ATES)
The Association for Fair and Sustainable Tourism is a charitable organization that centers its work on the promotion of fair trade tourism. It started out in France in 2006 with the intention of promoting tours that were run in a responsible manner, and it has since extended beyond that country. In 2014, they established the Fair Tourism Label in order to demonstrate to the general public that the aforementioned tour operators conduct their businesses in an ethical manner and that the communities in which they operate benefit from the activities that they participate in.
Biopartenaire is an effort that is a part of the Global North movement. It is one of the members of Commerce Équitable France (CEF), which is an organization in France that brings together several Fair Trade projects. The organic agricultural and fair trade economy is the primary emphasis of Biopartenaire. They depend on the Fair for Life criteria, with the inclusion of and focus placed on organic agriculture as well as long-term contracts for farmers. Alternately, they also make advantage of the FiABLE specifications.
Fair For Life
The IMO Fair for Life standards and the Ecocert Group Fair Trade standards merged together to form the Fair for Life standards certification, which is handled by Ecocert SA. This certification was created as a consequence of the merger. When it comes to other fair trade certification systems, they take a recognition approach to those that are equivalent in theory and in the control mechanisms that they implement. Additionally, they do not levy any fees for the use of their mark.
Instead, they demand members to report on the manufacturing activities that take place inside their supply chains and engage in awareness-raising initiatives on the effects that fair trade has.
The Fair Labor Organization (FLO) is the most well-known participant in the fair trade labeling program. Their emblem is an updated version of Max Havelaar’s very first commercial label, which was introduced in conjunction with Solidaridad, the Dutch government organization in charge of development. The FLO’s fair trade standards are established in line with the ISEAL Code of Good Practice and Standard establishing. Additionally, producers make up fifty percent of the stakeholders that participate in the voting process.
The FLO, in addition to the role it plays in the establishment of standards, also participates in awareness-raising efforts directed at end users. In 2014, FLO initiated the Fairtrade Sourcing Program (FSP), which was subsequently renamed the Fairtrade Sourcing Ingredients (FSI) program. This program was first implemented for cocoa, cotton, and sugar. Because of this, businesses were able to get certification for their compound goods under the FSI label even though not all of the constituent sources were considered to be fair trade.
Fair Trade USA
Today, business professionals make up the majority of FTUSA’s governing body, which is responsible for making decisions. They make an effort to incorporate representation from a number of different stakeholders, but they do not pick out any one particular group. The standards are accessible to the general public, but the specifics of the regulations governing certification, price, or labeling are not mentioned in the document. On the other hand, they assert that they abide by the ISEAL Code of Good Practice for Setting Social and Environmental Standards, the parameters of which are determined upon by a “fair balance” of various stakeholders.
The primary distinction made by FTUSA is that they do not restrict their certification to just applying to small farms. They also have a low barrier for achieving certification, which just requires 20% fair trade content in the compound items they sell. The usage of premiums is not limited to the purpose of providing benefits to the community either. They might be paid out in cash to people, used to pay for certification costs, or even invested in by the owner of medium- or large-sized farms.
Since the 1980s, Naturland has been in business, and in 2010, they introduced the Naturland Fair accreditation to their products. They are a German group that has been a leader in the movement to promote organic agriculture and advocate for organic farming since it began. They certify farmers from both the Global Sound and the Global North, and they mix organic and fair trade items under their certification for the products they sell. It is acknowledged by Naturland that there are also failing small and medium-sized farms in the Global North, with estimates indicating that over 400,000 farms are abandoned annually in the European Union.
Members may include farmers, processors, and merchants; nevertheless, only farmers have voting power in their organization’s governing body (without voting power). In order for a product to still be eligible for certification with the partner logo, it must include at least fifty percent (50%) of fair trade components that have been verified and meet the organic requirements set out by Naturland Fair. In addition to this, they conduct awareness campaigns on worldwide agricultural production as well as trade ties between actors operating in the organic space and labor force.
Small Producer’s Symbol
SPP is an abbreviation derived from the Spanish name of the organization, which is Smbolo de Pequeos Productores (SPP for short). Coordinadora Latinoamericana y del Caribe de Pequeos Productores de Comercio Justo is the name of the network of tiny fair trade producers that this organization has established across Latin America and the Caribbean (CLAC). They are members of FLO, and the empowerment of small farmers is the primary emphasis of their program.
In order to guarantee that they are dealing with the appropriate demographic of farmers, the program will even go so far as to limit the maximum amount of viable farmland that its members may own. The SPP minimum price is often set at a level that is more than the minimum prices that are announced by other fair trade brands. Under the heading that they refer to as “Global Contributions,” they invite purchasers to contribute further support for the initiatives being undertaken by producer groups.
World Fair Trade Organization
Formerly known as the International Federation for Alternative Trade (IFAT), the organization’s founding members concentrated on providing assistance to underprivileged craftsmen working in handicrafts in developing countries. It was established with the intention of providing assistance to underserved groups and maintaining traditional skill sets. The World Fair Trade Organization (WFTO) grants certification to three different kinds of organizations: those that engage in fair trade commerce and call themselves Fair Trade Organizations (FTOs), those that call themselves Fair Trade Networks (FTNs), and those that call themselves Fair Trade Support Organizations (FTSOs) (FTSOs).
They introduced their new standards in 2018, which upgraded and reinforced their system by offering more clarity, advice, improved monitoring systems, and compliance requirements for networks and support companies. This was accomplished during the year 2018.
Rainforest Alliance & UTZ
Both the Rainforest Alliance and the UTZ are examples of Sustainable Development Labels, which place a greater emphasis on environmentally responsible agricultural methods. There is a distinction between fair trade and sustainable development labels, despite the fact that the terms are often used interchangeably. They do not place the same emphasis on the same aims and commitments as fair trade in the programs that they run. Since that time, UTZ has amalgamated with the Rainforest Alliance, making the latter the only remaining organization to carry on the legacy of the former.
Fair Trade Chocolate FAQ
Products that adhere to the principles of fair trade have the logo of the organization that validated them. The Fairtrade International Label, which debuted in 1988 and has a more streamlined design created by Max Havelaar, is the internationally recognized brand that stands out the most. Different labels denote various quality standards, and Fairtrade products sometimes have extra labels to provide customers with further information. Regrettably, not all of the subtleties are reflected in the label, and it is up to the customer to determine whether or not everything included is indeed Fair Trade.
The vast majority of chocolates sold in mass markets are not as ethically sound as chocolate produced under fair trade practices. A great number of labeling firms have built systems to track their goods along the supply chain, and they continue to enhance these systems on a regular basis as a method of ensuring compliance with regulations. However, there are flaws in the fair trade paradigm, and thus, other systems have been developed to make up for its deficiencies. In a similar vein, the very fact that the Fair Trade movement exists helps raise awareness, and it continues to mainstream the concept of ethical business practices in daily life.
If a chocolate bar displays an appropriate certification label and shows the amount, this is the sole method to determine whether or not it contains Fair Trade chocolate. In the case of FLO, its certifying organization, FLOCERT, performs routine compliance and traceability checks in order to provide customers with the peace of mind that the items they purchase have in fact been fairly exchanged.
No. No “forced-child-labor” is allowed in Fair Trade businesses. There are circumstances in which youngsters may continue to assist their family with agricultural labor. They went down with officials from Fairtrade International for an interview with the International Labor Organization (ILO), where they defined what constituted inappropriate child labor in the context of the interview. Although it is against best practices for children to help out on farms, certain cultural traditions nonetheless require them to do so. Fairtrade asserts, on the other hand, that they have procedures in place to address situations in which its suppliers engage in the most egregious forms of child labor and that these situations do occur. In addition, the results of Coulibaly and Erbao in 2019 indicated that cocoa farming requires experienced and efficient employees, which are, to put it bluntly, the exact opposite of child labor.
The Rainforest Alliance is not the same thing as Fair Trade; rather, they are a Sustainable Development Label. Despite the fact that the two certification systems are quite similar to one another. Both of these things open up new market options for local farmers and artisans, allowing them to sell their wares at higher rates on foreign markets. However, their priorities and methods of operation are not the same. The primary objective of fair trade is to reorganize international commerce in a way that is beneficial to small producers, particularly those located in developing countries in the South. On the other side, Rainforest Alliance is concerned with the long-term viability of farming practices and the inclusion of goods that have been ethically obtained in the supply chain. They want to do this while also addressing the social difficulties that are fundamental to the issue of climate change.
The term “good coffee” is referred to as UTZ, or UTZ kapeh. UTZ is considered to be a Sustainable Development Label, making it comparable to the Rainforest Alliance in this regard. It was established in 2002, and it has more characteristics with the Rainforest Alliance label owing to its emphasis on environmentally responsible agricultural practices and the preservation of natural resources. They plan to use new techniques that will increase the quantity and quality of the goods produced by farms, and they will look for ways to enhance the working circumstances of the farmer communities with whom they are partnered.