Fair Trade USA: Why We Parted Ways with FLO

By: Paul Rice, President & CEO of Fair Trade USA

The concluding months of 2011 were marked by a period of great change and innovation in the Fair Trade movement: a time of unprecedented forward thinking and passionate debate about what it means to be Fair Trade Certified. We now find ourselves at an exciting crossroads. Fair Trade USA has boldly questioned the status quo and is moving in a new direction to significantly increase the effectiveness and reach of the Fair Trade model. At the beginning of this New Year, we couldn’t be more hopeful about what lies ahead, knowing that as a result of these innovations, we could double our impact in just three years.

At a Crossroads

Fair Trade began modestly in the 1960s with a few committed individuals who believed that access to markets could transform the lives of those struggling under the crushing hand of poverty. The idea was simple: through commerce, people in developing countries could realize the benefits that we take for granted in North America and Europe.

With this foundation, Fair Trade developed into a market-based approach to alleviating poverty in ways that are socially, economically and environmentally sustainable. Through this model, farming families are able to eat better, keep their kids in school, improve health and housing, and invest in the future of their communities.

Still, Fair Trade can and must do more. This is why Fair Trade USA is embarking on a new vision, Fair Trade for All, aimed at doubling the impact of Fair Trade by 2015 by innovating the model, strengthening farming communities and igniting consumer involvement.

Innovating the Fair Trade Model to Benefit Far More People

There are many voices in the Fair Trade movement, all united under a common mission to alleviate poverty through trade. FLO, one group in the global movement, is focused on small farmers organized into cooperatives. Fair Trade USA, another voice, believes that Fair Trade has to work for all kinds of producers to make a meaningful dent in global poverty.

In its current form, Fair Trade principles are applied inconsistently. For some product categories, like coffee, Fair Trade certification is limited to cooperatives, while in other categories, like bananas and tea, workers on large farms can become certified.

Fair Trade USA resigned our membership from FLO in order to eliminate these inconsistencies which exclude so many from the benefits of Fair Trade.   Beginning in coffee, we are adapting Fair Trade standards for both workers on large farms and independent small holders. Through this more inclusive model, Fair Trade USA can reach over 4 million farm workers who are currently excluded from the system.

We plan to implement this change slowly, with 10 – 20 pilot programs over the next two years. Fair Trade USA will assess results at the farm and sector levels, and report on system-wide sales to ensure that the inclusion of new groups does not negatively impact existing cooperatives.

Strengthening Farming Communities

As we innovate, we must ensure that cooperatives remain strong and competitive, as they are truly the backbone of the Fair Trade movement. Part of this effort includes the development of innovative new partnerships with global financial institutions, industry partners, NGOs, leading social entrepreneurs and in-country service providers.

One noteworthy program, ‘Co-op Link’, recognizes the unique role Fair Trade USA can play in linking organizations from all areas of the supply chain to maximize impact for producers. It focuses on increasing market opportunities; improving access to capital; creating programs to improve quality and productivity; and expanding the training available to cooperatives.  We have raised $5 million in 2011 alone.

Igniting Consumer Involvement

Since Fair Trade launched 50 years ago, European consumer awareness about Fair Trade has grown to well over 80 percent. Yet in the United States, where the movement is younger, only about 34 percent of consumers are aware of Fair Trade.

Therefore, part of what makes Fair Trade for All so important is the unique opportunity it offers to spread awareness around Fair Trade to far more conscious consumers around the world. By showing American consumers that every purchase matters, that they have the power to change the world through something as simple as a cup of coffee, we can help make responsible shopping the new normal.

The Road Ahead

At the end of the day, these innovations will bring the benefits of Fair Trade to far more farmers and workers; enable more businesses to develop reliable and ethical supply chains; allow more retailers to offer more Fair Trade Certified products; and give consumers a broader selection of quality Fair Trade Certified products from which to choose.

We are proud of the work Fair Trade USA and our partners have accomplished, but as 2 billion people still live on less than $2 USD a day, there is much more to be done.  As we move into a new year, Fair Trade USA has chosen to buck the status quo, take a risk, challenge the norm, and go where no organization has gone before to make Fair Trade truly fair for all.

[Image credit: Katie Barrow, Fair Trade USA]

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Paul Rice is President & CEO of Fair Trade USA, the leading third-party certifier of Fair Trade in the United States. Previously, Paul worked for 11 years as a rural development specialist in Nicaragua, where he founded the country’s first Fair Trade, organic coffee export cooperative. Paul holds a BA from Yale University and an MBA from Haas School of Business at the University of California at Berkeley . Follow Fair Trade USA on Twitter: @FairTradeUSA

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