Robert Minhinnick, former editor of Poetry Wales and along with his wife Margaret founder member of Friends of the Earth Cymru, blames his mum. His tongue is only partly in his cheek when he explains how the 86-year-old Porthcawl resident refuses to buy at the Fair Trade shop he and Margaret run in the town. ‘We are,’ he says, referring to most of us in the West, ‘addicted to cheap food.’
Most of those present have heard the arguments before; by and large, the Minhinnicks are preaching to the converted. What is interesting about this discussion, especially when thrown out to the audience, are the complexities involved. Tomy Mathew, who chaired the session brilliantly with a potent mixture of knowledge and good grace, was swift to point out that Fair Trade is not simply an issue between the developing world and the West. ‘It’s about time the Indian middle class – which is 300 million strong – started paying their dues. If we are spending less than ten per cent of our income on food, we need to pay a fair price to the Indian farmer.’
Those in the audience are also eloquent and informed. Many are keen to bring up the issues of farmer suicide – a particular problem in Kerala, with five such cases in the last thirty days. But even this is not straightforward, as an English ex-pat living in a rural part of the state points out; much of this issue is also linked to alcoholism. There is also the complexity of labour issues. Kerala, the first state in India to access the world’s Fair Trade markets, has, at least according to one member of the audience, the right ‘social ambience’ to make such forays a success. With its long-established cash crops – spices, ginger, coffee and the famous Malabar pepper – and strong trade unions, it would seem that conditions are as perfect as they are ever going to be. But of course it is never as simple as that. As one member of the audience points out, the fact that Kerala children are in school while the more relaxed legislation on child labour in neighbouring Tamil Nadu means that simple market forces – as ever – dictate what really happens.
This being Hay, the intricacies of the social, economic and ethical debates are inevitably brought back to the role of the artist. Robert Minhinnick in particular is keen to press his view that in times when he predicts the world’s growing inequalities will ‘blow the lid off many cultures’, writers need to make themselves explicitly political. Tomy Mathew finishes the session by making the point that the festival itself is a ‘fair cultural exchange’ and should serve as a model not just for the exchange of ideas but for righting the wrongs of commodity exchange between India and the British, which has a long history of being unfair.
At the end Minhinnick apologises to his mum. ‘She’s a nice person really,’ he says. However, the next generation will have to live very differently.
(This blog post was part of The Hay Festival, 2011)

Most people in the Fair Trade movement are aware of the difference between the Alternative Trading Organisations like Divine, Cafe Direct, Traidcraft and Liberation Nuts, and the other Fairtrade certified products e.g. supermarket own brand goods,* although having said this, increasing this awareness to the general public is a different matter! However, in the same way, there can also a big difference in the type of producer groups who are part of the Fair Trade system. Just as there are those at the retail end who do the minimum in order to get the badge and cash in on markets, you can also find the same situation at the producer end. And just as Divine’s market is threatened by Cadbury’s Fairtrade chocolate or Cafe Direct’s by Tesco own brand Fairtrade coffee, so too are Fair Trade Alliance Kerala (and others like them) threatened by those certified producer companies who can offer products at a lower price, basically because they don’t have the high costs associated with doing business in a truly different way.

Despite what the Adam Smith Institute and others think, Fair Trade is part of the market driven competitive world and all must fight to stay in it. Fair Trade retailers must convince the public to buy their product above the other Fairtrade certified goods, and Fair Trade producers must convince the Fair Trade retailers to buy theirs! The producer groups and Fair Trade Organisations who do being a ‘Fair Trade producer group’ or being a ‘Fair Trade Organisation’ the best will necessarily be more expensive and both have challenges ahead about how to fight their corner in the ethical market place. The Fairtrade label’s greatest achievement- to communicate at a glance an ethical seal of approval of a product- is also the main obstacle for those who want to say “yes we are all this but also so much more!”

There has been talk for a long time in the Fair Trade movement about how to differentiate those organisations set up with the sole aim of fair trading, to those who have the main aim of creating wealth for shareholders (at the core these are very different motivations!). And we are getting to a stage where we need to have the same conversations about the producer groups, so that Fair Trade buyers who for so long have asked the public not to fall into the trap of joining the race to the bottom, don’t make the same mistake themselves.

* I’m just using supermarket own brand products as an example but it isn’t a rule that they do only the minimum. Sainsbury’s, for example, were trailblazers in bringing the first Fairtrade certified coffee over from the war torn Democratic of Congo to market and the Co-operative have been key in growing the Fair Trade market.

I have been in Kerala for just under two weeks and have already visited many Fairtrade certified farms. Kerala is a beautiful place, it’s very green with palm trees everywhere and as you get higher into the mountains, there are tea plantations and forests. The people are incredibly welcoming, in one day we visited 4 farmers and at every stop we were greeted with Chai (automatically comes with about 5 sugars), bananas and snacks and despite knowing no one in India I’ve already been to two weddings!

The thing I was most struck by was just how small scale the farmers are that Fair Trade is working with. They ranged from owning a plot of land of under 1 acre (tiny!) to 7 hectares. The farmers  join together in a cooperative and become a member of the Fair Trade Alliance Kerala (FTAK); all farmers for FTAK are also organic.  The farms are all family farms which take on extra workers (usually neighbours) during the busy times, or as one farmer grumbled, to help with the weeding since they’ve gone organic!

The market that Fair Trade provides these farmers with is vital and the structure and support from the Fair Trade Alliance Kerala (FTAK) is also important, for example one farmer Matthew said that FTAK gave him guidance on which organic fertilizers to use and he has since been able to increase the size of his cashew nuts to meet the required size by the supermarket (the supermarkets strict and often pointless requirements mean that a huge amount of good food gets wasted- but that’s a different blog post!) They are also advised to grow mixed crops (including vegetables for their own consumption) which puts the farmer in a much more secure position as they aren’t reliant on one crop only. When I asked another farmer Pally what had changed since they’d become part of Fair Trade, he said that they now worked together and had much more bargaining power and some sort of voice on the world market through FTAK.

By working with small farmers who then organize themselves into cooperatives you are getting to the crux of the original purpose of Fair trade: to transform power relations so that small farmers are empowered to take action and create a better livelihood themselves. I think perhaps this important message has got lost in the campaign rhetoric around Fair Trade. It’s much simpler to show  a photo of a school that has been built with the Fairtrade premium but this ignores the importance of people coming together, working together, challenging conventional trade and having a voice on the world market for the first time. Unfortunately and this is perhaps one of the reasons why it’s gone slightly out of view, it’s impossible to get a photo which illustrates this!

It is an unusually hot summer in Kerala, as I write. Heat strokes, unheard of in Kerala until this year, have been reported from several places in the state. For the second year running, Fair Trade Alliance Kerala, that has between its members an estimated cashew yield of over 2000 metric tonnes, will struggle to meet its contractual obligations, indicating another year of crop loss of about half the normal. The reservoirs of our dams are turning in to parched dry beds and the Kerala State Electricity Board, dependent as it is on hydro electric power, is talking of an immediate twenty percent power cut. We are still in March, which under normal conditions should be a benign first month of the summer. Our coffee farmers in Wayanad waited with bated breath last week as a wild fire raged unabated in the adjacent forest for 2 full days. With vast tracts of one of the last havens of the Asiatic elephant reduced to ashes, we expect the hapless jumbos straying in to our farmlands with far greater frequency and wonder what direction the man animal conflict will take this season. With an inflation nearing 20 percent on the food grain prices, any yield loss in cash crops is fraught with dire implications for the food and nutritional security of several farmer families.
Kaalavastha Vyathiyanam, our farmers say. That tongue twister for the average Keralite is our common parlance for climate change. Except that it is more Sanskrit than our mother tongue Malayalam, which could actually come up with half a dozen simpler and more straightforward words to describe the phenomena. It is symptomatic of what happens when we are confronted with the unusual or the incomprehensible: we resort to the language of the priestly class and confine it to the realm of the esoteric.
While the science may be esoteric, the impact is not. It is real, felt. Though it is already here, intuitively we also understand it is something in the making; that the present foretell only inadequately the future misery. Characteristically though, the science is being dealt with in the safe havens where the impact is going to be last and least. As a natural corollary, the mitigation measures suggested too tend to have not just the smugness of those safe havens but also a perverse understanding of cause and concomitant responsibility.
That smugness has been explained in part by two unique features of the unfolding climate change crisis, namely, the unequal nature of the impact and the geographical separation of emission source from environmental consequence: “But global warming is not H.G Wells’s War of the Worlds, where invading Martians democratically annihilate humanity without class or ethnic distinction. Climate change instead will produce dramatically unequal impacts across regions and social classes, inflicting the greatest damage upon poor countries with the fewest resources for meaningful adaptation.” ¹
For all the nuanced positioning and posturing by myriad stakeholders in the climate change debate, there is little contestation about what has been emphasized by the UN Development Report of 2007-’08: global warming is above all a threat to the poor and the unborn, the two constituencies with little or no political voice. ²Similarly, there is near unanimity that the challenge of climate change can simply not be met by steps that we consider practical. No matter, what simple and practical steps those ‘feel good do good’ TV spots might advocate, the climate change deity can be propitiated to avert environmental Armageddon only if there is determination to side step the practical and do the necessary.
There is therefore no mistaking the twin nature of the challenge that climate change posits:
i) a planet in peril calls for necessary not just convenient mitigation measures. Now, convenience, in the context of our discussion, has this strange capability to couch itself in an equity garb, against which we must be particularly vigilant.
ii) yet, all that we do must necessarily address the survival exigencies of those least equipped to adapt to climate change; it must be willing to look squarely in the eye the principle of cause and concomitant responsibility.
And the temptation to invert the above order is best resisted.
But tempted if you are to draw a parallel to the above with the red – green debate of yore, it is certainly not far fetched. That debate unfortunately only led to entrenched positions and a stalemate of ideas that crippled action. The burden of this piece is to explore if Fair Trade in principle and ‘Fairtrade’ in practice has the wherewithal to break the stalemate and propel us to action. Specific to our context, can global commodity trade in a climate challenged world chart a ‘fair green’ course?
But first things first and so a reckoning of what could be the implications of committing ourselves to doing what is necessary rather than what is expedient. Let us take on the FAQs of the debate, for it is important to make this as direct, prosaic and nearer home as possible:
Can the world continue to do commodity trade across continents in the volumes it does presently and still hope to save the planet?
– No.
Even if all of it was fairtrade?
– Irrespective.
Can the planet survive if we continue to drink as much coffee, eat as much chocolate, or consume in myriad forms as much amount of sugar as we presently do?
– It cannot.
What if all that coffee, all that chocolate and all that sugar were sold fairtrade?
– Irrespective.
So, here it is in black and white. I re assert, it is a voice from the global South. And it comes from a producer hungry for more and more markets, who cannot stop complaining that Fairtrade sales are just not good enough. Above all, he loves to hear Harry Hill’s knitted character repeat a zillion times – Fairtrade works, what is the alternative? Unfair Trade!
The central issue is not transportation, as is often portrayed. Of course, the massive haulage of commodities across continents is unsustainable. Of course, the food mile advocates have a real case and are right in pressing for answers here and now. (Some of those answers have already come and what appeared to be extremely complex arithmetical jugglery labouring to justify commerce with the third world have now solidified in to incontrovertible evidence. The IIED’s ‘fair miles’ formulation³ will continue to inform the food miles debate in the future reminding every one of the crucial distinction between simple and simplistic conclusions on the environmental footprint of consumer choices. But that is beside the point.)
For in the hierarchy of problems the issue of food miles is lower down the order compared to problems of food security, dwindling forest cover and endangered bio-diversity in the producing origins. The countries of the South can ill afford to be command cultivating cash crops for distant markets as they presently do if we are to still retain our optimism about saving the planet. But do we need more or less of Fair Trade to save the planet?
It is an excellent juncture to digress from the conceptual to the empirical. And to move from the dining tables and supermarket shelves of the West, which still retain its argumentative edge in the debate to the farms and forests in the producing origins to see if another perspective emerges:
The Indian state of Kerala produces just under 20% of its requirement of rice, which is its staple diet. It did not matter, until some years ago. The state’s agriculture was encouraged to tilt heavily in favour of cash crops, for the country needed dear foreign exchange to fuel its developmental and industrialisation aspirations. We grew tea, coffee, spices, rubber, coconut, areca nut… practically everything that had takers in distant markets, but little food for our own consumption. Central Government allocations for the public distribution system, as a quid pro quo for our contribution to the Foreign exchange reserves, and imports from the neighbouring states kept us going. Until our command economy got dismantled, statutory rationing was withdrawn and the universal public distribution system in the state that ensured essentials at affordable prices to the people began struggling to keep itself afloat. The crash in prices of cash crops – we had not just the collapse of the coffee agreement but also the dismantling of the Eastern bloc to blame – was simultaneous. The perils of ignoring the food security of families and communities could not have come in to sharper focus; but as any one familiar with peasant life will tell you, there is no worse time to talk to farmers about food security concerns and the necessity of crop diversity as when the commodity price graph cruises south.
Fair Trade Alliance Kerala, a small farmer organisation comprising of 3600 farmers was set up at the peak of this crisis. The guarantee of a minimum price for cashew, coffee, vanilla and other spices has brought in a small measure of predictability to farmer’s lives. And one of the first uses the premium money found was to fund a group farming effort by the farmers to grow rice and a community kitchen to prepare noon meals for school children. Tubers, seasonal crops that significantly contribute to nutritional security of farming households, have made a significant come back. Delegates at the Global Assembly of INPC – Liberation that FTAK hosted in 2008 were surprised that the agricultural exhibition hosted on the sidelines of the event displayed neither cashew, its flagship export commodity, nor any coffee or spices, which are the other products that they commit to the Fairtrade markets. Instead, the exhibition displayed about 60 indigenous varieties of rice, preserved in precious little amounts by farmers, despite the relentless promotion of chemical fertilizer / pesticide guzzling HYV crops by the government. It displayed at least two dozen tubers, innumerable varieties of bananas, forgotten legumes and ignored wild food. If ever evidence was needed about farmers fair-trading their way in to food secure situations, here it was.
COINACAPA is a Bolivian cooperative of Brazil Nut gatherers. Indigenous communities of Bolivia, Peru and Brazil hold the rights to gather the Brazil nuts from the Amazon forests. The gatherers have formed themselves in to cooperatives but negotiating the international markets have not been easy and most of them are steeped in debt. The livelihoods of the gatherers hinge crucially on a remunerative price for Brazil nuts, and the announcement of Fair Trade minimum prices for Brazil Nuts could not have come more handy. In the absence of remunerative prices, not only will none undertake the risky and arduous task of nut collection, livelihood imperatives will override environmental concerns in people’s approach to the surrounding forests.
Close on the heels of reaching their first container of fairtrade Brazil Nuts to the UK braving rain and land slips, the cooperative along with eleven other nut producer coops from Asia, Africa and South and Central America, pioneered the formation of the International Nut Producers’ Cooperative to take controlling stakes in Liberation Foods CIC, the worlds first ethical nut company co owned by producers. The 2007 Annual General Meeting of the cooperative took place following these momentous events. The focus of the AGM how ever was not prices, not the debts the coop was struggling to repay, not the quality issues that fussy customers were always nitpicking on. ‘The Brazil Nut tree is a patrimony to humanity’, the AGM declared. It must survive and the forests surrounding it must be protected for it to survive. Community strictures evolved about the stewardship of the forests that held the Brazil Nut tree. What hoards of punitive legislation failed to do to prevent the deforestation in the Amazon region could be achieved by the fairtrade guarantee of remunerative prices and fair market access. Even more, beyond their immediate stakes in the protection of the forests, the international peasant solidarity that the fair trade supply chain engendered made the cooperative assert the human connectedness. They were protecting humanity’s patrimony, not just their livelihoods.
Further in Africa, “Fair Trade supports some of the most bio-diverse farming systems in the world. When you visit a Fair Trade coffee grower’s field, with the forest canopy overhead and the sound of migratory songbirds in the air, it feels like you’re standing in the rainforest,”
says Professor Miguel Altieri, Leading expert and author on agroecology. But for a minimum guaranteed price, each coffee crisis will see a bit of that forest canopy disappear as the agrarian crisis in Kerala’s coffee belt of Wayanad showed. The coffee crisis changed Wayanad’s landscape completely. Debt ridden farmers initially selection felled and then increasingly clear felled the shade trees. From the farms to the fringe forests was a short distance and the forest cover dwindled almost irretrievably. Compare that scenario with the ‘Jumbo nuts’ story FTAK talks about now:
The man animal conflict is nothing new in farmlands that adjoin the forests. An entire crop can be wiped out by a herd of deer, wild boar or elephants. With elephants, it could be that your lifetime’s toil can come to naught with perennial crops like coconut, jack, cashew or Mango that have been around for decades uprooted by a marauding herd in the dead of the night. Instances abound of farmers guarding their crop with lethal weapons and resultant law and order problems if they ever are forced to use them in self protection or to save their crops. Some of FTAK’s premium funds went to commission a solar fencing around farms adjoining forest land – a benign deterrent to the elephant and round the year crop protection without sleep less nights to the farmers. Jumbo nuts normally referred to the large sized Indian cashews in the market. The Fairtrade cashews from FTAK are called ‘Jumbo Nuts’ because they are elephant friendly nuts!
Continuing on the bio diversity angle: The Nilgiri biosphere is a natural biodiversity hotspot and plans are afoot for the UN to soon declare it a World heritage. The environmental sensitivity of farming operations here should therefore be a global concern. If you leave alone the cash crop estates of tea, coffee and rubber, the small holder farming in the Nilgiri biosphere was characterised by crop diversity. The homestead farming traditions in this area was the spring bed of biodiversity and the basis for food security of the households and communities. And average hectare sized farm grew on rough count at least 60 varieties of crops, leave alone the shade and wild trees that provided fodder and timber. The immodest green they sport on a rain drenched monsoon day, to the untrained eye, will resemble a veritable rain forest. Next to deforestation, the shift to mono cropping is considered the most significant factor in the environmental devastation of the Nilgiri Biosphere and we can spare research about the cause: Unstable prices and farmers force changing to crops that fetch the better return only to be bitterly disappointed by the time the new crop reaches yielding stage and the prices crash. Coffee farms gave way to cocoa to rubber. Pepper gave way to vanilla; all to no avail. Today, a fairtrade farmer in the Nilgiri biosphere who sticks to homestead farming traditions can, under an enterprising small farmer organisation enjoy the stability of prices for coffee, a dozen tropical spices, coconut, cocoa, cashew and soon for rubber. There is no greater incentive this farmer needs to preserve the fragile ecosystem of the Nilgiri biosphere, one of the world’s biodiversity hotspots.
Take the case, again, of organic farming. That the environmental standards under Fairtrade, with its list of banned chemicals and sustainability criteria should qualify as organic production is beside the point. Apologies, but examples continue to spring from nearer home but the parallels are universal. The farming crisis of the 90’s and first half of the present decade brought home the perils of chemical farming in Kerala. Spurred by grant funds, NGO programmes and government patronage, large scale conversion to organic farming took place in Kerala. The state was in fact, first off the bloc in the country to announce an organic farming policy. The world (as in First World!) is waiting for organic products – convert, certify and enjoy premium prices! Small farmers formed themselves in to collectives to fall under Internal Control Systems that enabled group certification. Certification agencies descended on to the scene and a flurry of enthusiasm, also lot of meaningless frantic action – farm diaries, input registers, irrational head count of every plant head – ensued. And then, nothing happened. No product got sold. All that enthusiasm dissolved in to thin air. After a decade of such frenzied action on the organic front, what have we left to show? There are still organic farming organisations, the steadfast still continue. But almost all of them continue in business because they have had something to do with fair trade! The viability of organic farming, the cause of sustainable agriculture is best served under Fair Trade and it is not just the super market shelves that are underscoring the point, but experience in the producing origins too.
So that is what you hear if you are ‘listening to the grasshoppers’. Fair market access enables communities to trade themselves in to sustainable farming situations and food secure positions even as it propels action towards community control over protection of natural resources. The global south hence needs more not less of Fairtrade especially in a climate challenged world. In fact, the disproportionate burden of climate change concerns that Fair Trade is asked to shoulder is a recognition of its spectacular success in effectively using the instrument of trade to address inequity and poverty compared to most other interventions. If you can do so much, you could do much more is what the food mile advocates, the slow food movement and the deep ecology activists are telling Fairtraders. They are our allies, they sure are. Contrary to popular belief, Fair Trade makes common cause with them. We how ever assert that our relationship with the planet is inextricably linked to our relationship with fellow human beings, which must be reorganised around concerns of justice and fairness.
One of the poignant moments of the Stockholm conference is believed to be the declaration by Mrs. Indira Gandhi, then Indian Prime Minister that poverty is the biggest pollutant. Except that the world wasted about four decades since the dire warnings of Stockholm, chasing the mirage of development as the grand panacea for poverty. Growth in its value neutral form and of lately in its ‘inclusive’ variant has been and is being chased with missionary zeal. Quantity of trade from the South to the North became part of the grand narrative of growth and development supported by massive governmental incentives and grant money. It made millionaires out of export license holders in the Global South, created sweatshops where thousands laboured in inhuman conditions and chemically abused vast tracts of arable land. What is intriguing is that the Stockholm conference was acutely conscious of the equity angle of trade in addressing environmental issues. Principle 10 is explicit:
“For the developing countries, stability of prices and adequate earnings for primary commodities and raw materials are essential to environmental management, since economic factors as well as ecological processes must be taken into account.”
So you could not just trade your way out of poverty. In the absence of stability of prices and adequate earnings for primary raw materials, international trade would only perpetuate poverty and accelerate environmental degradation. Enter Fair Trade, we dare say?
The logic of free trade is Siamese twin to the conventional wisdom surrounding growth and development: Maximising efficiency and comparative advantage will ensure that growth continues unabated and then the all too familiar trickle down theory comes in to effect, which is what the world’s poor should see as their stake in the system. With nearly 3 decades of mission driven praxis, Fair Trade could legitimately claim that it has effectively challenged this logic and it is the common ground we share with the environmental movement, even if we addressed it primarily from the equity and trade justice angle.
So, back to our dry FAQ postures. If the case were that global commodity trade could not grow unabated, in fact, if it might need some stringent curtailing even as things stand now, where do we begin? We must begin I suppose with those products that have minimal or negative impact on our ‘optimal nutrition’, I suppose. And we must be comfortable in acknowledging the reality that the fairtrade product basket as it stands today has quite a few such products.
But with issues of health, food miles, food security and biodiversity, all coalescing in to that coffee bean, we tend to forget history. Coffee cultivation at the producing origins is unfortunately a colonial legacy, and characteristic of commodities with such legacy, a comparatively greater measure of injustice seems to have got embedded in the DNA of its global commerce. Fair Trade understandably did not mandate itself to trade in the feel good commodities of the environmentalists to start with, or even in commodities that contributed to optimal nutrition. It chose coffee where the injustice of trade was the highest.
So, paraphrasing for fair trade’s flagship product, how do we get rid of our caffeine addiction? The global caffeine de-addiction programme for the sake of the planet! There is no mistaking that prescription. It must necessarily start with the world drinking far greater amounts of fair trade coffee than it does presently. Getting all that unfair coffee out of the way is our only hope for producing origins trading their way out of poverty, in to food security, away from mono crop and in to sustainable farming and crop diversity situations. The world cannot but be producing and drinking far less coffee in the bargain.
The challenge cannot be overemphasized: We need to find ways to ensure food security for everybody in a global population that seems destined to push past the 9 billion mark in the foreseeable future. And we need to have the planet in one piece to hold that population. If single-minded focus on growth is an untenable proposition, then our world henceforth will undoubtedly be one that is called upon to do ‘more with less’. Distributive justice and sustainability will be critical elements of the commodity exchange of the future and Fair Trade is a small glimpse of what it might look like.

¹ Mike Davis: Who will build the Ark New Left Review Jan Feb 2010 Issue no:61
² UN Development Report 2007-08
³ See www.chooseliberation.com/harry
⁴ Big ideas in development : Fair miles – recharting the food miles map IIED

(Paper presented at United Nations Expert Group Meeting on “Cooperatives in world in Crisis” 28-30 April 2009, New York)

These are reportedly not the best of times for trade and commerce, and it might not be out of place to start by sharing some good news. Amidst the economic down turn that shows just about every sales graph hurtling south, one genre of business, or better, a certain way of doing business, seems to be buckling the trend. It has posted sales growth in 2008 (as compared to 2007) by 24 per cent in Austria, 40 per cent in Denmark, 57 per cent in Finland, 22 per cent in France, 75 per cent in Sweden, 43 per cent in the UK and by 10 per cent in the US.

Yes, Fair Trade¹ flows against the economic tide. After surveying 14500 respondents in 15 countries, a recent study by Globescan, indicated the above figures and also surmised that active ethical consumers make up more than half (55 per cent) of the population in the countries surveyed. Consumers are calling for a new model in trade in which justice and equity are integral parts of the transaction, says the Fairtrade Labeling Organisation, releasing the study ahead of the World Fair Trade day on May 9th.

About 7 million people comprising of small farmers, workers and their families in the developing world seem to be the better off today due to Fairtrade compared to others several times their number, who according to the votaries of fair trade, still remain at the mercy of unfair international trade rules. The vast majority of these producers are organised in to cooperatives of small farmers.

What is fair trade?
“Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.” Along with its above definition of Fair Trade, FINE, an informal Association of the four main Fair Trade networks (Fairtrade Labelling Organizations International, International Fair Trade Association, Network of European Worldshops and European Fair Trade Association) also spells out the strategic intent of Fair Trade thus:
– deliberately to work with marginalised producers and workers in order to help them move from a position of vulnerability to security and economic self-sufficiency,
– to empower producers and workers as stakeholders in their own organisations, and
– to actively to play a wider role in the global arena to achieve greater equity in international trade.”

The Fairtrade Foundation U.K elaborates the concept further: “Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives.”

The fundamental premise of Fair Trade is obvious: global commodity commerce as it exists today is ill equipped to ensure the survival needs of the vast majority of producers of primary goods and services. By institutionalising fair terms of commodity exchange, fair trade seeks to engender conditions where producers and workers in the countries disadvantaged by global commerce are able to create for themselves sustainable livelihood options.

History
It saves effort to reproduce the commonly acknowledged history of fair trade that existed as such since the fifties: Fair Trade started as a partnership between non-profit importers, retailers in the North and small-scale producers in developing countries. Many of these producers were at the time struggling against low market prices and high dependence on intermediaries. They saw Fair Trade as an opportunity to protect their livelihoods, bypass the middlemen and directly access Northern markets. Over the years, more and more Alternative Trade Organisations (ATOs) were created in different countries, often closely linked to volunteer groups and Worldshops. These networks of ATOs and Worldshops played a vital role in the development of Fair Trade as we know it today.

In 1988, in an effort to expand the distribution of Fair Trade products to mainstream retailers, the Dutch ATO, Solidaridad, found an innovative way to increase saleswithout compromising consumer trust in Fairtrade products and in their origins. The organization created a label, called Max Havelaar, which guaranteed that the goods met certain labour and environmental standards. The label, first only applied to coffee, was named after a best-selling 19th century book about the exploitation of Javanese coffee plantation workers by Dutch colonial merchants. The concept caught on: within years, similar Labelling Initiatives such as the Fairtrade Foundation, TransFair and Rättvisemärkt, emerged across Europe and North America in an effort to follow Max Havelaar’s footsteps and boost Fairtrade sales. The organisations launched their own campaigns and certification marks and originally operated independently.

In 1997, these organizations created Fairtrade Labelling Organizations International (FLO), an umbrella organization whose mission is to set the Fairtrade standards, support, inspect, certify disadvantaged producers and harmonize the Fairtrade message across the movement. In 2002, Fairtrade Labelling Organisations launched a new international Fairtrade Certification Mark. The goals of the launch were to improve the visibility of the Mark on supermarket shelves, convey a dynamic, forward-looking image for Fairtrade, facilitate cross border trade, and simplify procedures for importers and traders. The Fairtrade system has always been about
global relationships and global standards of fairness – these were recognised for the first time with an international Fairtrade Certification Mark.

The Fairtrade Certification Mark harmonization process is still under way – as of now, all but three Labelling Initiatives have adopted the new international Certification Mark. Full transition to the new Mark should become reality as it gradually replaces the old Certification Marks at various speeds in various countries.

At present, over 20 Labelling Initiatives are members of FLO International. There are now Fairtrade Certification Marks on dozens of different products, based on FLO’s certification for coffee, tea, rice, bananas, mangoes, cocoa, cotton, sugar, honey, fruit juices, nuts, fresh fruit, quinoa, herbs and spices, wine and footballs etc.²

The how of Fair Trade: Ensuring compliance to Standards
The working dynamics of Fair Trade rests on the authentication of the supply chain consisting of producers, importers, processors, retailers and consumers as built on and functioning according to standards of fairness, transparency and accountability.

This is achieved to through the instrument of standard compliance, the standards themselves being formulated in accordance with the felt realities of producers and workers in developing countries as obtaining in different commodity production situations. In general there are two sets of generic producer standards; one for small farmers organised in to cooperatives or other collectives built on participatory and democratic structures and the other for organised workers of plantations and factories.

Fairtrade labeled goods are the outcome of a structured process that seeks to guarantee that social, economic and environmental imperatives of producing and exchanging goods within the global community in a fair and equitable manner are met. Fairtrade attempts this through a set of standards whose guiding principles have been classified as under:

1)Standards for Social development: For small farmers Fairtrade Standards require an organizational structure that allows the farmers to bring a product to the market. All members of the organization need to have access to democratic decision-making processes and as far as possible participate in the activities of the organization. The organization needs to be set up in a transparent way for its members and must not discriminate against any particular member or social group.

For hired labour situations the Fairtrade Standards require the company to bring social rights and security to its workers. Some of the core elements are: training opportunities, non discriminatory employment practises, no child labour, no forced
labour, access to collective bargaining processes and freedom of association of the workforce, condition of employment exceeding legal minimum requirements, adequate occupational safety and health conditions and sufficient facilities for the workforce to manage the Fairtrade Premium.

2) Standards for Economic development: For all products, Fairtrade Standards
require the buyers to pay a Fairtrade Minimum Price and/or a Fairtrade Premium to the producers. The Fairtrade Minimum Price allows the producer to cover the costs of sustainable production. The Fairtrade premium is money for the farmers or for the workers on a plantation to invest in improving their livelihood. Premium money in this sense is meant to improve the situation of local communities in health, education, environment, economy etc. The farmers or workers decide themselves on what are the most important priorities for them and manage the use of the Fairtrade Premium. Also, Fairtrade Standards require buyers to give a financial advance on contracts, called pre-financing, if producers ask for it. This is to help producers get access to capital and overcome what can be one of the biggest obstacles to their development.This promotes entrepreneurship and can assist the economic development of entire
rural communities.

3) Standards for Environmental development: Fairtrade Standards include
requirements for environmentally sound agricultural practices. The focus areas are: minimized and safe use of agrochemicals, proper and safe management of waste, maintenance of soil fertility and water resources and no use of genetically modified organisms. As part of the environmental standards, there is a list of prohibited materials that Fairtrade Certified producers cannot use for their production. However, Fairtrade Standards do not require organic certification as part of its standards. Higher costs for organic production are considered though, by higher Fairtrade Minimum Prices for organically grown products.

Each product/ product category has specific standards and fairtrade minimum prices and premium form the critical component of the product specific standard, in addition to spelling out standards applicable to unique production and processing issues that that each product/category, entails.

Trading standards stipulate that traders must:
• pay a price to producers that covers the costs of sustainable production and living; • pay a ‘premium’ that producers can invest in development; • make partial advance payments when requested by producers; • sign contracts that allow for long-term planning and sustainable production practices.

Activation of a Fairtrade supply chain can be said to begin with Producers who want to have their product Fair Trade certified applying to the Fairtrade Labelling Organisation. Certification per se is under the purview of FLO-CERT and is operationally independent of FLO whose overall mandate covers the promotion of Fairtrade and the facilitation of producers who want to access the fair trade market. FLOCERT’s assessment covers not just the production of their product and their workplace practices but also the structure, functioning and democratic credentials of the producer organisation based on which certification is accorded or denied. Subsequent annual audits not only confirm continued adherence to the standards, but also assesses organisations for progressive levels of compliance and improvements. Fairtrade standards distinguish between minimum requirements which producers must meet to be certified Fairtrade and progress requirements that ‘encourage producer organisations to continuously improve working conditions and product quality, to increase the environmental stability of their activities and to invest in the development of their organisations and the welfare of their producers/workers’.

Fairtrade standards are developed and reviewed by the FLO Standards Committee, a body constituted from among all stakeholders within the FLO system: FLO’s member organizations, producer organizations and traders, in addition to external experts.

The critical difference
In contrast to Codes of Conduct and other social labels, the Fairtrade Standards are not simply a set of minimum standards for socially responsible production and trade. The Fairtrade Standards go further: they guarantee a minimum price considered as fair to producers. They provide a Fairtrade Premium that the producer must invest in projects enhancing its social, economic and environmental development. They strive for mutually beneficial long term trading relationships. They set clear minimum and developmental criteria and objectives for social, economic and environmental sustainability. Fairtrade Standards need to be met by producers, their organizations and the traders who deal with Fairtrade products.³

Fair Trade – a global cooperative
The vast majority of Fair Trade goods being sold today come from cooperatives. In instances like coffee, incidentally the flagship fair trade product as on date, the product is entirely supplied by cooperatives. Until several new products in the fairtrade basket of recent history were added, Fair Trade producers were synonymous with members of cooperatives. The principles on which cooperatives are founded offered for the ethical consumer the ideal structuring of relations of production of ethically traded goods. As an economic enterprise driven by the social obligations it has to the community of its members, Fair Trade found the cooperatives to be the ideal organisational platform on to which individual small producers could converge
to achieve collective bargaining power and the economies of scale needed to access global markets. In deed as an equal exchange and partnership between producers and consumers across continents, Fair Trade could be described as a globalised cooperative enterprise!

One must hasten to add though that the term cooperative is understood here not in the legally defined form existing in several countries of the South. Democratic assertions of cooperatives in several countries are marred by state interventions and partisan political considerations. Several associations of small farmers in countries like India that are zealous about guarding their democratic character and member control from statutorily sanctioned interventions by state actors opt for organisational structures at variance with the provisions of a legally registered cooperative. It must be in recognition of this reality that the Fair Trade world, while upholding cooperative principles as the defining character of small farmer mobilisation to access fair trade markets, today refer to them as small farmer organisations (SFOs). The resemblance between the organisational standards they are meant to adhere to and the organising
principles of cooperatives, is all too obvious.

As a democratic association of producers mandated to fulfill social obligations to the community of its members cooperatives are the natural constituency of fair trade. The Fairtrade social premium is in fact recognition of the community obligations that cooperatives have or must shoulder. Hundreds of cooperatives across the developing world, whose collectivism was still no match against the reality of globalised market forces and its reflections in their local milieus have used the enabling provisions of fairtrade to help their members trade their way out of poverty. Even more, the fairtrade social premiums have helped them to address long standing social needs of their communities, which were hitherto seen as possible only as entitlements from the state. The empowerment potential of Fairtrade for cooperatives thus goes beyond the increased control that producer collectives are able to exercise over the supply chain; they could now be the true agents of participatory development for their communities. The community needs that are addressed through the utilization of the Fairtrade social premium are collectively decided upon, unlike development prescriptions emanating from quarters unaccustomed to the community’s felt needs.

The fact remains however that Fair Trade has as yet touched the lives of only a fraction of disadvantaged producers in the developing world. Against the killer waves of unequal global commerce fairtrade is still a trickle, at best a small stream. With the small size of the fairtrade market, cooperatives face access challenges and entry barriers springing from the products they have on offer, governing structures that may not readily fit in to standards and domestic legal frameworks. But most cooperatives are deterred from incurring the effort and cost of fairtrade compliance and certification due to the unsure fortunes the foray could bring them. There are more claimants obviously and legitimately than what the system is capable of accommodating. Better infrastructure, facilities for acquiring desired quality
standards, language and communication skills and even cultural compatibility with the ethos of international commerce could give a head start to some, but would be debilitating limitations for others several times their number. The biggest challenge therefore continues to be the fairtrade market size and impressive as the growth rates are, justice in trade concerns still have to increase manifold for the enabling provisions of fairtrade to reach farther and wider and in forms acclimatized to thevaried nature producer realities in the developing world.

Part II

Mainstreaming Fairtrade in origins: the case of a small farmer
organisation from Kerala, India

One central concern that is engaging those concerned with the wider gamut of trade justice issues is the less than desired impact that icebergs of fair trading situations have in the developing world. Will Fairtrade scale up to meet the ever growing challenge is one part of the concern. Equally significant is the worry whether it truly adds up to engendering humane and just conditions of existence and can readily be proposed as a genuine alternative to conventional trade. What follows is an attempt to look at fair trade not in the immediate situations of isolated producer organisations but against the wider challenges that confront organising of economic and social lives in the countries of the Southern hemisphere.

The Kerala model of development
The quality of life enjoyed by the people of Kerala has been the subject of Academic curiosity for some years now. On several key development indices, it seems to match some of the developed economies of the world. The curiosity factor stems from the fact that this has been made possible with a per capita income that is less than the Indian national average. Kerala seems to defy conventional economic wisdom that relates better quality of life with increased per capita income.

‘An enigma within a paradox’
Economic development as conventionally understood has bypassed Kerala. Industrialisation has been minimal and is more or less stagnant at the stage it was in the decade immediately following independence. Traditional industries, be it coir, cashew, or handlooms are in crisis, unable to cope with their mechanized counterparts or uneconomical considering the wage levels prevalent in the state. Un employment is high, and the state has the dubious distinction of having the highest percentage of educated unemployed in the country. Land holdings have been fragmented and cultivated land has been dwindling rapidly in the state.

Yet, the quality of life of the people of Kerala measured against some of the universally accepted parameters like life expectancy, infant mortality, maternal mortality, literacy, subsistence wages, favourable sex ratio, etc, are far better than the national average and in some instances seem to match some of the industrialised west.

Quoting the Kerala Health and Family Welfare Department: “The population of Kerala is uniformly scattered through out the state and is fairly well advanced in its demographic transition. The rapidly declining growth rate, highest mean age at marriage especially of families, a very high level of acceptance and awareness of family planning methods and fertility control, a moderate decline in the mortality rate etc are the commendable achievements in health standards which are almost comparable to that of developed countries in the world. Low birth rate and death rate along with higher female life expectancy, low infant mortality with negligible gapbetween rural and urban and lower levels of disability are the special characteristics of Kerala’s Health Status.

The Infant mortality is an index to measure the physical quality of life, in any given population. In 1995 it is 16 per thousand live births in Kerala – the lowest in the country as compared to the all India figure of 74. The continuous decline in the infant mortality rate from a high of 242 during 1911 – 1920 to as low as 16 in 1995 has contributed to the rapid increase in expectation of life at birth in Kerala. The projected figures are over 73 years of females and 68 for males during 1996-2000 and since again form an important indicator for assessing the overall health situation and quality of life in the state.

The health status of any state can be measured in terms of birth rate, death rate, infant mortality rate, expectation of life at birth etc. Kerala is far ahead of other states in the country and ranks first in attaining low birth rate, death rate, total fertility rate, infant mortality rate and in attaining high expectation of life especially of females. The literacy in Kerala is high and people are aware of their needs, conscious of their status and are generally demanding the services. They are enjoying a better healthier life than their counter parts in the country.”

Distributive justice, agrarian mobilization, rights consciousness, unionized work force, statutory food distribution, universal literacy, universal primary health coverage, etc. have been considered the foundations on which Kerala’s better quality of life edifice has been built.

Model or just a unique experience?
Development literature is keenly divided on the term ‘Kerala Model’ and a growing body of new writing forcefully argues that Kerala’s development path is just too unique to be called a model and of course not to be replicated elsewhere. With neo liberal economic thinking almost going unchallenged, until the cataclysmic events under the shadow which we are meeting today to deliberate on the role of the cooperatives, opinion seemed to converge on the Kerala model: it is unsustainable.

First and foremost, the argument goes, Kerala’s quality of life is unsustainable because it is not matched by economic activity. It defies economic logic. The social security measures Kerala has institutionalised are considered liabilities in the new economic world order. The argument stretches further to demolish just about every institutional founding on which Kerala’s quality of life rests: Organized workforce (read militant trade unionism!) is a liability and is held responsible for the flight of industries from the state. Land reforms, hailed as highly successful and unique in providing land to the tiller is blamed for having limited agrarian holdings and for making agriculture economically unviable. Homestead farming that has been observed as the backbone of food security for Kerala’s households and the spring bed of bio diversity is projected as hindering economies of scale that monoculture commercial cash crop centered agriculture provides. The massive investments the state has made in the social sector is declared unsustainable and every economic prescription from the Central government’s to multilateral agencies’ constantly remind the state that ‘there is no free lunch’.

There is unanimity in their prescription for Kerala: Dismantle the Kerala model or face economic extinction! The opinion makers, the government, the media are actively buying in to the argument. Consequently, investments have been dwindling in healthcare, education, public distribution system, labour welfare and labour protection. The crisis in the cash crop economy, consequent upon the wild speculative fluctuations in the global commodity market has bolstered the argument that international prices cannot support Kerala’s high labour costs. Vast tracts of agricultural land has been giving way to real estate with its disastrous consequences on the food security of the state. Agrarian crisis is assuming alarming proportions and desperate measures by peasants, often misunderstood to be a phenomenon restricted to the cotton belt of India, are on the increase in Kerala.

Fair Trade Alliance Kerala: an effort to protect the gains of the model
Fair Trade Alliance Kerala is the only mass based, farmer led movement in Kerala focusing solely on justice concerns in trade. It is uniquely positioned to offer the fairtrade market high value products, including a range of spices, coffee, cashew and cocoa. It is set amidst unique geographical advantage that produces some of the best quality items of cashew, spices and coffee globally. The farmlands are part of the Nilgiri Biosphere, a global environmental hotspot, where every human intervention must be carefully considered for its impact on the fragile eco system. The organisation draws its membership and movement character from mass movements of farmers in Kerala, especially movements in the forefront of the struggle against rural appropriation and peasant indebtedness.

But what makes the foray of these farmers in to Fairtrade significant is that Kerala possesses a socio economic and political climate where genuine social concerns of Fairtrade have legal sanction and, more importantly, wide social acceptance.

Fair Trade Alliance Kerala, a small farmer organisation created to access the global market on fair and equitable trading terms, intends to use these enabling conditions to try and prove that Kerala’s achievements in the social sphere need not and should not be competitive disadvantages in the new global economy. Thus while the advocates of the neo liberal world order have been telling Kerala to dismantle its social security apparatus to become competitive in a changed global economic order, Fairtrade touts these very attributes as the distinguishing characteristics (USPs in the market lingo) of the production base of the goods its commits to the justice tuned global consumer. Trade unions rights are an avoidable nuisance in the globalised market place and it creates enclaves in producing countries where hard fought and won rights of workers can be dismissed with; fairtrade insists on workers rights to organise as inalienable throughout its supply chain. From child rights to gender equity to subsistence wages, Fairtrade’s certification and inspection regimes ensure that fairness is not just a buzzword but a felt reality for farm, estate and factory workers. Investments in to health care, education and social security measures are wasteful expenditure and competitive liabilities for the liberalised economy; they are the propositions around which goods worth millions of euros, pounds and dollars are being offered on sale to the fairtrade consumers.

Fair Trade Alliance Kerala thus posits the case that the social quality of its goods and
services are not competitive disadvantages but USPs that a justice tuned globalconsumer would identify with. At the macro level Fair Trade Alliance Kerala hopes to create a ripple effect where the growing popularity of Fairtrade would make a compelling case for other regions of India and other parts of the world to proactively focus on concerns of equity and justice as imperatives for long-term survival in the global market place.

Fairtrade plus
From its humble beginnings and niche market status, the fairtrade markets in Europe and the United States have grown dramatically. From an utopian fancy to cornering substantial shelf space in the multiples, from the engagement of a handful of Alternate Trading Organisations (ATOs) to popular brands converting full product lines, Fairtrade has been hailed as the success story of the decade. But growth has brought in its wake its own problems and challenges. Some of the pioneers have felt that the number chase has been at the expense of the core values of Fairtrade. The empowerment potential of Fairtrade has been seen as a casualty and small farmers and their cooperatives that have been painstakingly nurtured by pioneer ATOs are left to cherry picking by the big businesses that have entered the scene. Criticism has also been raised that the ‘big boys’ are entering the fray to ‘fair wash’ their otherwise unpopular business practices.

While for the most part the pioneers of Fairtrade both at the level of the ATOs and the producer co-operatives in the South have responded to the challenge by reasserting the core values of Fairtrade and distinguishing themselves as 100 per cent fair traders, there have also been some unique and creative responses to the challenge. One such has been the effort to increase the say of the small farmers and cooperatives higher up the value chain. An nofficial Gold Standard in Fairtrade is thus emerging, with producer cooperatives as owners of branding companies in the North to which they commit their products. Café Direct was a pioneer in this genre of companies, with coffee farmers owning part of the company and also exercising their say in it corporate governance as Board members. Divine Chocolate and Agrofair followed and today you have Liberation Foods CIC Ltd, a hundred percent fairtrade company marketing edible nuts, 42 per cent stake in which is owned by the International Nut Producers Cooperative, a joint body of nut producing co-operatives from Asia, Africa and Latin America. Fairtrade Alliance Kerala recently hosted the Global Assembly of Liberation and the INPC in a Kerala village. Cashew Nut farmers from Mozambique, El Salvador and India who earlier saw themselves are competitors undercutting each other to lure the elusive northern customer sat across and discussed how cooperation rather than competition needs to be the grounding premise. Peanut producers from Mozambique, Malawi and Nicaragua as also Brazil Nut producers from Bolivia, Peru
and Brazil gazed at the common sky they share in the humid Kerala evenings. If in the pervading gloom of the economic crisis we are able to see a silver lining in that grassroots roundtable, we are definitely seeing the light at the end of the tunnel.

¹ The term Fair Trade is used to refer to the Fair Trade movement as a whole and can be used to describe both labelled and unlabelled goods and the work of Alternative Trade Organizations (ATOs), Fair Trade federations and networks such as IFAT, NEWS, EFTA etc. The term fair trade is a broader term often used to describe one or many of the above, but can also occasionally be used to refer to trade justice issues. In such cases, it can be as broad as to describe general fairness in trade, such as tariffs, subsidies, worker rights and other issues. The term Fairtrade is used to describe the certification and labelling system governed by FLO designed to allow consumers to identify goods produced under agreed labour and environmental standards. (Frequently Asked questions – FLO)

² FAQs (Fairtrade Labelling Organisation)

³ All standards principles as summarised by FLO