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Plenty of False Claims Cloud Fairy Tales about Fair Trade

Workers in Mexico sort coffee beans. Source: Joe Driscoll
Workers in Mexico sort coffee beans.
  • Why it matters

    Why it matters

    Many fair-trade products are full of conventional ingredients, because the concept of fairness means different things to different people.

  • Facts

    Facts

    • A German coffee roasting company misled its customers for years by making false claims about where and how it got its beans.
    • Up to 80 percent of products certified as fair-trade can consist of ingredients without fair-trade credentials.
    • Many Western food companies and environmental organizations tout their use and support of fair-trade practices in the Third World.
  • Audio

    Audio

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Africa is a continent of miracles, which is why many miraculous stories are told there – about coffee, for example. In one of these stories, a coffee roaster from a town near Mannheim in southwestern Germany claims that the beans it sells are harvested from “coffee plants growing wild in virgin forest.” In its advertising, the company states that it has a close “personal relationship with the coffee farmers” in the Ethiopian highlands, and that nothing matters more to the company than “fair trade.”

How touching. It’s the kind of yarn that companies use to satisfy the sensitive dispositions of German consumers, so as not to disrupt their fantasies about the idyllic lives of small farmers in the Ethiopian highlands – a place where men climb the hillsides in the morning fog, searching for individual coffee bushes in the undergrowth, and where they pick coffee, bean by bean, returning home to their villages, exhausted but happy, in the evening.

Until a few years ago, the coffee company was telling its touching tale in organic supermarkets in the southwestern city of Freiburg. Unfortunately, it was nothing but a fairy tale.

But now the reality has come to light: The company’s beans don’t actually grow on wild bushes but almost exclusively in coffee plantations. The roaster’s personal relationship with Ethiopian small farmers turned out to be nothing but a relationship with a wholesaler in Hamburg. And its claim to be selling a “fair-trade” product was nothing but a self-designed logo on the package. It was all too much of a good thing, a court in Karlsruhe concluded when it ordered the roaster to stop making these claims in its product advertising and labeling.

This confusing landscape is filled with charlatans and storytellers, as well as people who take the idea of fair trade seriously.

But this doesn’t eliminate the problem of what exactly fair means. The term is not universally defined, so that anyone can use it as he or she sees fit. For aid organizations, fairness refers primarily to the structures of small-scale farming, while economic liberals contend that the global market alone provides adequate fairness. Another problem is that up to 80 percent of products certified as fair-trade can consist of ingredients without fair-trade credentials. It would be interesting to see how people would react if the same approach were applied to energy. Customers who favor renewable sources would certainly bridle at the thought of 80 percent of their electricity coming from nuclear or coal-fired power plants.

Today’s consumers know that there is also a moral component to consumption

This confusing landscape is filled with charlatans and storytellers, as well as people who take the idea of fair trade seriously. One of them is Florian Hammerstein, whose company, Original Food, sells coffee, chocolate and tea. Mr. Hammerstein took the Mannheim coffee roaster to court. For the Freiburg entrepreneur, confusion over the term “fairness” is “extremely problematic, because at some point consumers lose all confidence in fair-trade products.”

 

Coffee beans
Coffee beans

 

The original idea behind fair trade was to harness consumption to change the world. It arose throughout Europe in the 1960s and 1970s, and it was mainly promoted by a chain called Weltladen (World Market). The concept meant that farmers growing fruit, coffee, cocoa and tea in developing countries were to receive premiums above global market prices, and that guaranteed purchase quantities would enable them to plan more efficiently. So that consumers could recognize why they were being asked to pay a little more for a pound of coffee or a bar of chocolate, marketers began printing special labels on packaging.

All kinds of colorful labels appeared before long, each with its own concept. Today it’s difficult to distinguish among various vendors, because they promise similar things. For instance, “Fair trade,” probably the best-known seal, offers “the certainty that fair-trade prices and premiums improve the living and working conditions of farmers and workers.” With its “Fair plus” brand, the GEPA chain claims to be working toward “a better life in the south.” Naturland, or the Association for Organic Agriculture, is convinced that “environmental farming only has a future if the farmers can make a living with their work.” There are also the “Fair for Life” and “Hand in Hand” labels, along with many initiatives that do not specifically mention fairness but pursue similar goals. The Rainforest Alliance, with its green frog symbol, promotes “preserving biodiversity and sustainably securing livelihoods,” while the UTZ organization aims to create “better future prospects for farmers, their families and our planet.” Companies like Nestlé and Starbucks have their own ethics initiatives.

If all of this were true, conditions in the fields and plantations of the tropics would have been paradisiacal long ago. But child labor in cocoa production in West Africa remains as widespread as the threat to virgin forest by palm oil plantations in Indonesia. And yet many raw materials are somehow certified. Obvious lies, as in the case of the German coffee roasters’ tall tales about Ethiopian small farmers, are just the tip of the iceberg. Far more relevant is a completely legal but enormous gray zone: the unfair side of fair trade.

Critics are increasingly shedding light on the dark sides. One of them is Ndonco S. Sylla, who works for the Rosa Luxembourg Foundation in Senegal. In his book, “The Fair Trade Scandal,” Sylla argues that poverty today is marketed for the benefit of the rich. In his view, the fair trade system merely protects farmers and their families “from extreme poverty,” but it also prevents them from truly improving their lot in life.

Studies by researchers at the University of London suggest why this is the case. They spent four years examining whether fair trade certification contributes to fighting poverty in Ethiopia and Uganda. They concluded that working in a recognized fair trade system made “no positive difference” for workers. According to the study, workers on small farms and cooperatives earned even less money and had poorer access to sanitary facilities and medical care than those employed on large, conventional farms. Perhaps the size of the farms makes implementing such benefits more feasible, both financially and from an organizational standpoint.

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