Monday, 25 March 2013

Fairtrade movement: asking fairness beyond the label

By Tomoko Kunimitsu
(IDS MA Globalisation and Development student)

Last month, the Fairtrade Foundation announced that UK sales in Fairtrade products (i.e. products with the FLO label) increased from 1.32 billion GBP in 2011 to 1.57 billion GBP in 2012, a 19 per cent growth in spite of the current economic climate. Fairtrade products are well known in this country and about 78 per cent of UK people recognise the label. Fairtrade products such as coffee, tea, sugar, chocolate and bananas, are ubiquitous in our daily lives. As well as exclusively Fairtrade focused companies, such as Café Direct and Divine Chocolate, household name products such as Cadbury’s Dairy Milk and Kit Kat are now being produced with Fairtrade ingredients. This is where I feel there is an important difference between the UK and Japan, where only about 25 per cent of the population knows what the word Fairtrade means. In the UK, consumers’ choices of buying Fairtrade products might be established as a way to express their opinion on what they want, what kind of world they want. This is consistent with GlobScan’s report which shows that more UK consumers (59 per cent) agreed that ‘my shopping choices can make a positive difference to farmers and workers in poor countries’ than Japanese consumers (41 per cent).

What should be the goal for expanding the market for Fairtrade products in the UK – is it achieving its maturity or does it still have a high potential to grow? In fact, although continuing to grow, the pace of the growth is generally becoming moderate. The average annual growth rate during the recent three years is 23.3 per cent while that during 2001 to 2003 was 41.1 per cent. It is difficult to evaluate the stage of development of the market for Fairtrade products at this point, but the important thing is that Fairtrade cannot be measured only by its market size. In the process of becoming popular, the Fairtrade movement has faced a number of dilemmas/problems. One example is commercialisation of ethics. Fairtrade products can be used to maintain the brand reputation as a socially responsible company. To what extent these attempts bring positive effects on producers’ lives depends on the levels of enforcement/achievement/commitment of their Fairtrade activities. Another example is oversimplification of the meaning of fairness. The invention of the Fairtrade label has enabled consumers to see relatively easily how and under what conditions the products are made. On the other hand, it can also mislead consumers into believing that Fairtrade-certified products are ‘fair’ and non-certified products are ‘unfair’.

Furthermore, Fairtrade products no longer seem to improve farmers’ lives in developing countries on a dramatic scale these days. Kimberly Elliott, a senior fellow at the Center for Global Development, reported that Fairtrade products might not meet the consumers’ expectations since ‘market prices for coffee and other commodities have been high, often higher than the fair trade minimums’. The role of Fairtrade is now shifting from directly contributing to Fairtrade-products producers’ income to making markets work better for all producers who are in a relatively weak position in market activities, by adding ethical factors to market transactions. In other words, an advocacy function of Fairtrade is becoming more critical.

The UK, as one of the ‘Fairtrade-developed countries’, might be at the crossroads to rethink their movement: from expanding the market size to improving the quality of the market. I think the role of consumers at this stage is more responsible because making markets work better means more than just choosing products with the Fairtrade label. The expansion of Fairtrade products may still have a positive meaning as a signal to show consumers’ preference for ethical products. However, what matters more is that consumers pay much attention to the fairness of production and trade before arriving at supermarkets, whether Fairtrade-certified products or not. Consumers should ask the reasonability of the price and be aware of a possibility of extreme cost cut competition. Then companies need to increase their transparency in their value chains and avoid unfair business activities in these chains. Labels cannot tell everything as they generalise and discard some of the stories behind the products in order to translate them into a standard. What is this label telling and not telling? How about other products that do not have the label? We need to keep asking these questions as consumers. This is what the original concept of Fairtrade, including labeled and not labeled, has actually suggested to the world.