Fair Trade USA's Split from FLO

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Postby lilyk » Thu Feb 23, 2012 10:15 am

The Roasters Guild has no stated position on any of the below issues and has only attempted to give voice to this important change in the state of Fair Trade. We are here to provide information for our members and to let our roasting community stay informed on cutting edge issues.

With that said, there has been a significant amount of discussion in the specialty coffee industry lately around Fair Trade USA and the changes that are anticipated as a result of their resignation from Fairtrade International (FLO). We reached out to Fair Trade USA to get their position on some of the issues that have surfaced, and below are the compiled responses.

Question for discussion: After reviewing the statements below, what questions would you have for Fair Trade? Are there any aspects of this information that you would like to be clarified further?

To read the press release issued by Fair Trade USA on their resignation, click here: http://fairtradeusa.org/press-room/pres ... membership

Statement from Fair Trade USA

Innovating the Fair Trade Model

There are many voices in the FT movement, all united under a common mission to alleviate poverty through trade. Fair Trade USA believes that in order to have the most impact, FT has to work for all kinds of producers; but in its current form, FT principles are applied inconsistently. For some product categories, like coffee, FTC is limited to cooperatives, while in other categories, like bananas and tea, workers on large farms can become certified.Fair Trade USA resigned their membership from FLO in order to eliminate these inconsistencies. Beginning in coffee, they are adapting Fair Trade standards for both workers on large farms and independent small holders. Through this new model, Fair Trade USA can reach over 4 million farm workers currently excluded from FT.They already have one estate certified using draft standards for Farm Workers in Brazil – Finca Nossa Senhora Fatima. They will audit a couple more farms in Brazil and are studying opportunities for small farmers in Colombia (Narino region) over the next few months. They plan to have 10- 20 pilots over the next 2 years using the same FT pricing and premiums for co-ops. Fair Trade USA will assess results to ensure that the inclusion of new groups does not negatively impact existing co-ops.

Strengthening Farming Communities

Fair Trade USA plans to ensure co-ops remain strong and competitive, as they are truly the backbone of the Fair Trade movement. Part of this effort includes the development of new partnerships with global financial institutions, industry partners, NGOs, leading social entrepreneurs and in-country service providers.Their program ‘Co-op Link’, recognizes the unique role Fair Trade USA plays in linking organizations from all areas of the supply chain to producers. Co-op Link focuses on increasing market opportunities; improving access to capital; improving quality and productivity; and expanding the training available to co-ops. They raised $7 million in 2011.

Igniting Consumer Involvement

Launched 50 years ago in Europe, the consumer awareness about FT has grown well over 80% there. Yet in the US, where FT is younger, only 34% of consumers are aware of FT. Therefore, Fair Trade USA has an important need to spread awareness to far more conscious consumers and to show them that they have the power to create change through something as simple as a cup of coffee.

The Road Ahead

At the end of the day, these innovations will bring the benefits of FT to far more farmers and workers; enable more businesses to develop sustainable supply chains; allow more brands to offer FTC products; and give consumers a broader selection of quality FTC coffee.

Already they reduced their service fees to roasters, launched a new and updated mark that can be used globally, developed a new supply chain database to help find FTC coffees (look for more info at The SCAA Event), and are helping producers focus on quality.
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Postby rojo » Mon Feb 27, 2012 8:37 am

There has been a definite lack of fluidity with FT prices in relation to how the market has moved over the years. My understanding is that for some 15 years or so the premium on FTC coffees was the same dspite inflation and despite the relative situations of economies in producing countries. This came to mean that FTC kept farmers afloat in some places, but did not necessarily improve their situations at all. Then with the market spike in the last few years, FT was completely irrelavant in some cases. It seems a flat percentage above market across the board couldn't possibly qualify "fair" in some places as it does to others, especially considering now the even broader scale of farm sizes included in the new set up.

So, is there change in the works to address keeping fair trade a real, viable option, meaning it will in a more real time and substantial way, respond to inflation and the economies of producing countries to keep a marked standard of improvement through the premiums provided rather than what was seen by some in the past as a rather stagnant system? If so, what does this look like?
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Postby rojo » Mon Feb 27, 2012 9:02 am

I guess what I'm asking is, in relation to the direct trade models of folks over the years, has FT or why doesn't FT work towards needs-based assessments to determine premiums and such to ensure it's relevance and do the most good with it's resources, understanding that 20% above the market (or whatever percentage) may not be as fair in Papua New Guinea as it is in Brazil or Honduras? Especially since the measure is supposed to be one that seeks a standard above poverty wages which, when left to the global market, could mean 45% is needed somewhere and only 15% in others... A minimum incentive is a start and should not go away, but an additionally relative incentive is going to be much better and actually strengthen the goals of the program it seems.
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