The Citizen-Consumer Dilemma, Part Two: Reforming the System

Equal Exchange
March 21, 2017
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Background

In Part One, we described key problems we need to address, challenge and solve if we want to create a just food system: (1) private ownership and control, (2) corporate consolidation where fewer and fewer oligopolies have greater power, (3) companies and their deceptive brands, and (4) brands appealing to the citizen brain simply to elicit consumer reaction. 

Not only are these problems for our food system, but they also apply much more broadly to our society as a whole. These are deep-rooted, systemic and touch systems like healthcare, education and housing. Just acknowledging these problems, let alone addressing them, is a challenge.

Fortunately, there have been movements and models that have attempted to address, challenge and change these problems and create food justice, solidarity, and authentic citizen-consumer actions. Over the next two posts we will examine and analyze four different reforms spawned by these movements and explore what they accomplished and failed to accomplish. From this learning we believe we can be more effective in all of our food justice work and, ultimately, lay the framework for what we need to do as the Equal Exchange Action Forum.

Reform #1: Fair Trade

By Rink Dickinson, President 

Equal Exchange is grounded in authentic Fair Trade. That is why we are here. Our goal from the beginning has been to use market mechanisms to connect U.S. consumers to small farmers in countries like Nicaragua, Peru, or Sri Lanka. We worked very hard to put our mission at the core of what we do, in part based on our learning from the founders’ previous experience at food co-ops. We have tried to make sure every worker-owner at Equal Exchange understands what the organization is here to do.

In the first few years of Equal Exchange there was a lot of energy around Central American solidarity and we were, in many ways, a vehicle of that beautiful movement. That was both good and bad. We were deeply committed to supporting peace and human rights in Central America, but we knew that was not our core reason for being. If you find an early bag of Café Nica, our first coffee, you will see the product name is probably 10 times larger than the Equal Exchange logo. We received checks in the mail made out to Café Nica. Equal Exchange and "Fair Trade" were barely known.

The next 10 years felt like we were out in the woods almost by ourselves. We got to interact and learn from a few Fair Traders like SERRV and Ten Thousand Villages and Pueblo to People. We worked with food co-ops who gave us sales and support. And we tried to tell people about this thing called Fair Trade which was getting kind of big in Europe but was not yet known in the U.S.

As the network grew, primarily in Latin America and Europe, we had the privileged position of learning from its experiences and having space and time until the globalizing system made it to the U.S. From the beginning of the certification stage of Fair Trade development, there was an open experiment in mainstreaming the gains of the Fair Trade producer and consumer network. Alternative trade organizations were in some ways like food co-ops. They were organizations that existed to change trade relations. They had a sales and distribution component and an educational component. In the U.S. examples of this are SERRV, Ten Thousand Villages, Peace Coffee, and Equal Exchange. The European groups included Equal Exchange (U.K.), Traidcraft (U.K.), Ethiquable (FR), CTM (Italy), GEPA (Germany) and many more.

Beginning in Holland with the Max Havelaar program, these groups commercialized their Fair Trade programs through third party certification to dramatically increase the market for small-scale coffee farmers. The terms for a small, medium, or eventually large-sized coffee company to sell Fair Trade coffee were high bar. Farmers needed to be small farmers organized in co-ops, there had to be a minimum price, pre-harvest credit needed to be offered, and there needed to be a long-term commitment to the farmers. Even at that high bar, the alternative traders knew they were playing with fire. How could smaller, non-profit(ish), high-risk importers selling to funky world shops compete with commercial entities? Even if the increased volume was there for farmers was this some type of handing over of market leverage that would ultimately fail? Was it a friendly or unfriendly monster that was being created?

Equal Exchange had the great fortune to watch the hot house of the European Fair Trade market grow, develop, and mal-develop through the experiment with certification. Many of the dynamics and contradictions that we forecasted, in fact, came into play. In country after country, Fair Trade sales grew. When this process first came to Canada and then the U.S. (in around 2000) a benefit was Fair Trade came out of the woods and became a somewhat known concept.

Tens of thousands, and ultimately millions, of Northern consumers learned that their actions and their purchases could benefit peasant power, democracy, and the building of real social and economic alternatives in coffee-growing country. This connection of a concept, an act (consuming or campaigning), to a high-bar solidarity standard was a true reform for the forces of food justice for peasant farmers from the Global South.

With the addition of certification to the alternative trade platform came the core question of who owned or controlled Fair Trade. Max Havelaar, and later Transfair and their child FLO, had been born an ambiguous creature. Equal Exchange co-founder Jonathan Rosenthal watched an intense playing out of this in 1997 at the FLO meeting in Germany. At that time the producers (who were all peasant co-ops) learned for the first time that although they and their ATO allies had a major voice, the ultimate control was with the national bureaucracies in each Northern country. That was early on, when the major product was coffee, and coffee bought on authentic terms with the Fair Trade platform was already under the control of hopefully progressive European Fair Trade bureaucrats.

From Jonathan’s notes at that time:
The big issue, from my perspective, was the power dynamics. Producers assumed (some knew better but played the game) that the General Assembly had the authority to make decisions. When they were finally told that, no, they only were advisors to the [certification] seals, they were pissed and surprised (or feigned surprise, for some). The white folks swore they would only act in the best interests of the producers. But the ugly clash between revolutionary solidarity and the realities of the marketplace were front and center. I, perhaps the only one, was very glad to see this finally come to the surface. It has been another of those “Am I crazy?” And I thought the Europeans were in a post-colonial reality...some things die hard.

Those Northern national initiatives were non-profits with boards, either loosely, or more effectively, tied to the movement side of alternative or Fair Trade. The boards hired staff. In addition, there was a whole monitoring/enforcement side. All centered in the North. Massive amounts of corporate sales and bureaucratic growth led to the North accumulating greater power, power that was in theory at the service of “fairness” and Southern producers.

The struggle was long and continuous. The tea plantation model had been let into the Fair Trade system early on, and opened the door to plantations in all kinds of other products. The supermarkets quickly gained power and became the driver not for, but against, small farmers, because they were just acting as they always had. No one was in full control as jobs were created, all kinds of products were added, and Northern inspectors and well intentioned folks built an infrastructure. Meanwhile there was competition between producers within products, between producers of different products, between national initiatives of different countries, and between commercial interests in different countries. Who did own Fair Trade?

What became clear to us at Equal Exchange and to other alternative traders is that neither we, nor our farmer partners, owned or controlled the Fair Trade Frankenstein. It had lost its way and we had probably helped it lose its way. Different producers—generally the core Latin American coffee co-ops—fought longer. Some are still fighting. Different alternative traders were more or less public in their fight against the theft of Fair Trade. Equal Exchange was generally among the more vocal and critical Northern ATOs in this process. In retrospect, we still moved too slow and were too unwilling to name the selling out of Fair Trade.

We have reached a place today where Fair Trade has been fully digested as a reform. It no longer challenges the food system, but is used by large and multinational companies and the brands they control to answer questions of food justice from activists, or to market to consumers who do care (although on most of the products the standards are very weak). It is no longer a positive force for democracy, peasant power, or citizen solidarity. Peasant farmers and their Northern allies have lost control of a powerful reform tool that they almost had control over. There is still much to learn and digest from the theft of/handing over of Fair Trade.

The Fair Trade reform, like other food justice reforms, has many lessons for us. By understanding both what succeeded and what failed in this reform we will be better able to apply this learning to other efforts to build reforms that have the potential to continue to work over time. This learning will directly affect the citizen-consumer work we are now embarked on through the Equal Exchange Action Forum. With that in mind, here is our assessment of the accomplishments and failures of the Fair Trade reform.

THE ACCOMPLISHMENTS OF THE FAIR TRADE REFORM

  • An innovative, market-based model was started after 15 years of groundwork that connected peasant farmers and their democratic struggle with Northern citizen-consumers. Alternative trade organizations in the North and producer organizations in the South were core to this reform.
  • The model created a significant semi-virtuous economy in coffee and some other commodities. Large elements of that farmer-supportive economy still exist.
  • The terms of trade, particularly in coffee, were changed for the better. Prices got better. More companies took positive action. Many industry leaders, particularly in coffee, did care and got a chance to support farmers and make their industry more human, and more democratic, and more sustainable. This experiment proved that the “market” that is glorified by many economists is just one of many possible markets. There is no reason that the market cannot be reformed in the direction of food justice, higher prices for farmers, and democracy.
  • Northern consumers became engaged and took actions, including consuming and campaigning in solidarity with small farmers. 
  • Hundreds of peasant organizations (most, but not all, in coffee) made steps forward due to the development of Fair Trade. Hundreds of thousands of peasants gained not just economically, but in terms of their own capacity. Likewise thousands of leaders and practitioners gained capacity. 

THE FAILURES OF THE FAIR TRADE REFORM

  • The importance of alternative trade organizations was never understood even by those closest to these reforms. Likewise, the alternative market in general (Fair Trade stores, co-ops) was not understood and was marginalized by all. The mainstream was worshipped and assumed to have “real” volume and “real” impact and was given power that it both didn’t have and didn’t earn. That mindset led directly to handing over power to those who were assumed to be powerful.
  • This model was both handed over to corporations by the certifiers, and stolen by the certifiers and the corporations. One of the most powerful reforms that had only come because of the work of organizations in the South and the North learning together in collaboration over 15 years was quickly and falsely applied to many other commodities that did not have the necessary conditions for food justice reform.
  • The success in coffee, due to the hard work of Southern farmers and Northern traders and their allies, was quickly and incorrectly applied to tea, bananas, sugar, chocolate, produce, clothing etc. on terms that were not beneficial to peasant farmers or Northern supporters. This has led us to a point where most products that claim to be Fair Trade are not, in any way, part of a food justice solution. The Fair Trade concept has been stolen, digested, and stripped of all meaning.
  • Citizen-consumers played an important role in the beginning of this reform but were ultimately used in the process. Not enough people got past the first level and learned how the coffee or tea system actually worked, and how to use their power over time. Almost immediately the citizen activist hat was downgraded and the consumer hat was glorified by the certification bureaucracies. Eventually there was no energy for real engagement. Fair Trade died quietly somewhere around the Great Recession. The movement for food justice and solidarity continues.
Reform #2: Certifications

By Deepak Khandelwal

Certification is something that we see across the food marketplace. Organic, Fair Trade, GMO-free, B Corp, Small Producer Symbol, Principle Six, Kosher, and the list goes on. While each needs its own assessment it's important to step back and understand the basic mechanics of certification and ask whether this type of tool, while maybe useful in other ways, has a role in driving food system reform.

In concept, a certification scheme is a set of rules and standards against which subjects (could be products or companies) are evaluated. Standard setting and enforcement might be possible for simple or clearly definable characteristics. If you want to certify that something is the color blue, then you would have to create a set of rules to define “blue” and the evaluation process by which something would be certified blue or not. So, for example, there might be ways to ensure that products are, in fact, from the correct origin, like San Marzano tomatoes or Darjeeling tea. Or there might be ways to certify different qualities of meat.

As the characteristics of what you are trying to standardize get more complex, there are a variety of challenges that arise. Organic and Fair Trade, for example, started off (and to some continue to be) very broad and holistic concepts. These are combinations of philosophies, practices, and also product attributes. How can these nuanced, amorphous concepts be transformed into standards and checklists that can be realistically tested against? Can you build standards without losing the heart of these concepts? How much control resides with those who author, manage and interpret standards, and can that be problematic?

One specific complexity is that food supply chains can be long and complex. There are a variety of physical, economic and relationship steps from soil to consumer. How is it possible to create standards and evaluate an entire supply chain? If Fair Trade, for example, is about trade justice from farmer to consumer, how could something be certified without acknowledging the role of all supply chain participants, especially consumers?

On a macro level, the certification dilemma we are left with is navigating between the complex and simple. A desire to push complex ideas but pressure to simplify down to those aspects and transactions which are easy to standardize, monitor, communicate and market. The organic movement was about biodiversity, people, and soil, yet the entire certification conversation is simply about chemicals inputs. 

Fair Trade was a dramatic revisioning of how farmers and consumers interact, yet certification focuses only on the economic transactions at one part of the supply chain. In simplification, core values and concepts are lost and this is a problem. So, while certifications might have some role in the marketplace, their importance in broader food system reform has to be questioned.

Stay tuned for next week’s post in which we we look at two other reforms: Food Co-ops and Boycotts.