Poverty is not the problem. The problem is an unjust and irrational system of trade. Fair Trade’s current focus on the effects of the system (i.e. poverty) and not the means of changing it (developing the values and principles necessary for creating a new type of market) reflects a major crisis for the fair trade movement.
This is a view expressed recently by fair trade legend Francisco VanderHoff Boersma, co-founder of ‘Max Havelaar’ (the first fair trade certifying body) and the prominent, small-farmer, Mexican co-operative UCIRI (Union of Indigenous Communities of the Region of Isthmus). Speaking on behalf of poor producers, Francisco argues that the ‘fair trade project’ as it was envisioned by the members of the UCIRI in 1988 must be an urgent priority of all those involved in current and future fair trade practices.
For the poor and marginalised members of the UCIRI, fair trade is first and foremost about the creation of a ‘different’ type of market. It is about creating a market that seeks to redress the devastating consequences of ‘neo liberal’ economic rationalism and challenge the market principles of globalisation and the capitalist system.
“These communities offer an alternative vision, a utopian perspective in the best sense of the word, as the potential for a creative and just society in which markets provide a means for meeting human needs rather than defining the essence of what it is to be human.”
What this “Different Market” is NOT!
- A development project paternalistic in nature and overtly focused on poverty alleviation – a project that seeks to help the poor, while not taking their perspectives seriously or recognizing that they are the best agents of their own development
- An alternative market that embodies any notion of charity, relief work or any other non-reciprocal form of aid
- A transitional market designed for enabling inefficient producers to develop the capacity to compete in the mainstream market – it is not a training ground nor an apprenticeship
- A market limited to marginalised producers who need some form of price protection, but one for all “in the conviction that the accumulation of knowledge and wisdom of marginalised production has become the foundation of the market in its entirety”.
- A ‘niche’ market that coexists with the larger capitalist market, but rather one where alternative trade begins to correct and create new conditions within traditional structures and practice.
What this “Different Market” should seek TO BE!
- A market where all costs (including social & environmental) are internalized and reflected in the price of products
- A market where people are not just another factor of production, but are the very subjects of production
- A market that is effective and efficient in a socially responsible fashion where quality products meet market needs; where production methods make the best use of available resources
- A market that is ecologically sustainable
- A market that is socially sustainable where the entire range of social costs are incorporated into the price of products; where local producers have greater control and solidarity with the supply chain
- A market that ‘re-embeds the economy into society’, where reducing the social distance between producers and consumers fosters the formation of authentic alliances of mutual support and benefit.
The Changes Required of Fair Trade Now
- Move the focus off ‘poverty reduction’ and back to building the values and principles necessary for the ‘different market’ to flourish – The ‘Northerners’ in charge of the fair trade market “are more often committed to the goal of poverty reduction than they are to upholding the values and practices of the alternative market. As a result, they often seem to be selling products ‘at any cost’…a cost to which small producers are totally opposed”.
- Promote ‘real’ democratic practices within all fair trade institutions and in their dealing with other organizations- this is the only way to facilitate true dialogue that includes all producers and consumers
- Seek to learn from and demonstrate respect for the collective wisdom and experience of the small producers who are in a privileged position to see and understand the ‘real’ nature of the problem – charity and exclusion are no longer acceptable nor viable options
And finally and most importantly…
- Stop pushing, posturing and promoting ‘fair trade’ as ‘the best and better than all the rest’. Start repositioning the fairer trading movement and market as a small, emerging interdependent entity within a far wider struggle for social justice.
Join up, connect, make alliances and create collaborations with all those ‘others’ who are seeking better, more workable alternatives to the neo-liberal trade regimes that guarantee an ‘unfair future’ for us all.
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I couldn’t agree more with this post. Well done. Many of these ideas are similar to those I was I was trying to articulate in our discussions of Fairtrade 2.0. The bottom line is that we need to start holding the buyers accountable to the original ethos or standards of fair trade and at the same time make it easier for consumers to identify those buyers. Simply allowing large multinationals to reap enormous marketing benefits simply because some or all of their inputs are Fairtrade is not acceptable.
HI Patrick,
Thanks so much for your positive and insightful comments. You offer some great practical clarification on the views expressed by Francisco and the members of UCIRI regarding fair trade’s urgent need to refocus on developing the values and principles necessary for creating a new type of market.
My biggest concern with the achievement of this refocusing or for that matter any development of Fairtrade 2.0 is the apparent lack of engagement, dialogue or transparency by FLO and its member organisations. They seem to be either unwilling or unable to offer their perspectives on the need to rethink or rework the current direction of the fair trade movement or market.
Is it that FLO feels that these concerns and aspirations for change are not shared by the majority of those who now make up the members of the fair trade network?
Is it that the workers in FLO and its members organizations are just too busy and too focused on the day to day marketing and maintaining of the model of ’sell fair trade at any cost’ that they don’t have the time or energy for critical self-reflection?
Or is it that for the majority of those who support fair trade are comfortable and comforted with their own and other fair trade supporters efforts toward ‘poverty reduction’ and not really interested in challenging the validity of the mainstream trade regimes? As such FLO see’s no evidence from those involved to suggest that they should review or rework their approach?
What are your thoughts?
Yeah, interesting and I was really blown away by the audio interview.
I’ve been trying to turn this around in my head along with what Patrick was saying to me on Twitter yesterday. Francisco seems to be saying that the standard fairtrade system is so broken and compromised that it is no longer fit for purpose so a different producer-led system is needed. At the same time I don’t really understand Patrick’s position in that he suggests what are needed are ‘equitable’ and ‘fair’ relationships.
The problem it seems to me, is that there are no definitions of equality and fairness. Can a system which requires a large number of people to work extremely hard and long hours whilst existing on $3 or $4 a day ever be described as fair? Clearly money is worth different amounts in different places, but whichever way you cut it, that is not anything beyond a basic living wage anywhere on earth. When the supply chain system swallows up the vast majority of the price a northern consumer pays (and contributes to our high wages, roads hospitals etc) and requires the producer to remain without these things, this is not equitable.
The alternative way we can look at the situation we have is to say that the farmers now have more than they had before hence the system is ‘more equitable’ and ‘more fair’ than it was before. We then have the problem that the large multinationals can water-down the fairtrade standard to its bare essentials and claim it is ‘fair’.
The problem is that it extremely hard to imagine a system whereby all players and producers are actually equals. If we were to pay for coffee as if it were produced in Europe, North American or Australia (with all of the services and wages and other benefits that implies to citizens of those places), how much would it cost? Would anyone want to pay that price? Patrick again said that ‘overcompensating’ producers is unsustainable. Yet again, I don’t really understand what he means.
I think he is implying that there is a price which the market will stand paying producers and that any system requiring increased payments to producers is doomed to be unsustainable. If that is the case then we’re buggered because the price that most fairtrade producers need to receive over and above what they currently receive to enjoy what most people would describe as a ‘fair’ and ‘equitable’ compensation for their work allowing them something beyond the very basic $4 a day scraping-together-a-life with none of the things most of us take for granted is MULTIPLES of what they currently receive.
Hi Joe,
I really appreciate the effort and energy you put into your responses. It is so clear to me that you have real concerns about making fair trade work for its key stakeholders – poor and marginalized producers.
You raise an important point about no real shared understanding or definition of equity and and fairness. From what I read in the work and thinking of Francisco is that it is not up to us (Northerners) to determine what we think about either concept. The point he makes is whatever fair trade is about, whether it be the meaning of fairness or equity, or that is a fair price or what is sustainable, or how the fair trade market should work. or who should and should not be involved must be primarily developed and directed by the producers.
While our role as supporters of this ‘producer-lead’ version of fair trade is not clear, it would seem to be something around using our skills, resources, and influence to do whatever is needed to build the credibility, viability and success of this version of fair trade so that it can function as a genuine democratic trading alternative to the current neo-liberal trading regimes.
What do you think?
Cheers
Scott
Scott, maybe our role is to hold onto a dream of a better world and do whatever our brethren ask us to help them – using the unearned gifts of knowledge, education, wealth and power we have at our disposal.
At a seminar I went to yesterday we were reminded that Martin Luther King Junior had a ‘dream’ rather than a ‘nightmare’. Maybe it is not our place to dictate what the dreams and aspirations of poor producers should be (and, goodness, they have many many things they could legitimately dream of) but to catch the dream and commit ourselves to working to fulfil it – even if it has impacts on our own standard/level of wealth and living. In the process I think we’ll appreciate the anger that producers feel about the clutter which has been collected around our best (fairtrade) efforts and the urgency to find a better way.
Another thing that struck me was this: there is a dichotomy between trying to help a large number of people a little and a smaller number a lot. And maybe that is where the divide between fairtrade 1.0 and fairtrade 2.0 sits.
Joe,
Love your thinking here and how you express it!
It will be interesting to watch what comes out of Mexico in the coming months!
Thanks again for sharing and caring!!
Cheers
Scott
I think he is implying that there is a price which the market will stand paying producers and that any system requiring increased payments to producers is doomed to be unsustainable.
That’s it exactly Joe. The law of supply and demand dictate that some goods and services are worth more than others. If your business is trading one of the lesser value commodities, then there is only so much money you are going to be able to receive for your goods. It’s also possible that this amount of money might just keep you above the poverty line. That’s the reality and you are not going to change that.
Any sustainable solution to end world poverty has to jibe with basic market principles.
HI Patrick,
Thanks again for your comments and clarifications!
It is clear from yours and Joe’s comments and the experiences of fairer traders over last three decades, that developing an alternative trading system where the price of products, regardless of type, is an accurate reflection of the true social and environmental costs of production, will not be easy.
It would seem however, that without all those committed to a fairer trading future staying focused on the core project of developing such an alternative, the fairness and sustainability of all our futures is threatened.
That is of course if the now irreversible changes to our climate will permit any sort of trading future?
Great to have you involved and contributing!
Cheers
Scott
I think the basic market principles are junk if they mean there is a limit to the development of producers. The market favours the interests of the consumers and Northern big business over the producers even when the producers control a massive percentage of the total crop of a particular product. It shouldn’t.
I think the basic market principles are junk if they mean there is a limit to the development of producers
The only limit is how much a consumer is willing to pay. That doesnt mean that those that trade in low value commodities are doomed. There is still planty of scope for making the market fair.