Fair Trade USA, until recently known as Transfair, has announced its resignation from membership of the international Fairtrade labelling system, effective from the end of December 2011.

“FLO and Fair Trade USA share a belief in the importance of empowering producers and workers around the world to improve their lives through better terms of trade. However, as we look to the future, we recognize that we have different perspectives on how best to achieve this common mission.”

- Fair Trade USA and FLO joint statement, Thursday 15th September 2011

The intention appears to be for Fairtrade International (FLO) and Fair Trade USA to collaborate as best they can to maintain continuity for producers and companies, but it is clear that most players in the movement would rather this had not happened.

Fairtrade and Cocoa commodity briefingThe Fairtrade Foundation recently pubished a useful "commodity briefing" on Fairtrade and Cocoa, combining a clear and succinct overview of the global cocoa industry with a case for why Fairtrade is needed.

The broad picture it paints is one of growing global demand for chocolate, driven by rising incomes in emerging economies, increasingly outstripping available cocoa supplies. In West Africa, the productivity of cocoa farming is low, with a lack of access to finance and technology, outdated farming methods, and no incentives to improve depleted soil or replace ageing trees.

Cocoa farmers in West Africa are likely to receive 3.5 to 6.4 per cent of the value of a chocolate bar, compared with around 16 per cent in the 1980s. Over the same period, the manufacturers' share has increased from 56 to 70 per cent and the retailers' from 12 to 17 per cent. Often their children can see no future in cocoa: the average age of a cocoa farmer in West Africa is 51 years.

Trading Visions, in collaboration with the LSE International Development Department, held a well attended public discussion debate on Tuesday 1st March 2011. The topic was 'Has Fairtrade asked for enough?'.

You can watch and listen to the panellists and the discussion below.


Deborah Doane is Director of the World Development Movement, which campaigns for justice and equality for the world's poor. Deborah was a founder and trustee of AntiApathy, and recently joined the Board of the Fairtrade Foundation.

"From the mainstream players, I think Fairtrade can demand more, without losing them... because of the incredible power of the movement behind it." - Deborah Doane

Adam Brett co-founded Tropical Wholefoods, and is a director of Fullwell Mill. He has been a self employed entrepreneur since 1990, working on the development of fair trade food businesses in Uganda, Burkina Faso, Pakistan, Zanzibar and Zambia. He is a Trustee and Judge for the Ashden Awards for Renewable Energy.

"I think [supply chains] are absolutely destined to be inefficient, in an extraordinary way. And conventional economics - of ‘oh yes everything's going to work out, we're going to end up with a nice optimal situation where we're going to live in the best of all possible worlds’ - is completely childish! We actually have to grab our supply chains by the proverbial soft parts and squeeze, to make sure that they work as well as we can possibly make them work." - Adam Brett

Julia Clark is a consultant. As Head of Marketing at Tate & Lyle Sugars, she led the switch of the company’s entire retail sugar range to Fairtrade in 2008. At the time this was the largest ever commitment to Fairtrade by any major UK food or drink brand.

"The people at the bottom of the supply chain are not only disenfranchised and disempowered by the system, their own communities haven't taught them how to grasp opportunities and make much of those opportunities. They're small cane farmers because they don't know how to be anything else. And Fairtrade is starting to teach them how to be business people." - Julia Clark

Robin Murray is an industrial economist and a co-founder and board member of Twin Trading. Twin has established a number of pioneering producer-owned Fairtrade companies, notably Cafédirect, Divine Chocolate, Agrofair UK and Liberation Nuts.

"We're trying to create a different kind of economy. An economy not mediated by markets, but where markets are lodged within a reciprocal or mutual economy." - Robin Murray

Questions and Discussion

"We buy organic Fairtrade dried mangos for about 6 euros a kilo, when it gets to the shop it costs about 25 euros a kilo. So about 22% is going back to the producer. 65% goes straight into supermarkets' pockets." - Adam Brett

"The retail power [of supermarkets] is extraordinary - and it drags us all down with it." - Deborah Doane

The whole debate is also available as a podcast.

If you've walked past an Oxfam shop this Fairtrade Fortnight you might have noticed a rather fetching poster in the window showcasing the fact that they sell various "Fairtrade masterpieces".


The poster features products from Liberation Nuts, Traidcraft, Tropical Wholefoods, Divine Chocolate and Cafédirect - and Oxfam have also produced a little recipe leaflet to use with them.

Yesterday's report and press release from the free market think tank, the Institute of Economic Affairs (IEA), is not the first time they have made anti-Fairtrade noises.

Over several years they have criticised Fairtrade on the basis of its claims and seem to view the large proportion of the population who 'get' Fairtrade as deluded.

Yet, they still fail to understand quite what Fairtrade is. It seems that the IEA views Fairtrade as a type of charity, giving a little bit more money here and there to poor people, while the giver needs to be assured at every step that the money is spent wisely.

For anyone who has met Fairtrade producers, we know it is about so much more than just the money. It's about transforming the trading relationship between consumers and producers.

One of the latest criticisms levelled at Fairtrade by the IEA is that "Fairtrade products can squeeze out from the market other socially labelled products". Surely a bizarre statement from a free market think tank! If Fairtrade products are proving more popular with consumers in our 'free' market in the UK then surely this is what is supposed to happen. No-one is forcing people to buy Fairtrade.

Unfortunately the IEA remain short of solutions for poverty in developing countries. While repeating the manta that free trade is the answer, not Fairtrade (aka charity in their eyes), they fail to acknowledge that the market is anything but free when poorer countries try to trade with us.

When the IEA starts a more vocal campaign to lift trade barriers which harm the poorest, I'll start to take them more seriously.

I attended an energetic and enjoyable Fairtrade supporters conference put on by the Fairtrade Foundation on Saturday.

It felt to me like it had really built on the success of last year's conference, with more reflection and honesty about difficult issues, and lots of useful information being shared.

Most of all, it's great to have so many of the brilliant campaigners from around the Fairtrade movement gathered together in one place.

I enjoyed the contrast of watching Caroline Lucas, Green MP for Brighton Pavilion, and Andrew Ethuru, a Kenyan producer director of Cafédirect, speak one after the other in the plenary session.

Caroline talks very quickly, her words tumbling out passionately and eloquently, as she drew our attention to the big picture, the need to shift from a world based on relentless economic growth, to one that increases human well being.

She highlighted the fact that although DFID's overall budget isn't being cut, big changes are being made, for example big cuts in funding for development awareness, and for policy work, in other words less focus on tackling underlying causes.

Andrew Ethuru on the other hand spoke with a more measured pace, taking his time, and building up gradually to an impassioned conclusion. Andrew is chairman of the Michimikuru tea co-operative's Fairtrade Premium committee in Kenya, their tea goes into Cafédirect's 'Everyday Tea' range.

Andrew spoke of the challenge now for Michimukuru, which is that even as overall sales of Fairtrade tea are growing, Michimikuru’s Fairtrade sales are declining. His warning was that market share for small producers is shrinking as multinationals with big tea estates move into mass market Fairtrade tea.

"The question we have to ask ourselves is," he said, "has Fairtrade been hijacked, because there is big money there?"

He asserted that at the heart of Fairtrade should be small producers, small farms, and labour-intensive high-quality production.

Good news for Fairtrade cocoa farmers.

FLO (Fairtrade Labelling Organisations International), the standards setting body for the Fairtrade Mark, have announced new, higher prices for Fairtrade cocoa, which will kick in on 1st January 2011.

The Fairtrade minimum price for cocoa will increase from $1,600 a tonne to $2,000 a tonne. The Fairtrade premium will increase from $150 a tonne to $200 a tonne.

The new Fairtrade minimum price is not immediately relevant, as cocoa prices are well above it, currently at around $2,800 a tonne, although prices are starting to fall again as experts predict an end to the production deficits of recent years.

But FLO expects cocoa farmer organisations to reap at least $10m in Fairtrade premium payments in 2011.

Last week saw years of patient courtship pay off for the Fairtrade Foundation, as it secured Fairtrade status for the nation’s favourite “chocolate biscuit bar”, Kit Kat. The cocoa will come from co-operatives in Côte d’Ivoire, and the sugar from farmers in Belize.

Fairtrade Kit Kat image

Appropriately enough, the news broke on the same day as cocoa prices reached one of their recent peaks: $3,378 per tonne on the New York futures market, the highest level since 1985. Prices are said to have been boosted by speculation about dwindling supplies from Côte d’Ivoire.

The news has been greeted with a good deal of unease among campaigners and activists. Though Kit Kat was originally launched in 1935 by Rowntree and is something of a British institution, Rowntree was of course taken over by Nestlé in 1988, just as Cadbury is looking likely to be swallowed up before too long. And Nestlé has the dubious distinction of being one of the world’s most notoriously unethical companies.

It was the Fairtrade Supporters Conference in London today, one of the best Fairtrade Foundation conferences I've attended.

I would have liked to have seen more reflection about the future of Fairtrade campaigning in the UK. This sort of conference could be the space for genuine consultation and strategic debate about the direction of the Fairtrade movement. As it is, they are always rather top-down in approach and tend to take the campaigners for granted, treating them as a resource to be deployed rather than as co-creators in a shared endeavour.