[left: Valerie of Global Exchange and a guy from ENGAGE (sorry -- forgot name!)]

Maybe I’m too adventurous for my old age? When filling out the United Students for Fair Trade application, I checked off the home stay option. And USFT took me up on it — Jenny, a Univ. of Denver student, generously offered her futon.

When I walked in, I was greeted by a 3-foot hookah on the coffee table. A pretty ornate one at that.

[right: Lauren, USFT regional coordinator for the West]

Not that pot smoking’s something I consider juvenile or passe. I mean that I’ve always been fascinated with accoutrements, and that these seem to be getting more and more complicated as I get older. When I was in San Francisco, Jill used a humidifier type thing in conjunction with a bong. Her take was that it was healthier — less burning of the lungs. In the end you were left with a bowl of not ashes, but what looked like breadcrumbs.

Back to Denver — Jenny, a friend, and I were chatting, getting to know each other a bit, when another girl walked in to declare she’d made out with some guy called Colin in her car the night before. “Why were we in my car?” she mused.

Very chill, nice girls, they were. Still, hanging out with them, I felt quite old — in a positive way.

I think what got me in Denver was that — especially in conjunction with the excruciatingly cold weather that weekend — I kept having flashbacks to my college days in Indiana — One of the most boring and depressing times in my life that, most of the time, I manage to repress from my conscious memory.

Or maybe it was just my seasonal affective disorder kicking in. Cuz they were good times :) See the pics from the closing party.

Regardless, it’s good to be back. Ahhh — weather in the 60s — smoke free bars —

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[Part IV: the "What about the farmers" argument. The whole Certification Challenges series is here.]

It’s a good thing I still tutor kids for their SATs, cuz I’m using those long-abandoned math skills for this post.

We’re talking money now. Specifically, the money at TransFair USA, the nonprofit that provides the fair trade certification label for US companies.

Check out TransFair USA’s 2004 annual report (PDF), recently made avaliable on its website. If you do, you’ll see that 69% of TransFair USA’s operating budget came from license fees (Total revenue: $2,748,290. License fees: $1,895,395).

This means that close to 70% of TFUSA’s budget came from companies paying to use the fair trade certification logo.

Starbucks did 21% of all the fair trade coffee that came into the US last year. That means that Starbucks’ licensing fees accounted for roughly 14% of ALL of TransFair USA’s total revenues.*

You can see why TransFair USA loves Starbucks.

Now fair trade accounted for only 3.7% of Starbucks’ total coffee purchases in the last fiscal year. The fact that that 3.7% makes up 21% of all fair trade coffee coming into the US is a stat for both awe and fear.

What’s clear is, even with a minimal commitment to fair trade certification, Starbucks can wield much financial power over TFUSA.

Which explains why Cindy and other Starbucks reps tell me about how Starbucks has Paul Rice (TFUSA’s CEO) and Steve Sellers’ (TFUSA’s COO) support. When I talked to Cindy during the United Students for Fair Trade conference, she said that Paul had been up at Starbucks’ offices just last week. Meaning: TFUSA loves Starbucks. Why don’t you, green LA girl?

Now this love affair continues despite Starbucks not being so nice to fair trade certification all the time. For a company that says it has “similar goals as fair trade,” Starbucks really takes a lot of sideswipes at TransFair. For example, check out Starbucks’ latest letter to the Seattle Times, which implies Starbucks’ own C.A.F.E. practices does better than fair trade certification.

In fact, Starbucks hasn’t done much to follow TFUSA’s “recommendations.” One of them: To convert at least 5% of total green coffee purchases to fair trade within 2 years of launching labelled products. When did a Starbucks blend get a fair trade label? In 2000. How much of their coffee purchases is fair trade now, 6 years later? 3.7%.

So why’s TransFair so nice to Starbucks? I mean, check out the nice letter that Lloyd Gray, PR manager for TransFair USA, wrote for Starbucks’ Fall CSR newsletter.

Why’s TFUSA so nice to transnational companies doing miniscule percentages of fair trade coffee in general? Well… The other biggies — Protctor & Gamble, Sara Lee, and Dunkin Donuts — aren’t as open as Starbucks is in terms of the amount of fair trade they do. But you can imagine how large a percentage of TFUSA’s budget these companies make up, even if, as individual companies, fair trade doesn’t make up much of their purchases.

Which explains why TFUSA’s so eager to get these big multinational companies on board. And when smaller, 100% fair trade companies complain, they’re given the “What about the farmers” argument.

Update, 2/22/06: I wanna clarify that TFUSA is a nonprofit org — So I’m not saying that TFUSA employees would see any personal financial gain by working with big companies. But the big money that big companies bring in makes a big splash, and that splash of publicity could make TFUSA overeager to work with these companies, especially in the absence of formal mechanisms for input from other stakeholders in the fair trade movement.

*The reason the percentages are approximate is because TFUSA’s licensing fees run between 5-10 cents per lb, depending on volume and percentage. In addition, TFUSA offers a discount for paying bills on time

Updates: Part VI: Presong Seesa-Ard’s comments.

[The whole Certification Challenges series is here.]

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[Part III: a rundown of people and orgs who felt certification standards need to change. The whole Certification Challenges series is here.]

By far the most common argument from TransFair USA about why it certifies products from companies that only do a tiny bit of fair trade: “What about the farmers?”

It goes along the lines of this comment from bay area fair trade dude: “I’m just wondering who would like to announce to all the farmers whose products are sold to Sam’s Club, McDonalds, and Starbucks, that they can no longer rely upon this business because, well, they’re bad companies and politically active people in the Fair Trade movement don’t like it…anyone?”

That line of logic argues: If you cared about the farmers, you’d want more companies — even multinationals — doing fair trade coffee. That way, more farmers would benefit. So if you’re against multinationals joining, you’re focusing on something other than benefiting farmers.

A logic that seems, well, somewhat logical, until one examines how paternalizing it is.

Interpret that, and it becomes: Farmers want money, and they don’t care how they get it. They don’t care about what fair trade means, they don’t care about a more just world everywhere. They just have their own personal needs, and that’s all they care about at this point.

The Thai rice farmer who spoke up at the “New Challenges in Fair Trade Certification” begged to differ. And others, such as Monika Firl of Cooperative Coffees, spoke up to say that in her conversations with coffee producers, some had said they didn’t want their products fair trade certified if that meant that their products would carry the same certification sticker as those from some of the big companies that had, in the past, taken advantage of the unfair trade rules.

That’s not to say that all farmers would rather starve than take money from Nestle. Speaking personally, if I were starving, I’m not sure I’d have the strength of will to resist taking whatever I could get, even if I hated Nestle.

I’m simply saying we can’t group all farmers together into one monolithic group with one opinion and one desire — more money.

What’s happening now is that companies like Nestle that were instrumental in creating poverty in places like Ethiopia and other coffee growing countries are now expected to be lauded for dipping their toes into fair trade certification. People who were directly affected by the choices of companies like Nestle in the past may not be all that psyched that now, “only” 99.9% of Nestle’s coffee’s bought through unfair terms, as opposed to the previous 100%.

As far as I know, no coffee farmers read green LA girl. Which means that this type of discussion can end up being a bunch of non-farmers trying to speak for farmers — somewhat paternalizing in itself. Of course, money — the need, the want, the greed for it — plays a role for all of us in this capitalist culture. But we can’t expect others’ needs, wants, and greeds to always coincide with our own.

That said — The next post in this string will focus on money: Its pushes, its pulls, and its effects for TransFair USA, for small companies, and for big, transnational companies.

Updates: Part V: Why TransFair USA loves Starbucks.

[The whole Certification Challenges series is here.]

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[Part II, the pre-party before the workshop. The whole Certification Challenges series is here.]

First question to the panel: Can transnational companies participate in the fair trade movement? And if so, under what conditions?

All panelists — this is at the “New Challenges for Fair Trade Certification” workshop at the United Students for Fair Trade convergence last weekend — said yes to the first question. A good thing, because big, international companies already have products carrying the fair trade certified seal.

What surprised me was the level of consensus in the room regarding the second question. Aside from Jean of TransFair USA and the 2 Starbucks reps in the room — Cindy and Andy — pretty much everyone who spoke argued for more strict, binding and public conditions and guidelines.

An incomplete list of people and orgs who felt certification standards need to change [go here for more deets on the orgs]:

As a 100% fair trade certified company, Equal Exchange, represented by Julia, is, at least as of now, backing fair trade certification both ideologically and financially. Equal Exchange also has a lot to lose if the fair trade certification standards become — or even become perceived as — unreliable or untrustworthy — and because (or perhaps inspite?) of it, this co-op’s made their disenchantment with the current direction with fair trade certification known.

A few weeks ago, Equal Exchange’s Rodney North released a public letter regarding this matter, which is posted publicly at the bottom of this email, as it clearly defines not only Equal Exchange’s position, but also echoes many of the words of other companies, organizations, and individuals at the panel.

Thanksgiving Coffee, represented by Paul (not on panel), is somewhere between 30 and 50 percent certified, but can be described as a mission-based company, very much in support of fair trade ideals. I’d been told by TransFair USA employees that non-100% mission-driven companies would oppose stricter guidelines for fair trade certification because it would put them at a disadvantage compared to 100% fair trade certified companies. Instead, Paul spoke up in favor of such standards.

Monika represented Cooperative Coffees, an organization that includes 3 roasters whose members were so unhappy with the direction fair trade certification was going that they publicly severed ties with TransFair USA a few years back — meaning a few of the companies represented here are currently 0% certified. That said, many Co-Op Coffees members still sport the certification seal, and even those who left say they left only regretfully, after a 2-year-long attempt to salvage the relationship with TransFair USA failed. It seems that members of Co-op Coffees are generally behind the idea of fair trade certification, but that many have grave concerns about the way certification is done as of now. In addition, Andy of Peace Coffee (not on panel) a member of Co-op Coffees, spoke up to say that Paul already voiced what he wanted to say.

Global Exchange, represented by Valerie, is a non-profit organization that’s been publicly pushing big international companies like Nestle and Starbucks to market more fair trade certified goods. Beforehand, an employee of TransFair USA had told me that NGOs such as Global Exchange would NOT support stricter fair trade standards because if stricter standards led to big companies getting kicked off the fair trade roster, that would nullify the work done to bring those big companies into the fair trade fold in the first place. In stead, Valerie spoke up to point out that Starbucks’ meager 3.7% of fair trade certified products — despite having been welcomed into the fair trade market by TransFair USA about 6 years ago — does not represent a “commitment to fair trade.” I believe her exact words were “Starbucks shouldn’t even be here.”

(Updated 2/28/06) Presong Seesa-Ard, Thailand fair trade rice farmer.Presong’s statements here.

And now — The letter from Rodney North of Equal Exchange, titled “On Fair Trade ‘figleafs’”:

Something odd, and possibly very disturbing, happened recently in the United Kingdom that should interest everyone who believes that Fair Trade can help create a more just, morally grounded global economy. Nestlé—the world’s largest food conglomerate, and most boycotted company—recently introduced to the UK market its first ever Fair Trade Certified™ product, an instant coffee called “Partners Blend™”. But so what? Large U.S. corporations have already jumped (or been pushed) onto the Fair Trade bandwagon. ‘What’s the problem? Don’t we want corporations to move in this direction?’. Good point. We do. But what we’re learning from the Nestlé example is that even a tiny bit of Fair Trade can go a long way to polishing even the worst corporate image, and all at the expense of real reform.

For example, a recent survey in the UK, where Fair Trade enjoys a much higher public profile, showed that as many as 75% of otherwise knowledgeable shoppers who support Fair Trade were, in fact, mistaken and thought that the Fair Trade Certified™ seal meant the company had been evaluated and judged to be free of ethical concerns. We see the same pattern of consumer confusion in the US. The truth is the Fair Trade certification system examines only the individual products bearing the seal, and not companies. In the case of Nestlé it is estimated that, in fact, their Partners Blend™ represents less than 1/10th of 1% of Nestlé’s annual coffee imports, leaving the other 99.9% purchased the same old way. Likewise, Nestlé’s vast global trade in cocoa, sugar, dairy products, and dozens of other commodities remains unchanged. So, given the “Fair Trade glow” that Partners Blend™ might bring to the Nestlé brand (in the UK at least) this small product launch could be a very inexpensive way to overhaul their tarnished reputation while leaving their business operations untouched.

What does this have to do with US consumers? Plenty. The same rules that allow Nestlé to put on a Fair Trade figleaf in the UK market, apply in the US as well. And that’s why we at Equal Exchange are choosing to speak out, because we see this as the latest in a long line of actions by the world’s largest food businesses to make small gestures that look good in isolation, but ultimately forestall real change for impoverished small farmers, and instead offer marketing, PR, and token efforts in its place. In the same month as Nestlé’s product launch two of the world’s other largest coffee buyers also introduced Fair Trade Certified™ coffees, one in the US, and both as part of overall coffee product lines that are only 3% Fair Trade Certified™, or less.

Certainly marketplace opportunism is not limited to the grocery store shelves. Examples are all around us. Just check out two non-profits who help spotlight environmental greenwashing, and firms who exploit breast cancer for marketing purposes: (here and here). Conversely, Co-op America’s Green Pages can help you find companies who have a more authentic commitment to responsible conduct.

It could be argued that a corporation has to begin somewhere, and that these small product introductions at least represent a beginning. True enough. But there are signs to see if a corporation is sincere. Looking at just the realm of Fair Trade coffee—where we know something—here are some suggestions how large companies can make a convincing start:

● Convert an existing product to Fair Trade status, one that already has an established customer base.

● Offer consumers a variety of Fair Trade choices (regular, decaf, flavored, whole bean or ground, etc.)

● Utilize Fair Trade ingredients (such as cocoa, tea, sugar) in the corporation’s other products.

● Most importantly, convert a significant portion of coffee imports (we recommend at least 5%) to demonstrate good faith, and steadily increase that % over time.

We also recommend that the exclusive Fair Trade certifier in the U.S., TransFair USA, do its part on this front, by raising the bar so as to preclude tokenism. Requiring a minimum conversion of at least 5% before allowing use of the Fair Trade seal would be the best first step.

What’s at risk here? That thanks to corporate marketing machines merely token use of Fair Trade certification can lead well-intended consumers to mistakenly associate some whole brands with Fair Trade. This false image of reform can then pre-maturely undermine the public pressure for real change.

At the inception of the Fair Trade movement 20 years ago it was intended to be an alternative approach to international trade that addressed the endemic poverty, economic vulnerability, and isolation of the millions of small-scale farmers who grow most of the world’s tropical agricultural commodities, and as such challenge the status quo. It was not designed as a marketing device.

You can read the original Equal Exchange press release regarding Nestlé here.

Part IV to come — It’ll kick off with TransFair USA and Starbucks’ arguments.

Updates: Part IV: the “What about the farmers” argument.

[The whole Certification Challenges series is here.]

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[Part I is here. The whole Certification Challenges series is here.]

Best way to loosen up panel members before a potentially tense workshop: 4 bottles of Ca’ Del Solo red.

Of course, this also meant everyone was a lil hung over, and perhaps a lil extra on-edge, at the panel the next morning. In my defense, I drank most of the stuff myself.

Anyway — It made for an interesting Saturday night when the four panelists for the “New Challenges in Fair Trade Certification” workshop @ the United Students for Fair Trade convergence met up at the Mercury Cafe, the night before the big event .

[Left to right: Jean of TransFair USA, Monika of Co-op Coffees, Julia of Equal Exchange, Dan of Univ. Wisconsin-Madison. Go here for more deets on the orgs.]

We got along so well, drinking and arguing passionately. So well, in fact, that the panelists started dancing together. Voluntarily. I got photographic proof!

I left the dancing to go back to the bar for a cosmo and chatted with local people — Oak and Dew — yes, those were really the names they went by —

No devils were dancing at the Mercury Cafe this night, however. The title’ll make more sense after the next post —

[more pics from the dinner and dancing here]

Updates: Part III: a rundown of people and orgs who felt certification standards need to change.

[The whole Certification Challenges series is here.]

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