Most of you already know that the Fairtrade Labelling Organization (FLO) decided NOT to raise the minimum price for fair trade certified coffee. FLO’s the international org that certifies fair trade co-ops. It serves as an umbrella org for the various national orgs — such as TransFair USA for the US, or Fairtrade Labelling ANZ for Australia — that provide fair trade product certifications.
Considering the fact that these minimum prices haven’t been raised in over a decade, FLO’s decision to review the price back in November last year was met with much excitement.
So FLO’s decision last month to NOT raise the prices was met with disappointment by many activists. You can read the minutes of that FLO meeting here (PDF).
Interestingly, it appears that TransFair USA — the US arm of sorts for FLO — is also somewhat disappointed. Writes Jean of TFUSA to the United Students for Fair Trade listserv:
TransFair USA is actually in favor of a modest price increase in order to accommodate cost of production increases due primarily to inflation (higher fuel and energy costs, etc.) We also feel the current organic premium may not be enough to cover the cost of converting to organic production. U.S. industry, on balance, was also willing to raise the minimum coffee price.
In fact, U.S roasters licensed to sell FTC coffee are already paying an average $1.48 per pound (2006 combined weighted average of FTC organic and conventional), which is higher than the Fair Trade minimum. However, other Fair Trade markets (remember, it’s an international system!) have voiced concern about raising the minimum price, as their specialty coffee market is less developed than in the U.S.
In other words, American consumers are more willing to pay a premium for high-quality coffee than Europeans, who are still by and large accustomed to cheaper instant coffee. And, obviously, higher Fair Trade prices could potentially backfire on producers if consumers aren’t willing to pay them.
Unfortunately TFUSA can’t just raise the prices for the fair trade coffee that comes into the US. FLO has to make that decision.
So what’s going on at FLO? Vincent, who interned at FLO last year, says he too is disappointed that the prices did not go up. He does, however, wonder if this is mainly due to FLO’s being underfunded: “The fair trade labeling system is very much like the U.N. – if anything, FLO members (such as TransFair USA) should work towards increasing their funding of FLO activities in order to be faster at developing new prices and increasing producer support from there.”
Vincent notes that it’s only been a few months since FLO announced a price review for coffee — and that the price setting process usually takes 3-6 months.
Others’ve pointed out that the need for a price review — and all attendant info — has been something people have been pointing out for years — meaning that FLO has had a v. long time — much longer than since the date of the official announcement about starting a review — to gather information and come to a decision about a new price.
FLO, for its part, says it “has the aim of implementing new prices in October 2007 latest.” Which I suppose, considering that it’s been over a decade already, is not that far in the future –
Update, 2/7/07: United Students for Fair Trade writes a formal letter (PDF) expressing dismay at the lack of price change to FLO.
Update, 3/22/07: FLO raises the amount of money per lb that’ll go to fair trade coffee co-ops.
My worry is that all this is symptomatic of deeper tensions in the very idea that “certification = fair trade.” As long as we buy into that formula, we’ll find ourselves in the current situation: we let someone else decide for us what is fair, and that entity becomes a bottleneck when a need for change arises.
I don’t believe this stems from a lack of good will on the part of the people in TransFair USA, or even necessarily FLO itself. I think it’s a structural problem, and I think it requires a structural solution.
The folks at Just Coffee and I have started thinking about what such a structural solution might look like. We would love your feedback.
Comment by Steve — February 7, 2007 @ 9:57 am
hey siel
thanks for all your fantasticness. you are read every day over here in ANZ.
just a note – FTAANZ is NOT a member of FLO. Fairtrade Labelling ANZ is a member of FLO. FTAANZ and Fairtrade Labelling ANZ are two different orgs.
love from down under
Comment by Cam — February 7, 2007 @ 5:08 pm
Steve — I’m not sure that what you’re proposing moves away from certification. I see how it moves away from certification by FLO or TFUSA, but from what I can tell, it’ll still require some sort of certification. I’m not saying certification’s bad — I think it’s necessary, in fact. I’m just trying to clarify the argument you’re making. It’s interesting to me personally b/c my critique about your Just Things was exactly about my feeling that Just Things too strongly equated fair trade with certification :)
Cam — Just corrected the mixup on the post! Sorry about that — Hope all’s well in Australia — I wanna visit one day –
Comment by Siel — February 7, 2007 @ 7:56 pm
ah siel, you are ever the response one!!! :)
yes you have to visit. we’ll organise something and bring you out for a speakers tour ;) fire up all the young activists here.
Comment by Cam — February 7, 2007 @ 11:57 pm
I wonder sometimes why those who are critical of FLO build their own structure exclusive of FLO certification rather than building upon it.
I agree that FLO is becoming more mainstream, and decisions such as pricing are slow and tedious. However, I do not find this a reason to throw out the whole system. Rather, this mainstream migration opens up new markets for other certifications that build upon the FLO standards (Not only are we FLO Certified but we are also….). And someday those “higher” standards will be considered slow and ineffective. This movement is in a positive direction. We should harmoniously blend with it, while striving for more excellence… rather, than be devisive. There is a positive way to do this.
Comment by e — February 8, 2007 @ 10:35 am
Siel, this alternative system couldn’t abandon certification altogether. There would always need to be some indicator that a product was part of the system. The distinction is that it wouldn’t certify the price, but the transparency. Our sense is that with full transparency, the price takes care of itself, and much more dynamically than currently.
I understand your critique, and I address it in the next issue of JT, which should be out today.
e, we haven’t said that this will necessarily compete with FLO’s certification. There’s no reason a seller couldn’t have both.
Comment by Steve — February 8, 2007 @ 11:08 am
I’m all for transparency, but I do think that there’s something to be said for ease of recognition on the consumer’s part. I say this as someone who DOES think consumers DO need to take more responsibility for their actions — yet I also feel that often, coffee companies don’t realize that coffee is just 1 of many many things that people buy.
Meaning: I’ve talked to some diehard fair trade coffee people and asked them about their other buying practices. Where’d they get their computers, for ex? What car do they drive, and why? How did they furnish their houses? Where do they get their clothes? Have they signed up for green energy? Do they buy carbon offsets?
To almost all of these Qs, almost all of these wonderful coffee companies have replied with a “um, I don’t know, but yeah, that’s important” sort of response.
My point is that we are all people who buy many things other than coffee. Of course, if our life’s work’s in coffee, we’re gonna feel that others should also put a lotta research into that field as we’re passionate about it and see its importance.
But most people are not working in the coffee business. And while I don’t want to dumb things down to the simple “look for the label” level, I’m also skeptical about a program that — despite its wonderful efforts at transparency — basically would require people to slog through a lot of complicated information — AND research what that information means to try to make sense of it.
We could very easily limit the fair trade movement down to the full-time — or at least a v. serious part time — diehards. But that, to me, seems an elitist move. I feel lucky to have discovered the fair trade movement, and I’d like to see a fair trade movement that’s not so prohibitive as to scare away potential new activists –
Comment by Siel — February 9, 2007 @ 12:19 am