Fair Trade certified products have exploded into markets from import craft shops to chain coffee shops and supermarkets, but how many consumers educate themselves about what the certification means and how it works?  Fair Trade began as a radical group of individuals using trade to help impoverished and disadvantaged groups of farmers and artisans.  As the movement grew and unified, a certification system was developed with standards that any large importer could choose to follow in order to also sell certified fair trade.

Good theory.  But in practice, certification bodies based in the States and Europe deciding what is “fair” for farmers around the world in many different economies not only sounds like a nightmare, but is also a very top-down structure for a product labelled “fair”.  The  Fair Trade certifying body establishes an internationally recognized minimum price based on the cost of production that is applied to the sale of that crop wherever it is sold in the world.  The full minimum price needs to reach the farmer.  So if there are any middlemen or middleagencies involved, they add their cut on top of the fair trade minimum.

The farmers involvement (the part the makes it not so entirely top down) comes with the social premium.  The social premium, set at an additional amount per pound, is intended to be invested by the farming community in long-term social or development projects that benefit the whole community.  Some examples are building schools or roads, giving scholarships, and creating community revolving loans funds.  Because the money is intended for the community, the farmers need to form a social structure – a cooperative or marketing group – to manage the funds.  Often those organizations are run by representatives of the communities involved, so that the ultimate decision for how to spend the social premium is made by a select group and not every single farmer individually.

Hence, one offhand comment by a Fair Trade certifier in the sesame farming community in Achuapa, Nicaragua and a group of angry Fair Trade farmers come knocking on the cooperative doors.

“The social premium is yours to spend!  You decide how you want it to be spent.” was the comment made to the organic, fair trade certified sesame farmers while visiting their farms.

Empower those farmers!  Ensure $0.10 extra per pound for social projects (the social premium for sesame) and then make sure they know they have the autonomy to choose how to spend it!

Problem is, when you tell individual farmers who may be struggling to send their kids to school, whose roofs may be collapsing over their heads, who may have to choose between buying clothes, farm equipment, or medicine for their ailing mother that they choose how to spend money they say, “ok, put it in my pocket.  I’ll spend it.”

The inadequacy of verbal communication.  You (the cooperative of farmers) was said, and you (the individual farmer) was heard.  The fine print on the certification requirements wasn’t enough to quiet them down, clearly that doesn’t stand against what the certifier said in person at their farm!  Once anyone decides that money is rightfully theirs, it’s an upstream battle convincing them otherwise.

Now a letter will be written to the certifiers, requesting a representative to come to a meeting with the farmers.  Meetings will be held, time and money will be spent, and eventually the issue will be resolved and a new fund will be created from this years social premium.  The farmers may or may not leave feeling cheated by a system that was created in part by their colleagues to empower them, and may or may not end up pulling out of a successful cooperative that has become a leader in the small farmer movement in Nicaragua.

The weakness of an international certification system is revealed.  A system originally developed horizontally between buyers and producers who had a shared vision is now a top-down imposed set of standards regulated by outsiders.  If the social premium funds are distributed individually the whole cooperative system of thousands of Nicaraguan sesame farmers – not just the group of 20 complaining sesame farmers – risk losing Fair Trade certification, and the certainty of a higher price.  This is the cooperative who piloted fair trade sesame and set the standards by which sesame around the world is certified Fair Trade, and yet now the farmers are divided over the Fairness of those standards.

What is Fair here? Some of these farmers already owe money to the cooperative and wouldn’t be eligible for a loan from a revolving fund.  Some don’t have school-age children to benefit from scholarships.  Ask them what community project they would support and they won’t come up with one single one that will benefit every single farmer directly.  So the easiest thing is to divide all the money up ten cents here ten cents there.  But is that Fair either?  Would the social impact of that money be the same divided up amongst everyone?  Or would it just disappear in the daily purchase of food or weekend beer at the bar?

This is real.  This is the ebb and flow of an international community created around trade and social ideals that are hard to pin down.   There are tough decisions and struggles behind the angelic face of the indigenous child on the package of your fair trade food.