CEU eTD Collection A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE DEGREE MASTER INTERNATIONAL RELATIONS AND EUROPEAN STUDIES DEPARTMENT LIMITS TO FAIR TO LIMITS TRADE–AN ANTICIPATEDDIALOG OF ARTSINTERNATIONALIN RELATIONS STUDIES AND EUROPEAN SUPERVISOR: PROFESSOR THOMAS FETZER THOMAS SUPERVISOR: PROFESSOR CENTRAL CENTRAL UNIVERSITY EUROPEAN BUDAPEST, HUNGARY ESZTER FÜGEDI 14022 WORDS 4 JUNE2009 BY CEU eTD Collection In contrast, radicals arehighly critical functioning currentthe of of Fairthe Trade network. issues. managerial products’ with increase areconcerned Fairtrade aim share, therefore marketto Reformists organizationsFLOFair arethe right that. for and Trade and the network arguethat In unjust.view,their beneedpractices current trading the improved and to rules and regulated, influenced byliberal andthought donotbelieve that capitalistthe is world order inherently historic of maintenancethe ATOs the advocate beliefs are Reformisttheir Marxist network. based on Radicals, issues. of concrete assessment the determine assumptions ideological that along the value chain,such as certification,production, pricing andretailing, paper this shows a divisionshelves led into the Fair Trademovement. Through discussion the issuesmajorof The inclusioninto Fairthe of corporations Tradeand supermarket the move network towards Abstract i CEU eTD Collection Obviously, all remaining mistakes are mine. amiksüteményekért, nélkül soha nem volnaértem avégére. és afanasztikus ebédekért köszönet biztatásáért, külön Anyukámnak atürelméért, Valamint language. English of mysteries the me through leading for Bellers Robin to thanks intellectual andencouragement, allthe andenergytime heon guiding spent me.Myspecial IwouldFirst and foremost like my thankto supervisor, Thomas forfeedback, his Fetzer detailed Acknowledgements i CEU eTD Collection ilorpy...... 52 Bibliography Appendix 5 – Price Setting ...... 51 procedure in FLO Appendix 4 – 10 Principles ...... 50 of Fair Trade Appendix 3 – Coffee prices in ...... 49 a historic perspective Appendix 2 – Most Recent FLO graphs...... 48 Appendix 1– Timeline of Fair ...... 47 Trade history ...... 45 Conclusions Chapter 3: Concrete issues from different perspectives...... 29 Chapter 2: The ...... 19 identity dilemma Chapter 1: Setting the context...... 10 ...... 1 Introduction List of abbreviations...... iv iii Table ...... of contents ii Acknowledgements...... i ...... Abstract Retailing...... 39 Pricing...... 36 ...... 31 Certification The production process...... 29 The future of Fair Trade?...... 23 The history of Fair ...... 22 Trade? The Fair Trade debate in the broader global political ...... 19 economy debate How the Fair Trade network functions...... 11 Historical Background...... 10 Reformist view...... 26 Radical view...... 23 Reformists based on liberal ideology...... 21 Radicals based on critical thought...... 19 Retailing...... 18 Pricing...... 17 ...... 14 Certification Production...... 13 Fair Trade value chains...... 12 Table ofcontents i CEU eTD Collection WFTO NEWS! NAP FAT I FTO FLO FINE EFTA CLAC ATO AFN World Fair Trade Organization(previously IFAT) Network of European World –formedin Shops 1994 Network of Asian Producers for Federation International Alternative Tradein –formed 1989 Fair TradeOrganization Mark Fair Trade in Germany Organization,Bonn, headquartered umbrella network of FLO, IFAT, NEWS!, and EFTA – established in 1998 FairEuropean Trade in –formedAssociation 1990 Caribbean the and America Latin Fairtrade of Coordination TradingAlternative Organization African Fairtrade Network List of abbreviations i CEU eTD Collection the movementis not to politicize the economic sphere, but to combineof aim the However, consumerism influence. with collective gain to choices individual unite to aims it that, achieve to and setting, market the in preferences political interpret to aims movement the Therefore, 2 1 year-to-year increase.” a47% approximately worldwide, €2.3 billion to sales amounted certified Fairtrade years.fivelast2007, In in year the average40% per of 4 3 unite people, issues that concrete on focused are rather they based, identity or necessarily class are not movements social market. through the political influencethe sphere over indirect gaining at aim movements social new contrast, In power. state appropriating at aimed movement, labour the example, for movements, social Classical movements. social 'old' from be distinguished clearly can such as and movement, social new of type is a This discussion. for topic relevant and interesting an both it makes which spreading, intensively been has consumerism political Lately, this commodification trend. and hasemerged consumerism political politics of asaresponse to the caused has capitalism of situation hegemonic the and democracy with disenchantment some, of wealth growing the globalization, Expanding consumerism. political movement: in creation 1940s. However,the today Fair Tradebe partof new to awider isconsidered social forms sinceits Trade different has history upmany and taken a complex has through evolved part of which important market, makesthe ittopic research.Fair for an interesting andrelevant role mobilization and signaling,” Consumer Policy Review Boris Holzer, “Political consumerism betweenindividual choice and collective action: social movements,See appendix 2, Fairtrade Labelling Organizations International (FLO). in itssales,“onan Fair Tradeyears, growth In anunprecedented past the haswitnessed Holzer, 406. Holzer, ofconsumerism,” ethics political “The Malpass, and Alice Clarke Cloke Paul Barnett, Clive Nick 15,no. 2 (2008), 46. 3 “Political consumerism means doing politics doing means consumerism “Political International Journal of Consumer Studies Introduction 1 30 (2006), 409. http://www.fairtrade.net/ 1 Fairan become Trade has 2 At the same time, new time, same the At through the market.” the 4 CEU eTD Collection stability stability and partnership. promote to in order partners, trading between the andmaintain ties create to movement the into a well-integrated global network. Originally, ATOs were based on the belief that the that belief the on based ATOs Originally, were network. global well-integrated a into producers. as The movementstarted sporadic initiatives individual inhas grown the 1940s,and the of benefits the on focuses but retailers, and middlemen the for profit-generation on not mission-driven business that aims toestablish an alternative trading system, in which the focus is in The political consumerism. ATOsa key component become ismovement an NGO-based, buildand trust a long lasting relationship between its trading partners. Trade from these social movements. Fair distinguish to important is it however, consumerism; political of types other the to compared and currency.national local local using products, purchasingorganic, or Fair Trade is often labeling setcriteria. of numerical as global inequality,trade rulesinto justicea specific, orsocial –arehardtotranslate unjust on–such areconcentrated movements these issues that abstract the remember that to important 7 6 5 production standards ofits products,themain isfocus on termsthe of trade. services. financial choosing or or boycotting growingtypes of ownproduce, products, others, specific one's motivations. ideological 11 10 9 For example, Barrientos-Smith,8 Witkowski, Bacon. orientation?” Development,” Convergence?” Growing out of the Alternative Trading Organizations (ATOs) network, Fair Trade has Trade, Fair trade, ethical include consumerism political of forms well-known most The Mikael Klintman, “Ambiguous framings of political consumerism: means or end, product or process or product end, or means consumerism: ofpolitical framings “Ambiguous Klintman, Mikael 47. Malpass, and Clarke Barnett, Clive 407. Holzer, Barrientos –Smith, 193. and Globalization for System An Alternative Marketing: Trade “Fair Witkowski, H. Terrence Towards Moves Are There Trade: Ethical and Trade “Fair Smith, Sally and Barrientos Stephanie International Journal of Consumer Studies Journalof Marketing Sustainable Development 6 However, often the tools of political consumerism are oversimplifying. It is 5 11 Political consumerism can take many forms, which include certain include which forms, many take can consumerism Political 7 (Fall 2005), 25. 13(2005), 191. 8 Even though Fair Trade is also concerned about the about concerned also is Trade Fair though Even 2 30 (2006), 428. 10 It is an integral part of 9 Fair Trade aims to CEU eTD Collection Fair Trade is also an alternative form asFair by form mainstream Fair of set is Tradetrade Tradenot the an prices are also alternative Fairmovement, gender Trade equality, andprotection. promotes human environmental rights movement, an alternative form of trade, and a development intervention.” a development and trade, of form alternative an movement, of of international conventional trade for awarenessraisingandincampaigning changes in the and supportingrules practice producers, in Fairespecially Trade South. the engaged inbacked by are Organizations, actively consumers, – andworkers marginalized of, producers rights andsecuring the trading to, conditions better by offering tosustainablecontributes development It international in equity seeks trade. greater definition: 13 14 12 inOctober 2001byFINE. wasadopted became universally accepted, but only thefirstinitiated labelsforin certification 1988. The definition Fairof Trade, which labelinguniversal in system 2001.The Fair Trade movement 1940s, the hasbeen evolving since Trade movement, which is focus the of paper.this FLO wasfounded in1997,and established the Stiglitz Joseph promotion morejust rules.of trade The hasterm been widely used since the early 2000s when and of terms trade the global about in discussions is used fairgenerally Theterm trade Fairtrade. capitalistis system unfair, and couldnot be reformed,needed but to be challenged. 15 (FLO), International Organizations Labeling Fairtrade the by run system labeling and certification the to refers Fairtrade contrast, In development. 17 16 Trade: Quality, Market and Conventions,” Development International, 2009. Development in Practice The definition combines the three major aspects of asocial once “is Fair of Trade.at It major aspects three the combines The definition Fair Trade is a trading partnership, based on dialogue, transparency and respect, that respect, and transparency based ondialogue, Fair Trade partnership, is atrading Fairtrade Labelling Organizations International (FLO). FINE is the umbrella organization of FLO, IFAT, “Fair of FLO, Renard, EFTA organization and NEWS!, – Marie-Christine umbrella the is FINE Charlton, Andrew and Stiglitz, E. Joseph see example, For The term Fair fair and befrom Trade trade is andneedsto distinguished deceptive A Charterof Fair Trade Principles.World Fair Trade Organization Fairtrade and Labelling Organizations Witkowski, 22. Elisabeth Paul, “Evaluating Fair Trade as a Development Project: Methodological Considerations,” , ( 12 Oxford: Oxford University Press, 2007) started to argue globalization started to that beholdand currenttrading rules Southern the 15, no. 2 (2005), 15, no. 2 134. . 15 Journal of Rural Studies 3 http://www.fairtrade.net/ 13 Fair Trade for All: How Trade CanPromote and as such is part of the wider Fair 19 (2003), 90-91. 14 According to this to According 16 As a social 17 CEU eTD Collection 21 20 18 on aswell as group, ofaproducer characteristics and social alsobutcultural on circumstances, However, in is successful network the basedparticipation only on not and economic political argue Fairthat material forTrade producers. benefits has inboth and non-material resulted as much as they receive in aid.” developing twice “cost countries by imposed traderestrictions that estimated Northern is It aid'. not 'trade through situation their improve to producers Southern enable to aims which Finally, project, Fair developments. Trade community isadevelopment for aside be set a Fair Furthermore, producers. Tradethe is intoincorporated price, Premium the also whichisto world but market, byFLO, and are established in order to provide living aminimum standardfor 22 19 infrastructural benefits gainedparticipation through in Fairthe Trade network. human impacts couldcapital beimproved. the however, network, inthe participate that farmers those for standards living and incomes Fairin higher found Trade resulted that Costantino Marco and Becchetti Leonardo example, success story and as Mosta literature onFairbeen too. of the growing Tradein is Fairengaged Tradeassessing development as a project and looks at case studies system. neo-liberal the trading characterize that and unequal the trade relationships to show its impacts.world to spread issuesrelated ofthe isit awareness essential to consumers, success dependon For also worldneo-liberal but development, dominantchallenges the order. only not promotes addition, Fair Trade aims to raise consumer awareness. raise consumer Fair to Trade addition, aims Analysis on Kenyan Farmers,” Journal of Strategic Marketing Capacity via Global Networks, Leonardo Becchetti and Marco Constantino, “The Effects of Fair Trade on Affiliated Producers: An Impact An Producers: on Affiliated Trade Fair of Effects “The Constantino, Marco and Becchetti Leonardo Witkowski, 24. Len Tiu Wright and Simon Heaton, “Fair Trade Marketing: An Exploration through Qualitative Research,” Paul, 134. Laura T. Raynolds,Douglas Murray Peterand Leigh Taylor,“Fair Trade Coffee: Producer Building has movement the to paid attention growth, constant achieving been has Trade Fair As 14 (2006), 412. World Development Journal of International Development 18 Therefore, by trying to create an alternative market, Fair Trademarket, an alternative create by to trying Therefore, 21 Elisabeth Paul highlights economic, technical and technical economic, highlights Paul Elisabeth 36 (2008), 839. 4 20 AsFair the and Tradeitsnetwork 16 (2004), 1109. 22 Raynolds et al. 19 In CEU eTD Collection network marks the simultaneous decline of the wider, more radical Fair Trade movement. ethical principles. ethical projects. inprospects alternativemarketmovingestablishing an from and away paternalistic development Fair However,mainstreaming of nature. Trade its the has limited current non-transitional and non-paternalistic itsVanderHofffrom Fair Trade derives of alternativeness the arguesthat Havelaar-founding Francisco VanderHoff Fridell. Renard andGavin Marie-Christine Boersma, degrading of the historical values. The three most important authors on the radical side are: Max they seem to admit. that more concerns schools share two the arguethat will paper this concerns, their of discussion the Third in poverty alleviating to means a as project, a development as Trade Fair see Reformists system. World, thereforetransforming theglobal tradingin system, and believe theviability of an alternative trading aimkeeping the ATOsmarket. They and ofat alternative aim urgefor the creation structure an to in believe increaseRadicals Trade. Fair pursuing for motivation in their is reformists and radicals between difference main The volumes reformists. and radicals schools: main two into movement the divided of sale.moveshelves.into hasapparently This supermarket move andthe of inclusion corporations However, Fairof Trade, paper.this the be focusof mainstreaming which the will refers Inthis to debate through a detailed 26 Renard (2003), 25 92. 24 Raynolds, Murray and Taylor (2004),23 1118. itscharacteristics. organizational Studies In contrast, reformists look at Fair Trade as a means to development in the global South. The radical side criticize the mainstreaming of Fair leadsit tothe Trade, of andarguethat mainstreaming the criticize side The radical On the side of the increasing literature, there is a growing debate over the mainstreaming is overthe agrowing there debate literature, On increasing of the side the Gavin Fridell, “The Fair Trade Network in Historical Perspective,” Historical in Network Trade Fair “The Fridell, Gavin VanderHoff 58 24 25 (2004), 426. Similarly, argues Renard mainstreaming the that Fair of Tradeleadscompromising to 25 Taking themost radical view,Fridell argues that the growth of the Fair Trade 23 5 Canadian Journal of Development 26 CEU eTD Collection concern the two schools of Fair Trade. By examining the detailed concerns of both and radicals both of concerns detailed the Fair Trade.By examining of schools two the concern issues that to specific then turn debate, economy political global broader into the itand place level ideological atan debate atthe look I First, level. a practical and atheoretical views on their contrast will this I toevaluate Fairaffects order on Trade outlooks problems. andits current In Trade is not only used by reformists and advocates of mainstreaming, but also by ATOs. Fair of FINEdefinition the example, sides. For by are shared two the that recommendations of number inFaira Trade,trends also, and both concern issues that of a number However, there has been a lack of dialogbetween the two schools. At the same, there are actually roads, each cross side offering theirimprovesuggestion movement own to the thenetwork. or information channels. labels,promote cooperatives simplificationthe of of transparency producer andtwo-way they proposal their In confusion. consumer to leads labels trading alternative other and Trade Fair of abundance the that argue who Vihinen Lea and Lee Hyung-Jong by offered is labels 30 (2005), 10. 29 28 27 inimprovements marketing andawareness-raising. system. trading world wider the change awareness and availability. andFerrie offerimproving solutions to Fair Trade'sAt marketshare throughraisingconventional the same time, they believe Forexample,Hira in market. becomeinfluential the player to amore toresolveneeds inorder that Fair Trade will never be literatureable on the reformist side of the debateto is concerned with the practical problems the network share.reform market the increase Therefore, Fair the They aim to Trade products' to the network Business Ethics Therefore, the aim of this paper will be to analyze to what extent ideological background ideological what extent to analyze beto will aim paper this the of Therefore, Fair agree Tradea is that at to seem in Fair literature Trade the Interestingly, authors all NEWS! Network of European Worldshops. 2 5,no. Papers OECD System,” Trading Multilateral the and Trade “Fair Lea Vihinen, Leeand Hyung-Jong Wright –Heaton,416. Mainstream,” the Reaching for Key Challenges Three Trade: “Fair Ferrie, Jared and Hira Anil 63 (2006), 114. 29 27 http://www.worldshops.org/ Len Tiu Wright and Simon Heaton advocate 6 28 Finally, forof simplification the proposals Journal of 30 CEU eTD Collection 32 31 metric tons, 62.209 of a total reached coffee by19%and increased Fairtrade volumes of sales the In2007, issues coffee. regarding most movement, of literatureisconcernedwith thereforethe productof the successful most differences. of these relevance the illustrate solutionsthem to proposed ideological the the reflect differences, because theproblems considered only problems,on will focus I sides of debate, the two the contrast to schools.order In thetwo between differences and similarities ofthe assessments systematic of is alack on Fair Trade,there literature growing most abstract solutions. for advocate andradicals to issues onmanagerial tofocus leading reformists practical concerns, the on impact a significant have The assumptions and beliefs ideological contribution that arguing am I reformist, of my work is that while there is an abundant and coffee farmers benefited directly from Fair from directly coffeeTrade.benefited farmers small centannually. 700.000 organizations andanestimated participated, 256producer 2007, In certified in1988by its Maxthe Havelaarlabel,and hasbeenincreasingsince then sale by 20 per reformists are concerned with different issues, is are concernedwith reformists examineddifferent literature the widely also distributed. recent articles. and mostAs radicals to attention special with in 2000s, the work academic Ihavesecondary literature. focused on literature Asgrowing and thisevolving isfastconstantly these differences be andwill highlighted contrasted. large and on usinghired labour.bananas aretea produced estates, Therefore, whennecessary, specificities thatarenotgeneralizable. Forexample, coffee isgrownby whilesmall producers, certain However,be are there movement candrawn. whole the regarding conclusions general coffee, regarding concern reformist and inradical similarities the byshowing therefore product, Change Ibid.19. ed. Powell, Julia and Stapper Verónica,Jennifer Sueiro, Pérez Iwillis asit focus on the coffee, products, Fairtrade of is range While there a growing In order to investigate both sides and the issues of interest, my interest, on hasfocused of toinvestigateresearch both sides and In order issues the . (Fairtrade Labelling Organizations International, 2008), 10. 31 making it the backbone of Fair Trade. Coffee was first 7 32 As coffee is the most discussed Fairtrade discussed most is the As coffee Annual Report 2007 An Inspiration for CEU eTD Collection characterized by mutual characterized by mutual dependence. modular –in customer's–and to the specifications suppliers produce which relational is – which draws Fair on the of which the Tradeliterature emerged,out newcategories five newthe analysis 34 33 driven. originally distinguished different between two value types of producer-driven chains: buyer-and in byGary was isGereffi, who developed Fair used Tradethe most often literature that analysis globaleconomy. integrated in closely the The areproduced howcommodities of understanding better a enable to developed been has analysis chain value global The analysis. chain value of the network. Furthermore, in order to provide a clear structure, this paper draws on the global data,Ihaveinformation officialmostandup-to-date background alsoaccessedthe the websites studies rural journals beenused.However,and havealso agricultural in be provide ableorder to developmental, to sociological, topic, interdisciplinary rather a is it as Furthermore, journals, suchas The Journal Strategicof theJournal Marketing or Business Ethics. of such as Historical Materialism and the New Left Review have been looked at, as well as business In order to avoid biases, any awide of range journalsjournals, have been used. Radical,leftist reformist point of view. Using the same four stages of the value chain, this section will show the show will section this chain, value the of stages four same the Using view. of point reformist issues Fair that 3will Trade the concrete is radical the Chapter examine both facingfrom and of Fair future history and onthe Trade.views their thencontrasting political debate, economy 2willdiscussed.schools, Chapter examine thefirst two relating global them broader the to Movingnetwork. along the value certification,chain, production, pricing andretailing will be A of Fairthe currentstructure the by of history bewill Tradebrief a discussion followed International Political Economy Analysis from a ValuePerspective,” from Chain Analysis 33 For details see Gary Gereffi and Timothy Sturgeon, “The governance of global value chains,” value ofglobal governance “The Sturgeon, and Timothy Gereffi seeGary details For Fordetails see Darryl Reed, “What do Corporations have to do withFair Trade? Positive and Normative The thesis will be structured as follows. First, an introduction to Fair Trade will be given. Later, this based adistinction approach with was combined on organizing In principles. 12, (2005),no. 1 83. 34 Journal of Business Ethics 8 86 (2009), 7. Review of CEU eTD Collection assumptions determine the focus of the two schools and their outlook schools focus of future and of two determineassumptions on the the Fair the their outlook Trade. Finally, between differences approaches. the andsimilarities itideological be will that concluded 9 CEU eTD Collection handicraftsby made Chinese refugees in 1950s. thelate into selling the Tengrew Oxfam started shops Europe, chain.)Thousand VillagesIn store mushrooming of mushrooming of ATOs, first the and World wasin opened Shop 1969. embroidery Ruth Edna that Byler, selling aMennonite started inher house. network of loose a through andATOs. Europe Fairof Thestory PuertoRican Tradebegan with America North in separately emerged initiatives movement, Trade Fair the of period early this the alternative market that was concentrated on handicrafts before. onhandicrafts was concentrated that market alternative the initiatives, in such as Tanzania and Nicaragua. development more state-led with solidarity Trade showingpolitical for became a channel Fair rules, trading international unfair the of critical grew initiatives As development movement. the of aspect a political of evolution the to led economy political broader in the changes time, andNortherntraders. At sameproducers the develop between Southern to started Partnership was notcontrolled. notion 'helping products andof focus the quality of the poor' wason the In mainly periodthis handicraftsChristian-based NGOssold developing from countries. the The was early the characterizedlike by network selling’,more ‘goodwill 1970s, the aform of charity. 40 35 'solidarity 'mutually beneficialtrade,' trade' and 'trading partnerships.' Background Historical 39 38 37 36 Practice http://www.worldshops.org/ 10, no. 2 (2000), 10, no. 2 167. From 1980sFairFrom until late 1970s the Tradethe was characterized by trade’. ‘solidarity Reed, 4. Anne Tallontire, “Partnerships inFair Trade: Reflections from aCase Study of Cafédirect.” selling,' 'goodwill phases: main four into distinguished often is Trade Fair of history The Fora detailed timeline,see appendix 1, NEWS! Network of European Worldshops. Ibid. Witkowski, 22. Reed, 4. Chapter 1:Setting thecontext 10 40 In the 1980s agricultural products alsoentered products 1980sagricultural Inthe 38 and'60sThe '50s the witnessed 39 35 From From mid-1950sthe to 37 (This initiative later initiative (This Development in 36 In CEU eTD Collection Through these organizations, Fairtrade reaches out to around 7.5 million people – farmers, million around 7.5 – people to out Fairtrade reaches these Through organizations, Currently, organizations producer continents. are632certified in58countriesof three there in processors andimporters, retailersdeveloping the mostly world. developed the the world, –in workers the and plantation cooperatives intounionized organizedfarmers andartisans functions network Trade Fair the How notions of of respect notions relationship from its and paternalistic origins (ie.thebasing notion ‘helping of onthe poor’), the way, the importanceis asequal. partnership inremoving partner of trading The the while treating 45 44 43 42 41 Trade seen are movement as 'partners'. changing relationshipwith both consumers andNow, producers. all involvedactors with Fairthe period. Fair organizationsTradeinclude to related Most Tradeinfounded to this corporations. were launchinglabels of wasaccompanied bysetting andbroadening standards thescopeof Fair The form trade. of amore regulated became solidarity, but for showing longer avehicle was no focus and anincreasing beneficial on consumer.the characterized bymutually trade symbolizing but structure.creating The some confusion network still loose the 1990swas label, in introduced In MaxHavelaar was labelsEurope. followingthe decade other six emerged, something” Ask Oxford. Ask something” http://www.askoxford.com/ The basic trading structure ofFair organizations structure The basictrading Trade the –small producer includes For the growing number of certified producers see Appendix 2 see Appendix producers of certified number growing the For Dictionary definition fortrust is: “firm belief in the reliability,Oxford. truth,Ask ability,of others” orstrength orrights of someonefeelings the or for regard “due is: respects for definition Dictionary Oxfor Tallontire, 168. Tallontire, 168. refersthe to Finally,partnerships. Partnership by trading characterized 2000sare the The inturning point history the of Fair Trade camein 1988 when firstthe Fair Trade 43 and trust. http://www.askoxford.com/ 44 42 Partners need to fulfill their own roles in a responsible 11 41 Fair Trade 45 CEU eTD Collection the chain. the Fair Trade from products ATOs,alter of donot relational characteristic therefore governance the this valuechain wasenabled by launchingthe label. of Max the Havelaar Corporations purchase solidarity and trust. and of notions the personal contacts frequent on based governance: by relational characterized often switch between producers. The most well-known FLO licensee is FLOlicensee well-known Starbucks. The most producers. between often switch they requirements quality Basedon long-term relationships. and keen partnership not on andare FLO basic fulfillcriteria Corporations the only relationship. an active the intrading role defining licensing retailing. and influencedThis chain isgreatly interests, bymarket ascorporations take capacity basedbuilding onlong-term relationships. focus chain is onsupporting through Southern profit, technical the assistance and producers Inthis economy aresocial actors. toretailers) (from in all producers which actors participation, 51 50 49 48 47 46 distinguished. Fair Trade valuechains retailers. certified andworkers theirfamilies. products are Fairtrade soldin 50 countries by more than 1900 edited by Laura T. Raynolds,Douglas L Murray Johnand Wilkinson (New York:Routledge, 2007), 109 Brand Fruit and Chocolate in UK supermarkets,” in UK supermarkets,” in Chocolate and Fruit Brand Secondly, there is a value chain that involves corporations as retailers. Theemergence of asretailers. corporations involves Secondly, chainthat is value a there Thirdly, alsoparticipate aslicensees, corporations which means they in that both part take Finally, is there value the is chain involving by plantations that fully characterized Ibid.12. Reed, 10. Stephanie Barrientos and Sally Smith, .“Mainstreaming Fair Trade in Global Production Networks:OwnIbid. Reed, 8. Fairtrade Labelling Organizations International (FLO). Within Fair the Tradefourmovement be different ofvaluetypes chainscan 50 47 Firstly, there is the historic ATOs network, a value chain without corporate without chain a value ATOsnetwork, historic the is there Firstly, 46 49 12 Fair Trade– The challenges oftransforming globalization http://www.fairtrade.net/ 48 Furthermore, this value chain is chain value this Furthermore, 51 , CEU eTD Collection for example,products. in the case Fairshareconventional therefore Tradeinelastic, market against gainawider of can only coffee and beans. Secondly, for aredemand coffee prices many commodities world market primary banana – which prescribes the power relations and makes the makes marketworldprice generallyvolatile. means andpests.This conditions weather also volumes arevolatile, that annual which production suchas production, isagricultural arise from thatrisks of awide there range of First, difficulties. not participate historically, such as banana and tea. did in which smallproducers movement. sectors infirst, agricultural At wereplantations these Fair in participate Tradethe to andallowed been certified also have numberplantations of responsible for setting the price received at the farm settinglevel. for farm price the responsible received atthe arealso Cooperatives andtransportation. knowledge such assharing members, totheirservices 54 53 52 exporting. as aswell processing sometimes collection, arecooperatives organizedsecond and into thirdlevel federations thatare responsible product for intoprimary thesecooperatives productioncoordinate that transportation.turn, primary and In organizedcooperatives. into Cooperatives different levels.exist on producersareorganized First, Production participation fromcorporate – retailing. production to 57 56 55 Nicaragua,” All agricultural Fair Trade products are primary commodities that carry inherentFair carry certain areprimaryAll agricultural that Tradecommodities products Karla Utting-Chamorro, “Does Fair Trade Make a Difference? The Case of Small Coffee Producers in Producers Coffee ofSmall Case The Difference? a Make Trade “Does Fair Utting-Chamorro, Karla Reed, 20. Ibid.15. Originally, Fair all Trade needed producers tobe small (artisans producers farmers) and Hira – Ferrie. 112. Hira – Ferrie, 112. Reed, 14. 57 The majorthird issue follows from oligopsonicthe nature of processingthe markets – Development in Practice 15, no. 3/4(2005), 589. 13 56 55 For example,For in adrought Brazil candouble 52 53 Cooperatives offer a wide range of 54 Since 1980s,anincreasing the late CEU eTD Collection 59 61 Available at: 60 58 environmentally friendly measures. fulfillThe producers who requirements setbyFLOthe are buyingis and selling Standards againstFairtrade certified for Trade.” Fairtrade Standardsenvironmental aspects of for againstproduction are certified and Producers and economic social, where system certification isaproduct Fairtrade “Certified process. FLO-CERT, standards. the with compliance certification is the for byFLO, responsible owned monitoring Fair for Trade all and also andpartners' traders, producers accreditation of Certification sell up to 60 per cent of their coffee to conventional markets. still Fair Trademarkets, inboth organic and thatparticipate cooperatives example, Nicaraguan spreadof the Fairthe Trade small network, continue sell differentproducers to to markets. For Fair In Trade circumstances, survival. Despite these meansmarginalizes producers. and stability discrimination in respect of andoccupation.” of employment in respect discrimination compulsory labour; (c) effectivethe abolition of childlabour; and elimination (d)the of recognition of the right to collective bargaining; (b) the elimination of all forms of forced or effective the and freedom “(a)of association to refer ILOcriteria Thebasic criteria. democratic for certification until packagingthe andlabeling a product. of to decide needbe unionized and plantation to workers represented, equally and democratically represented on how to small cooperativesbeproducer need run to spendby General a Assembly,in which all families are the social premium. Small-Scale Farmer Vulnerability Northernin Nicaragua?” FLO-CERT. Fridell (2004), 420. ILO DeclarationonFundamental Principles and Rights at Work 1998. International LabourOrganization. Christopher Bacon, “Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Aside from tradingthe labelingindependent chain, initiatives forare responsible the FLO standards for producers incorporate all the basic ILO standards, while adding all while basicILOstandards, incorporate the producers for FLO standards http://www.ilo.org/public/english/standards/relm/ilc/ilc86/com-dtxt.htm http://www.flo-cert.net/flo-cert/index.php 14 World Development 61 Furthermore, producers need to pursue need producers to Furthermore, 60 58 The democratic criteria adds that adds criteria The democratic 59 33, 3 no. (2005), 505. FLO-CERT is responsible FLO-CERT CEU eTD Collection 64 63 62 certified. be has to exists alternative for which a Fairtrade ingredients andall certified, must beFairtrade dry weight 20 percentof product's the least50 percentof volume atthe or composite products, labeling system set up for composite products, wine. honey, is herbs,fresh sugar,a fruit, There and also tea, rice,spices flowers, juices, cotton, for example chocolate or coffee, cocoa, banana, energy are: these certified, products agricultural of types thirteen There are bars. In case of dominate Fair the Trademarket. products agricultural of which out commodities, only certifies license. initiatives labeling national North orthe marked theFLOFairtrade Fair by American labels, Trade whichthe Certified glass and paperproducts, music and instruments, clothing. sustainable production sustainable practices.” production enable“planning and and that 60 percentonrequest sign long-term contracts advance upto pay minimum Fair andthe price in Trade theproduct), vary according to Premium (which orexporting Fairthe organizations, directly pay producer Trade from theircertified products America and the Caribbean (CLAC) that represent small-scale producers, workers and other workers producers, small-scale represent that (CLAC) Caribbean the America and in Latin in – Africaand Networks (AFN), Asia(NAP), Producers three countries. There are in 23 initiatives labeling national 19 are there Currently certified. FLO-CERT that traders and responsible for certifying and monitoring, while national initiatives in licenseturn producers the that theremeans This andimporters. processors the license they FLOand of founders the were initiatives is a clear division of labour between FLO and the national initiatives. FLO is Fairtrade Labelling Organizations International (FLO). Lee – Vihinen, 4. Fairtrade Labelling Organizations International (FLO). however,FLO today of handicrafts, with selling the The Fair started Trademovement FLO standards for trade state that companies trading Fairtrade products needpurchasecompanies state products to for trade FLO Fairtrade that trading standards FLO consists ofnational labeling networks. initiatives andproducer National labeling 62 Meanwhile, the trade in handcrafts continues, these currently include sport balls, toys, 64 15 http://www.fairtrade.net/ http://www.fairtrade.net/ 63 CEU eTD Collection those traders are certified who comply with the ten Fair theten Tradecomply are principles. with who certified traders those into participating only big that were inthenetwork. market-driven business pressured those from Traders Fair mission-driven are that organizations those out separate is to label (now WFTO) launched ownlabel, its Fair the Trade Organization Mark (FTO). The aim this of FLO is still criticized for only allowing aminority itsposition to producers. forward, consideredin representatives asamajor step FLOisalready producer While, having included been only constantboard since in May 2007duetopressurefrom the producers. the defining the roles and responsibilities of bodiesthese and their supervision. for as aswell Committees, andthe Board the to for nominations is responsible Committee is FLO's for standards. The while finances, responsible Committee Finance the Nominations the reviewing and setting for is responsible Committee Standards The issues. specific for directors. newBoard the and ratify Assembly holds annual meetings decideto onmembership issues, the approve annual accounts, experts. independent and external from three traders certified representatives two from region), each least representative one organizations (at producer the from four representatives labeling initiatives consists from and Board of five the representatives almost 300in CLAC. 72 71 70 68 67 66 65 stakeholders. producer 69 Fair Trade Coffee. Development Report 17. (Food First. Available at: Available First. (Food 17. Report Development Coffee. Trade Fair As a response to the recent inclusion of multinationals in the network, in 2004, IFAT in 2004, network, in the multinationals of inclusion recent the to response a As FLO is governed by a Board of directors, which is elected by the General which elected bytheGeneral is of by Assembly. directors, isFLOa Board governed The See appendix 4 – WFTO. See appendix Holt-Gimenez, Bailey and Sampson, 2. Ibid. ed. Sampson, Devon Bailey,and Ian Holt-Giménez Eric Ibid. Ibid. Ibid. Fairtrade Labelling Organizations International (FLO). 66 65 There are currently 96 certified membersinNAP, 96certified are currently There in 164 AFN and http://www.wfto.com/ 69 Furthermore, FLO has three committees that are responsible 16 http://www.fairtrade.net/ Fair to the Last Drop: The Corporate Challenges to http://www.foodfirst.org/en/node/1794 67 Producer representatives Producer have 72 70 68 TheGeneral 71 Only ) 3. CEU eTD Collection 78 77 76 75 74 73 (see process bureaucratic alengthy and Appendixcommittee through 5). Pricing while inwhile 2007,it October Fair surpassed the Trade minimum price. marketworldcoffee in arevery volatile:prices itlowreached of 2002, a100-year 41 cents/lb, type.product cooperatives Premiums andhiredproducer unions.for Fairtrade workers' each arestandardized way in Premium whichtheFairtrade be is spent to beis decided to in democratically the The development. environmental and economic social, on be spent to is Premium Fairtrade The isinprice. Premium Fairtrade the example,coffee).paid to world-wideFairtrade addition (for in lownetserve asasafety worldprices. case of production andenable Thecosts sustainable price production. mainrole isto of Fairtrade the Fairtrade price set for most Fairtrade products. The aim of the Fairtrade prices is to cover organic differential set by FLO, which is increased to 20 cents/lb. Therefore, the total price to be20 cents/lb. the organic to Therefore, total isincreased price FLO, differential set by which needs to be paid, which is to be spent on pay above that. community5 cents to are expected and social developments. There Trade Fair importers theFairTrade minimum price, price exceeds market if However, world the is also an $1.25/lbfor washed at isset minimum price Arabica, (The Center(The for Economic Research and Graduate Education - Economic Institute, Prague,2009), 4. Fairtrade Labelling Organizations International (FLO). 1 June on increased price minimum Trade Fair The Tomas Konecny and Jan Myslivecek, "Fair Trade - Is It Really Fair?," Holt-Gimenez, Bailey and Sampson, 3. Ibid. Fairtrade Labelling Organizations International (FLO). FLOset by minimum Premiumsare Standards and Fairtrade the prices Fairtrade The aim of the Fairtrade minimum prices is to ensure stability for farmers. For example, For farmers. for stability ensure is to prices minimum Fairtrade the of aim The areapplicable others example, (for banana), pricesarecountry-specific Some Fairtrade 74 78 Above this price, a Fair Trade Premium (10 cent s/lb) cent (10 Premium Trade Fair a price, this Above 17 st , 2008. http://www.fairtrade.net/ http://www.fairtrade.net/ 77 regardless of the world market price. market world the of regardless CERGE-EI Working Papers 76 Currently, Fairtrade the 73 Basically,is a there wp367, 75 CEU eTD Collection Villages and 155retail United throughout the operates States Canada.shops cafés, cafeteria and companies, where the Fairtrade products can be consumed on on spot. the canbeproducts consumed Fairtrade where the and companies, cafeteria cafés, numberan increasing of ATOsmarkets”, tosell“out-of-home suchas havestarted restaurant, Finally, contact. personal on relationships trading their base generally and systems, certification limited number of ATOs that do not conform than 3000 World in Shops to eleven countries.European the FLO labeling. more of is comprised Network TheNEWS! WFTO. of members are others the majority of the These ATOs use theirmore hundred than two such ATOsownin The elevenEurope. largest founded of thenetwork EFTA, ATOs accept the FINE ATOsdefinition only sell Fair that Trade which products.These includecertified Fairtrade also products, of Fair Trade and certification by FLO. Currently, there are Fair Trade33 in Consumer Countries, 83 82 81 80 79 Fairthe Tradenetwork. parallel to network trading trading own havetheir These aslicensees. corporations innetwork the participate that Secondly, corporations are there partinnetwork onlytake asretailers. Fair the purchase They Trade from products ATOs. Retailing for Fair producers the paid Trade to organic is coffee 151cents/lb. http://www.tenthousandvillages.com/ Jean-Marie Krier, Fair Trade 2007: New Facts and Figures from an ongoing Success Story. A Report on more. and Gifts, Decor, Home Jewelry, of Handmade Villages. A Retailer TenFair Trade Thousand NEWS! Network of European Worldshops. Reed-Cromwell152 Ibid. Currently, there arefour types Fairof Trade retailers.First, there are corporations that Dutch Association of Worldshops (2008), 27 http://www.worldshops.org/ 18 81 In North In North Ten America, Thousand 79 82 80 Finally, there are a Thirdly,are there 83 CEU eTD Collection the capitalistmode of production is based on exploitation, as profitis generated from the unpaid labourto their power bourgeoisiethe for awage, iswhich argue below value.Marxists its that their relations to the means of and andtheclass interests between bourgeoisie. the workers struggle in The classesaredefined production – the bourgeoisie ownsnew them,theories while the inworkers the field.sell As Marxists, they believe thought oncritical based Radicals that the capitalist world is based on class 86 Ibid. 86 18 85 Robert O’Brien 85 and Marc Williams, Barrientos – 84 Smith, 193. debate economy global political broader in side the critical tothe Fairthe correspond Trade debate their ideological beliefs and basic assumptions regarding the capitalists system. The radicals in debate economy political global broader the in debate Trade Fair The down to their understanding Fair of Trade,its history andits future. narrowing then and actors, different of role the and system capitalist the on views their on based be contrasted will approaches Thedifferent debate. economy global political broader the into beplaced Fair Trade will the assumptions, debate ideological the underlying toinvestigate order distributionalthe hasstructure a division led to amongst Fair Trade academics and activists. In a wider rangeof and toconsumers. market mainstream access gain the York: Palgrave Macmillian, 2007), 21. 85 Radicals are inherently Marxists, and have been influenced by the constantly emerging constantly the by influenced been have and Marxists, inherently are Radicals The different views of the two schools on the role and aim of Fair Trade can be related to labelhas Fair Fairtrade enabled into enter of TradeThe universaladoption the to products , while the reformist side resembles the liberals of the broader debate. Chapter 2: The identity dilemma Global Political Economy – Evolution and Dynamics. 19 84 However, this shift in shift this However, 86 2 nd edition. (New CEU eTD Collection 92 For background see Immanuel Wallerstein see Immanuel Forbackground 92 91 Ibid. 90 Ibid. 89 Ibid. Fridell (2004), 88 415. 93 For background 93 see Michel Foucault, 87 For selected works by Marx and Engels, see for example Robert C Robert ed. Tucker, example see for Engels, and by Marx works selected For 87 labour. 94 For background see94 Antonio Gramsci, believe that in order to improve the situation of small farmers in the global South, it is necessary it South, global the in farmers small of situation the improve to in order that believe forvalues, andtheframework thinking. culturally In subordinated. his view, bourgeoisie the ina were defineposition to culture and also but economically not were workers system, in capitalist the arguedthat and hegemony countries. In his periphery view, dependent exploits the core the the world intocore, semi-periphery and periphery countries, based on a global division of labour. theory, Wallerstein of the countries theory,system in hecategorized his world articulated which influenced by of Immanuel work the Wallerstein and Gramsci.Antonio on dependency Drawing advantage,” notion comparative of Ricardian the “challenged Marx, Foucault's discussion of discourse and the power-knowledge paradigm, power-knowledge andthe discourse of Foucault's discussion order.world capitalist forthe from de-linking advocated and markets” World First a state of on dependence reducedto nations were technology, for countries capital, underdevelopmentof Third World First countries bythe World. Intheirview, “Third World and exploitation the to led system capitalist global the that argued theorists Dependency dependency influenced in theorists also theFair 1960sand1970s,who the Trade movement. income inelasticity primary of goods. manufacturedNorthern countries export was goods “unequalan exchange” dueto the relative maintenance of the trading system, in which Southern countries export primary goods and Edition. (New York: W.W.Norton &Co,1978) Hoare and Geoffrey Noweel Smith, (London: Lawrence & Wishart, 1971) the European World Economy intheSixteenth Century 87 In the 1950s the Fair Trade radicals were influenced by Raul Prebisch, who, drawing on 90 and therefore were restricted in their development. Dependency theorist Dependency intheir development. restricted were and therefore The History of Sexuality, Selections from the Prison Notebooks The Modern World System: Capitalist Agriculture and the Origins of 89 This idea of idea “unequal by This of exchange” wastaken up 94 Influenced by these schools, radical Fair Traders radical by schools, these Influenced 20 . (New York: Academic Press,1974) (Harmondsworth:Penguin, 1981) 91 Inthe1980sFairTrade were radicals , Edited and translated by Quintin translated and , Edited The Marx-Engels Reader 92 88 93 Gramsci, on drawing and the arguedthat expanded the idea of , 2 nd CEU eTD Collection Cooperative Movement launched a campaign to raise funds for the establishment of of funds establishment launched fora self- the acampaign toraise Cooperative Movement long-termshifted from aiddevelopment Forexample, to development. Oxfam and British the history involvementof in Inprojects. development 1960s thefocus of cooperative campaigning thedecades. throughout thought phrase of radical thecatch discourse’ been has the‘partnership that to receptive more also are reformists measures, interactive more to poor’ the ‘helping beyond moved has discourse development when area, current the In label. Havelaar Max the of creation the away from the state towards NGOs, the Fair amove by characterized 1980swere the example, when For discourse. general development Trade network also entered into a new andproducers tofunctionphase along-term as project, developmentthey have beeninfluenced by the with trading system. see consumers (individuals) Fairthe prescribe andagent to rules. Trade the FLOliberals, right asthe As network reformists as rational actors however, andisit market inherently see unjust; beregulated, needs argue the believe that to that who have the power to transform the imperfect 96 O'Brien – Williams,96 18. Holt-Gimenez, Bailey 95 and Sampson, 19. thestate. of role limited for a advocate therefore cooperation, of sphere as the market seethe reformists movements. liberals, As NGO and cooperative Reformists basedon liberal ideology ATOsfrom incapitalistorder tochangethecurrent outside. network order system. whole capitalist the to replace Finally, the reformist network of Fair Trade also draws on the cooperative movement’s cooperative the on draws also Trade Fair of network reformist the Finally, Fair aim the is TradeSecondly,of that empower Southern believe to reformists as On the side of the debate, reformists have been influenced by liberal thought, the thought, liberal by influenced been have reformists debate, the of side the On 95 Therefore, radicals believe in the maintenance of the of maintenance in the believe radicals Therefore, 21 96 Therefore, reformists do not CEU eTD Collection primary commodity prices. primary commodity According to network. Fridell, the of and movement the of history the between distinguishes he also the Therefore, movement began in the inter-war order toreachawiderinof of system neo-liberal the becomeconsumers. range trading part periodhas network Trade Fair the contrast, withIn orthodoxy. neo-liberal the to the market alternative attemptsan to control and lasted until the creation of the Max Havelaar label in 1988. This period was characterized by characterized in was label 1988.This period Max Havelaar the creation lastedof and until the divided intotwo main parts. The first phase of Fairthe Trade network started with the first ATOs Tradeand network. the movement view on the history of Fair Trade. On the radicalTrade? of Fair history The side, Fridell, distinguishes arenecessary, for tradingrelationships. FLOas the modifications criteria such between the slight only view, in their Fairthat, achieve to and face' human with 'capitalism for potential to reform trading practices.as those provided by Fairtrade. Reformists see the consumersReformists as the key actor who has the power do not aimcurrent shortcomings of internationalthe market canbe managed through new tradingto rules, such change the whole world order, but see a 101 100 Holt-Gimenez, Bailey 99 and Sampson, 18. Ibid. 98 13. relationships. anmovement towards turned and ethical approach international reestablished cooperative 7 Matthew Anderson (forthcoming),97 “Cost of Cup of Tea”: Fair Trade and the British Co-operative Movement,c. in Botswana. cooperative consumer sufficient Lawrence Black and Nicole Robertson (Manchester: Manchester Univesity Press, 2009), 12. 2009), Press, Univesity Manchester (Manchester: Robertson Nicole and Black Lawrence 1960-2000,” in Based on their different ideological backgrounds, radicals and reformists takeadifferent reformists radicals and backgrounds, ideological different on Basedtheir Influenced by liberal NGOandthought, history, cooperative believe reformists thatthe Fridell (2004), 413. Fridell (2004), 412. 98 Consumerism and the Co-operative movement inmodern British history: Taking Stock 101 However, in his view, the history of the Fair Trade network can be can network Trade Fair the of history the view, in his However, 100 In his view, the original aim of the movement was to create 97 22 In the 1980s and 1990s the British Cooperative In and British 1990sthe 1980s the 99 , edited by CEU eTD Collection an alternative trading order,is otherwisean trading usedasa'band-aid' italternative Radical view more the reformists. and marketoriented conventional promoters, ATOs traditional militant, more the between clashes the symbolizing channels,Tradeisstone, intoseparate into whilethehas retailing two almost written evolved tensions between radicals and reformists became more apparent. Now the definition of Fair Trade? Fair of The future Fair Trade. of realize potential the to therefore and aneven of consumers, widerrange educate beable volumes to and to itsincrease sales to has the network enabled marketmainstream the into move the view, their In form. crystallized a take to movement the allowed label first of the creation the and beginning, the since have coexisted network movementTrade and however,notconsider do itas importantpart an of network'shistory.the Intheirview, Fair the with deny Reformists of launching label.the Max the donot previousthe decades, Havelaar 106 greater,more unofficial, Fair radical Trademovement. viewIn Fridell's spreadof the Fair the Trade is intertwined with network of defeat the the depart from to Tradethe network ATOs market. mainstream partin the take andinfrastructure to 105 104 Fridell, (2004), 103 426. 102 the quest for establishing an alternative trading system. More than Just a Degraded Form of Social Action,” Radicals argue that in order to empower Southern producers, Fairmaintain Tradeproducers, needsto empower Southern in to argue order Radicals that Withinstitutionalization Fair of the Trade itsthe products, of and the mainstreaming In contrast, from the reformist point of view, the real history of Fair Trade only started Holt-Gimenez, Bailey and Sampson, 10. Corinne Gendron, Veronique Bisaillon and Ana Isabel Otero Rance, “The Institutionalization of Fair Trade: of Fair Institutionalization “The Rance, Otero Isabel and Ana Veronique Bisaillon Gendron, Corinne Hira – Ferrie, 108. Fridell (2004), 416. 105 Journal of Business Ethics 23 103 102 However, the label enabled the Fair 106 and reinforces the existing false 86 (2009), 64. 104 CEU eTD Collection unacceptable trading relationships. trading unacceptable consumers, Fair Trade is rulesfair promoting actually trade usingtheexisting unfair, socially knowledge. Therefore, as long as the market dictates the knowledge that consumers are able to consumers knowledgeareable as long marketthe dictates that knowledge. asthe Therefore, power, of while the generates enables reconstruction In foucaultian knowledge power terms, how consumers' knowledge are these about products producedis themarket. mediatedthrough the success of the whole for movement producers with share movement who responsibility members of the become accountable not and its goals. However, The main they that individuals is with onconsumers separated remain problem relying and do this is hard to achieve justice.” Fair social of of argues mainstreaming Trade totheled “commodification has the that as long as de-commodification togethertoenable Fridell production, of the consumersproducers and pay.consumers' to willingness needs to producers' subordinates Trade Fair sovereignty, consumer accepting by that argues Fridell sovereignty. order, suchas the consumer capitalist hegemony the of foraccepting cultural Trade the network Fair the it. criticize They in can participate who asselecting well as system, trading 'alternative' potential.” movementbecoming partof conventional the andmarket, losing its “transformative the over shares, areconcerned market radicals successand experiencing unprecedented authenticity and control by moving into the mainstream. the into moving by control and authenticity 107 can only pose a symbolic challenge to theinform, and both its ethical Therefore,current producers Fair Tradeconsciousnessconsumers. of capitalist world order. 113 112 111 110 109 108 Historical Materialism First, radicalsinitiativesFirst, in seeaninherentproblem establishing rulesthe Northern the of Gavin Fridell, ”Fair-Trade Coffee and Commodity Fetishism: The Limits of Market-DrivenSocial Justice,” Ibid.90-91 Ibid. Ibid.88. Fridell (2007,) 87. Gendron, Bisaillon and Otero Rance, 67. Holt-Gimenez, Bailey and Sampson, 17. 109 15 (2007), 80. 111 Also, while Fair Trade promotes itself as bringing as itself promotes Trade Fair while Also, 24 110 Furthermore, by relying on Northern on relying by Furthermore, 108 Fair While, currently Tradeis 107 Radicals worry about losing 113 112 CEU eTD Collection of aiming to establish another market system, it was less marketable. In contrast, thelabel'fair' itmarket Incontrast, system,was lessmarketable. establish of to another aiming different, being of connotation strong the has 'alternative' As 'fair'. to 'alternative' from changed was system nameof trading the the range of reach awiderconsumers, for to Fair Trade.In order neednotbe do example, able theirto employees tounionize of (think Starbucks). certification. In contrast, retailers donot need to comply with such a strict set of rules; for lies with the producer profits. increasing generate importers) retailers, roasters, to show increasingsales will volumes, producers benot lifted outof thatpoverty, whilemiddlemen (eg. they fulfill from of Fair profitsmostthe generated by Tradereach theproducers. not Therefore, do only all the FLO criteria and are able to pay for position. ofinstitutionalizationprocess shifted, relations havepower have and producers their lost central trade. bondsinternational canbe partnership built enable anda that fair(er) strugglereal for shared life notreal readonthepackaging heard.Inturn, personally but stories –thatare individuals, Fairnot tothink Trade of as life, products havingto relatebutproducers, them their own to 116 115 114 meet workers. and able with consumers to personal in andconversations their also stores, organize for trips producers to theirto be store and in they bypublic lectures awareness relationship producers, raise are with Southern direct ATOs asasolution network problem.this ATOs only Fair sell Trade their products, employees the see Radicals system. the of injustices underlying the realize to be able not will they obtain, 118 117 Studies 115 Finally, radicals also criticize the reformists for creating a new, more marketable image marketable more new, a creating for reformists the criticize also radicals Finally, Secondly, radicals criticize the move towards mainstreaming, as they argue that in the Marie-Christine Renard, “Quality Certification, Regulation and Power in Fair Tradem,” Fair in Power and Regulation Certification, “Quality Renard, Marie-Christine Ibid.93 Ibid.91 Holt-Gimenez, Bailey and Sampson, 7. Holt-Gimenez, Bailey and Sampson, 10. 116 20 (2005), 430. Also, as the network relies on the capitalist framework, it is important to realize that it to is important framework, thecapitalist relies on network as the Also, 114 These personal relationships enable the consumers the enable relationships personal These 25 117 Atthe same time, the burden of proof Journal of Rural 118 CEU eTD Collection 123 World Development 122 121 reach outtoawiderand network enabled supermarkets to population the through retailing spareeffortwillingnessandmoneypurchase to Fairto Trade products. their and consumers distinguished on dependency the reinforced ATOsthe structure Secondly, 120 119 notitconsumer-led. was involved consumers, it while that in movement NGO-based the of alternativeness the see They NGOs. of cooperation capitalism. of hegemony the challenge to fails that consumption” ethical “apolitical, an of emergence the to led this solidaristic,humanitarian, instead feelings, ethical of their political beliefs. Radicals argue that has enabled the network to reach out to increasing numbers of consumers and to appeal to their disadvantaged outsiders. disadvantaged insiders and advantaged of aworld creation the leads in to sector, one andtherefore producers moreto attract consumers and demandincrease for Fair Trade products. numbersgrowing of ThereforeFairproducers. themainstreaming they promote of Tradein order reach be to able volumes to sales the increasing focus on they Therefore, promises. these to delivering not in network the of shortcomings the see and South, global the in development view Reformist separate from that of the movement. identity own its builds FLO that and origins NGO its abandons network the that means also Hilton andJamesMcKay (Hampshire: Palgrave Macmillan, 2009), 14. Contemporary Britain: Non-state Actors in Society and Politics since 1945 Ibid. 957. Trade,” Free ofGlobal Era in the Organizations Trade Alternative Tide: the “Fighting Leclair, S. Mark Ibid. 14. Matthew Anderson, “NGOs and Fair Trade: The Social Movement Behind the Label,” in Label,” the Behind Movement Social The Trade: Fair and “NGOs Anderson, Matthew Gendron, Bisaillon and Otero Rance, 70. First, reformists argue that the the argue reformists ATOs that First, reach the all beable to never will structure seeachieving networkasameans reformists theIn contrast, Fairtrade to long-term 30, 6 no. (2002), 955. 122 119 Radicals focus on the origins of the movement that grew out of the This, however, is contrary to the network's developmental mission. 121 26 120 In radicalviewthe building Faitradethe brand , edited by Nick Crowson, Matthew 123 On the other hand, NGOs in CEU eTD Collection can be shortened, andconsumers view, between producers distance the ofhow example Fair Tradea great hasbeen example of how trade can cause. shared for the be done and then pressuringFurthermore, they consider consumers to bebig partners of producersbusiness who build an alliance of network. the power importance andtransformative great the showing causes arealready together to follow suit. proceedingbut conducts, focus transformation corporate onenvironmental the of and social slow the middlemen, of unnecessary elimination the minimum, Fair the Tradereformists, price economics into social social processes. into economics of re-embedding the enable Fairthe FLOcriteria andthe Trade believethat network reformists market. mainstream tothe challenge acounter-hegemonic poses network the that achieving its goals of anddevelopment transforming themarket. Moreover, reformistsbelieve 132 131 130 129 form form of partnership inthemainstream market. and thepromotion alternativethe tradingof withinnormalize ethics in thesystem to order this 128 127 126 125 regarding unjust trade rule. unjust regarding while quality aretoohighrequirements for small to complyproducers with. stillproducers need tosell of most on theirconventional marketsas produce demandlow,is too 124 raise demand. to therefore (2002), 420. Fair Trade Coffee inLatin America, of Strategic Management Laura T Raynolds, “Re-embedding global agriculture: The international organic and fair trade movements,” trade fair and organic international The agriculture: global “Re-embedding TRaynolds, Laura Laura T. Raynolds,“Consumer/Producer Links inFair Trade Coffee Networks,” Ibid.28. Laura T. Raynolds Douglas Murray Peter and Leigh Taylor, Will Low and Eileen Davenport, “Mainstreaming fair trade: adoption, assimilation, appropriation,” Hira– Ferrie, 108. Hira– Ferrie, 114. Konecny – Myslivecek, 14. Secondly, reformists do not believe that Fair Trade can resolve the bigger problems bigger the resolve can Trade Fair that believe not do reformists Secondly, Stefano Ponte, “Behind the Crisis,” Coffee the “Behind Ponte, Stefano 131 129 thereforemaking the trading relationship more personal. Moreover, 14 (2006), 315-316. inFairAlso,reformistssee agreatpotential Trade forsetting agood 124 126 Another main problem reformists see for the network is that small that is network the for see reformists problem main Another Therefore, r Therefore, (Colorado State University: Fair Trade ResearchGroup, 2003), 27. 132 Drawing on Polányi, eformists believein evolutionary from change within, Economic and Political Weekly 127 27 Reformists argue that the Fair Trade network is Fair the network Trade arguethat Reformists One Cupat aTime.Poverty Alleviation and 133 this argument clearly shows that shows clearly argument this 36 (2001), 4414. Sociologia Ruralis 125 130 In their In 128 42 Journal For CEU eTD Collection 136 135 134 133 demand. as consumers in fairness move asforward their will asbusiness itonly raiseawareness, is crucial to Therefore, Fair Trade by of potential beconsumers. the the argue they canonly realized market, the that market, therebymakingitmarket, a stronger, pressuring force. communities. importantly,mostAnd movethis hasstrengthened Fair Trade's positionin the wider have reached also Fair Tradeideals the producers. At sametime, of the numbers enabled theincreasing ofsales volumes, which in turn enabled incorporationthe of growing labels. FLO the challenge to try that brands alternative of launching in the seen obviously most be their view, Fair Trade has been able to pressure retailers through direct competition. direct their view, through pressure retailers Fair Trade able been has to been able attractto new consumers but also tohave a greater impact on conventional retailers. In poverty. of lifting out people in fulfill role its system to capitalist to enable beimplemented the needto corrections that believe reformists do not consider the capitalist system to be the root of poverty in the global South, but Agricultureand Human Values Ibid.325 Low – Davenport, 319. Raynolds (2002), 419. For background see Karl Polányi, Karl see background For Reformists seepotentialReformists a great in into moving themarket. mainstream This move has Reformists alsoargue by that movinginto themainstream market, Fair Trade has notonly 136 17 (2000), 306. The Great Transformation, 28 135 3 As reformists believe in the forces of forces inthe believe As reformists rd edition. (Boston: Beacon Press, 2001). 134 This can CEU eTD Collection 140 139 138 137 members. their for willbelower costs position percapita as the better bemembers will more with in a cooperatives rate, fees flat havean annual As the certification spend debts. butalsoprevious fees, andto certification on repaying on on organizational cost, only has not and thecooperative the producers, be paidto to internalprices setthe Cooperatives not income Fairtrade andpremium lead price criticize thatthe higherfor thefarmers. do to criteria. organizational the comply with to able more be –will expertise Radicals arguemore productive cooperativesthat –with better managementprobably skill and forbe new producers. organized impose which the farmers needto costs cooperatives, into cooperatives. beeninto abletoorganizenot have more developed.capabilities are been because farmers Many small incorporated, havenot they whoseorganizational larger cooperatives advantage ontheinclusion producers of criteria current the that argue Radicals future. the for proposals different have therefore and system, of current the aspects with different schools areconcerned however, two the be improved, process production The hold very differentviews. as in the context chapter to show on which issues radicals and reformist agree on and which they be discussed will themes main four same The radicals. and reformists between dialog a enable to along thechain; vale views and schools withthe of two the becontrasted in will each other order Bacon, 505. Utting-Chamorro ,589. Konecny – Myslivecek, 12. Utting-Chamorro, 589. needsto system Fair the Trade production that concern share the reformist and Radicals Limits totheFair Trade movementandnetwork will be discussedthematically,moving Chapter 3:Concrete issues from differentperspectives 29 137 Secondly, in order to be certified, small be certified, to order in Secondly, 138 140 Thirdly, radicals Thirdly, Finally, radicals Finally, 139 CEU eTD Collection 146 145 144 143 142 141 consumers. Northern on dependence their by outreach condition before joining. were in best the that from mostFairtrade the gain will cooperatives those therefore conditions, pre-existent notalter the does fertility, size,technology,Fairtrade family andsoil that and levelsby farmer's and experience, aredetermined profitcriticize thatproduction therefore, costs movement. of the principle solidarity the whichendanger Tradecompetition between leadsproducers, to leadsdiscriminationin turn to smaller producers. of At sametime,limited the the scopeof Fair to expand the cooperatives, they are limited by insufficientthe demandfor their which product, compliance with the democratic requirements and maintaining competitiveness in the world the in market. competitiveness maintaining and requirements democratic the with compliance balance to requires cooperatives network in Fairtrade the successful participation highlight that it is based on their understanding of Fair Trade as a development project. Secondly, reformists while the rest of the ingredients arenon-Fairtrade. ingredients of the rest while the direction. A exampleis Traidcraft’sgood honey Geobar,and raisins, whichcontains Fairtrade andmore attention draw Fair to Trade Composite products. are products a first in step this marketingThey would network. the argue thatbroadening rangeof products the enable greater for is ashortcoming products clear Fairtrade available argue limitedreformists the of range that focus and to Fairtrade Finally, network cooperatives the on commercial the markets. abandon 108. Alex Nicholls, “Fair Trade New Product Development,” Ibid.1116. Raynolds,Murray and Taylor(2004), 1115. Fridell (2007), 98. Utting-Chamorro, 596. Konecny – Myslivecek, 12. In contrast, while reformists also argue for the inclusion of less producers, while theinclusion alsoarguefor advantaged In contrast, reformists of 145 They arguegrowing that productswould demandfor Fairtrade enableproducer 143 141 Furthermore, radicals Furthermore, limited are warnthatcooperatives intheir 30 146 Composite products arealsoComposite advantageous, 142 The Service Industries Journal Therefore, while it would bewhile necessary itwould Therefore, 24, no.2 (2004), 144 CEU eTD Collection impose a threat to the Fair Trade principles, as they tend to opt for one-year contracts and avoid contracts for one-year opt tend to they as Fairthe Tradeto principles, athreat impose can buyers market-driven only view, her In market-driven. and quality-driven mission-driven, motivations: their on based buyers, of types three distinguishes Raynolds analysis, chain Gereffi’s Drawing on network. value weaken the necessarily not Fair does of Trade retailers extra costs of 'relational governance', will doso. will of'relational governance', costs extra and ischeck if maintained. created cana long-term partnership avoidAnd ifsupermarkets the can if monitor only minimum the and price premium the are paid,however, they are unable to system. They also see a problem problem high of fees,certification limits which small groups’ procedure ability join to the with FLO's limited Reformistsability to monitor traders. are Currently concerned FLO withCertification the managerial and advocatingmanagerialproducts solutions. problems ofare concerned improvingwith currentsystem the by introduction furtherof the composite the current reformists better-off.contrast, already and the In advantaging environment acompetitive creating system, such for system current the criticize issues. Radicals different with however,are concerned they as the more products. certification composite of 149 148 147 exist. of products real range if awider pay purchases into their to enable toturn willingness consumers Fairbecause in retail Tradethe the canbehidden price. premium 148 Certification is clearly an issue on which reformists and radicals are generally divided. generally are radicals and reformists which on issue an clearly is Certification is imperfect, production of system current the agreethat reformists and In sum, radicals Barrientos –Smith, 196. Ibid.102. Ibid. Therefore, reformists promote broadeningthe of reformists Fair the promote Trade Therefore, and the spectrum 31 149 However,in theirview, broadening the range 147 Finally, products composite CEU eTD Collection market due to low demand, or due to the most radical most tothe ATOs' due or low demand, certification due to FLO the market to reluctance of Fairout the Trade kept butare be certified, could that volumeof isproducts there agreater chocolate.” and drinking coffee, chocolate tea, fair bananas, trade brand J andchocolate cake,while Sainsbury’shasmangoes own coffee,bananas, “fair trade chocolate, low cost.” price. lower a at concerns ethical their tocompromise consumers enable labels These criteria. specific create to labelstheir own thatresemble the Fairtrade label,however donotuphold such and strict power of label. officialthe FLO power and uniqueness the labels undermines of these abundance the that agree reformists and radicals Both initiatives. voluntary also as FLO.There are samecriteria alwaysnot the similar, but follow labels that trade fair other of Thereareanumber system. certification official FLO butalsoenhance products. traceability newmarkets, the to of these 157 156 155 154 153 152 151 150 network. whole the assessment, inits undermines which secrecy inof turn often for credibility the criticized product is Starbucks Forexample, Trade theFair network. of transparency the undermine also buyers rate. interest cent a3per with not offer a credit does only pre-financing, lbof for$1.20/ coffee in2004,but did notpay premium. Fairtrade the Furthermore, this program pre-financing. ca/_Social+Responsibility/ Development 155 Another major issue that reformists see is that not all Fair Trade products go through the through go products Trade Fair all not is that see reformists that issue major Another Barrientos –Smith, 194. Renard (2005), 429. Witkowski, 28. Lee – Vihinen, 9. Ibid. Raynolds (2009), 1090. Responsibilty.” “Social Canada, Company Coffee Starbucks Laura T Raynolds,“Mainstreaming Fair Trade Coffee:From Partnership to Traceability,” At the same time, these labels also enable big businesses to “greenwash their image at a at image their “greenwash to businesses big enable also labels these time, same the At 156 For example, the Co-Operative Group supermarket has created its ownlabelfor its has created supermarket Group example, Co-Operative the For 37, no. 6 (2009), 1089. 150 For example, For hasto Origins paidanaverage Starbuck's Commitment program 152 However, other buyers use the Fair Trade label not only to gain access to 154 Furthermore, supermarkets and started companies Furthermore, processing 32 http://www.starbucks.ca/en- 153 151 157 Moreover, corporate On the other hand, other the On World CEU eTD Collection 163 162 161 160 159 158 system. relationships based on dialog and mutual relationshipsbased on mutual dialog and trust. long-term building are partners if Northern monitor not does FLO However, partners. Southern interaction infulfilling their and criteria the relating with producers to traders monitors only mutual production), whichreinforces trust. (ie. it is not the qualityinformation problem. or the taste of coffeeconsumers but the terms of tradecertain and the wouldcircumstances products, certifying By be revised. should processes licensing however,important; certification and the of not FLObeFair label is Tradea having arguethat radicals Therefore, profits. greater with corporation the ensuresable theto consumersthe by charging themfor the ethical value, whichisactually not included –leaving consumersassess. competing labelsharm bynot producers providingthe ashigh standards and asFairtrade, harm that Therefore, they the competingthat and labels harmboth producers consumersare bymisleading them. Intheirview, produced labelingin a certain its values. of normalization and spreading lead to the way resolves that in of with supermarkets, cooperation can civicand ethical changing coordination conventions the strategies changewhile Fair thecorporate not they Tradeargue might by itself Furthermore, that asymmetryonly andnot be allproducttypes, exist. which then already that to applied couldthose of seestandards. Reformists thesolution in universal production criteria for creating and trade, whichTradelabel,carry however, not products, Fairtrade muchthe do higher with comply Journal of Business Ethics Gavin Fridell, “The Co-Operative and Corporation:the Competing Visions of the Future of Fair Trade,” Ibid. Konecny – Myslivecek, 17. Barrientos –Smith, 196-197. Hira –Ferrie ,115. Fairtrade Labelling Organizations International (FLO). In contrast, radicals, based on their Marxist understanding of corporate interests, argue 158 Probably, this is the most confusing aspect for consumers – that there are someFair are there for consumers–that aspect Probably,confusing most is the this 161 Moreover, FLO certifies a quality that consumers are notable toobserve 86(2009), 81-82. 162 However, a major problem of the system is that it 33 163 Therefore, in the radical view, there is potential 160 http://www.fairtrade.net/ 159 CEU eTD Collection 169 168 167 166 165 164 to this nichemarket. a easily belabel, maintaining degradedto access acontrol asymbol,or production over without differently. managed be should it however, label, in acentral corporations to use Fair Trade as another opt out for social responsibility programs. it.actively committing withouthas The enabled network, the or participating, to label into buy to businesses enabled has it that argue They label. the of mainstreaming in the danger mightbuteven inonly in relations, productionthe conditions. the trading They see agreat loosening Fair of the Tradethe criteria, does not only undermine the Fair Trade movement, but also strengthens the corporate sector. corporate the strengthens also but movement, Trade Fair the undermine only not does movement. long-term relationshipof will the the prospects threaten this that believe they volumes, Starbuckshigher sales canoffer that radicals acknowledge products as Fair Trade, and do not always conform to all criteria. their of portion a small selling only while retailers, ethical as themselves promote to image competitor. Starbucks notonly as the greatest partner of Fair Trade in North America, but also as the greatest non-Fairon promoting by Trade Fairabusing theavailability products Trade.of They see force, andlimitations work be could unionized requirementexample, aminimum For partners. design criteria for the Northern retailers as well, and not only in their relationships with Southern to might be a solution arguethat Some radicals an market. create alternative to movement the Fairincorporate strategy, Trade into their corporate products edge of awaythe radical they take Renard (2005), 420. Ibid. Ibid.92. Fridell (2009), 83. Nicholls, 112. Renard (2003), 95. Secondly,chains,in involvement FairTrade argue through supermarket that radicals can Finally, radicals see great problems regarding thegovernance of FLO, which is the hearth 168 Finally, label Fairtrade radicalsthe warn that has enabled bigbusinessestouse the 164 Radicals fear that growing consumer and corporate demand lead growing andcorporate will to Radicals fearthat consumer 165 which would mean the loss of the original values not 34 169 Therefore, the mainstreaming the Therefore, 167 Asbig businesses 166 While CEU eTD Collection 175 Perspective of Producers Organized Within the Fair Trade Market,” Trade Fair the Within Organized Producers of Perspective 174 173 172 171 170 ensureFair makers and that FLO decision based to onmoremovement between dialogproducers quality on Southern the producers. power relations Fair alsocontrary to relationships are Trade's interactions, because these social notion of historic enable theequals theirand to bylistening experiences andexpertise. Northern experts to controlas unequalthe relationshipspower undermine that notion the of partnership. them and to impose their visions of qualitythe isrequirements issue animportant as(drawing on Foucault responsible organization for deciding who should beincluded in Fair the Trade Setting network. by FLO-CERT, Quality by experts. Northern arerequirements alsosetbyFLO, andFLOis the monitored and arecertified producers labeling initiatives; of by FLO,representatives dominated improve farmersSouthern to organizational theirand production aresetby Prices techniques. has grown to be characterized by in paternalistic relationships, which “help” experts Northern However,Fair argue radicals democraticpromote andpartnership. Trade that relations aimed to a shifthasin market relations. ledto conventional the towards power restructuring,institutionalization and mainstreaming of In movement. the theirview, turn the machine. of certification the They argue during emerged have that problems the these the situation. the supply that was times higherseven than demand, temporarily applicationsrejected nottoworsen movement, and which values are to be promoted. consists ofFairdefineindetermine what Trade hasFLO the to part whotakes the quality; power Renard (2003), 96. Francisco VanderHoff Boersma, “The Urgency and Necessity of a Different Type Market:The of Different ofa Necessity and Urgency “The Boersma, VanderHoff Francisco Konecny – Myslivecek, 14. Renard (2005), 420. Fordetails on thepower-knowledge paradigm see Foucault, 92-102. Ibid.430. as Fair partners Tradeargue that beby treatingshould Southern Radicals reorganized 173 Thisis problematic, as reflects the non-democratic nature of network,the as well 175 Therefore, radicals promote the reorganization of the 35 172 For example, in 2002, when FLO estimated in example, when 2002, For Journal of Business Ethics 174 170 171 The current paternalistic current The Originally the movement the Originally ) byhaving power the to 86 (2009), 58. CEU eTD Collection availability. In their view,mainstreaming is beneficial for all, as gain higherproducers demand conventional products. from away consumers attract to FairTrade needs demand, increase to in order time, over system,the and argue commoditiesinelastic asprimary that havechange and demands donot differentpromote solutions amanagerialReformists fields. related tothese perfect take view to system of pricing thecurrent problems with are there that agree and radicals aswhile reformists aspects, andinteresting with oversupply, however, the two schoolsPricing offer different critiques hasledcorporations toashift in of relations producers. to disadvantage the power and towards turn the ofFLOand creation the arguethat radicals Furthermore, partners. Southern should relations, all by beregulated actors andFLO criteria in not only with relationship their same time, symbol. the At an empty into thelabel of degrading the over concerned are radicals theyIn contrast, emphasizenetwork. the of unity the label and FLOthe against attacks with concerned are therefore market, that conventional the in better work Trade Fair making in interested if are Reformists movement. Fair Trade radicals. However,is this isnot surprising as these concerns are related to the mainstreamingto of the be built on partnership of regulations their partnership. trading andto democratic, more reorganize it intoa system itin together whichconsumers can and producers therulesand define democraticmake to essential is it system, trading alternative an be to is trade Fair 178 177 176 facedbyproducers. issues treatthe Trade to really works The question of The question and minimum the issuesof regardingprice supplyand demand are really by and viewed differently reformists certification are to issues connected In sum, the Hira – Ferrie, 112. Ibid.59 VanderHoff, 58. 178 Reformists awareness-raising promote initiatives and product better 177 36 176 From the radical point of view,if of point From radical the CEU eTD Collection Trade system. producers in times of high prices. In their view, such a tendency could undermine the costly,is away quite scare criteria can which production fulfillingprices. FLO whole time, same the At Fair high conventional of cases in not offerit however,real does prices; alternative a market world marginal. Fair and quite Trade canbecome price conventional differencethe the between fluctuates, minimum price as a solution to producers’relations of supply anddemand. problems.price of which product, the would enableflexibility and efficiency,reflecting also while the For example,final of the asapercentage price in minimum the setting However, seeanalternative reformists as the world coffee Fair of nature Trade. alternative the toreinforce also providebut stability only to measure not price minimum goesagainst basicprice the regulating rules supply of itisand demand, a good 185 184 183 182 181 180 179 partners. the by between butcan benegotiated businesses, the notnecessarily dictated are these relationships Furthermore, network. for the reach newmarkets to areable and corporations forproducts, their quality. believe premium the that of price Fair Trade shouldbeby products accompanied premium agendas.”focusing driven onproducer wellas consumer demandsas masson a achieve scale andto thenetwork that, mustspecific “respond to product-driven In contrast, radicals are critical of the current system, and as Marxist, cannot accept the cannot Marxist, and as system, of current the radicals are critical In contrast, Ibid.12 Holt-Gimenez, Bailey and Sampson, 11. Ibid. Hira – Ferrie, 114. Ibid.110. Nicholls, 105. Raynolds (2009), 1091. For reformists the minimum price signals the alternative nature of the network. the of nature alternative the signals price minimum the reformists For 181 184 The minimum price has ensured stability and survival in case of devastatingly low devastatingly of in case survival and stability ensured has price minimum The 179 185 At the same time, reformists believe that it is important for Fairbeis sold Tradeit to important that believe reformists At sametime, the They further criticize that as the minimum price is not setbased onproducers' as theminimum priceisnot that criticize They further 183 37 180 For example, reformists example, For 182 As a CEU eTD Collection fluctuate with the economy and create oversupply and a competitive environment for Fair Trade with environment and oversupply acompetitive economy the fluctuate and create pay, industrialized dependingconsumers' to willingness world,on and the itcan easily as unionization). as (such criteria same the with comply stage of the commodity chain, and that each actor – from production to distribution – should 188 187 186 interactions. Middlemen can use theirmonopsony position increaseto their own share even from Fair Trading improve increasebutalso theirprofits. producers communities, to enablingretailers their and equality principles. countries. in different premium of levels different in means caseof coffee) example, the (for minimum auniversal price therefore countries, an 'asprice. fairas possible' 'fair only chargingFair Tradeprice', a is not that still radicals argue therefore away consumers, scare high beto too cannot prices means that also this producers. sametime, the At of concerns needs and costs, but in relation to consumers' willingness to pay, it does not respond to the real 192 191 190 189 developments. and andcosts for amargincosts prices coversocial should product and environmental radicalsTherefore, by be arguethatpricesshould need andnotcentrally, determined that and they in Fairparticipate Trade,just they that lesslose through conventionalthe market. than longer loseminimum efficient is nocover price costs, producers if production therefore even to notdoes inflation respond to in producing countries either.the Some argue that Fairthe Trade Ethics StefanMann, “Analysing fair trade in economic terms,” Holt-Gimenez, Bailey and Sampson, 12-13. Fridell (2007), 96. problemFurthermore, radicals Fair seeagreat the with Trade only not premium enabling J. JMcMurtry,“Ethical Value-Added: Fair Trade and Casethe of Cafe´ Femenino,” Konecny – Myslivecek, 34. Lee – Vihinen, 6. Ibid.2039. 86(2009), 43. 191 188 To resolve this problem, argue ethical radicals that value beshould added every at At time, the living radicals highlight vary that standard across producing 186 Moreover, as the minimum price is based on Northern markets, it markets, isNorthern basedon price minimum Moreover,asthe 38 189 This obviously works against the solidarity This worksagainstthe obviously The Journal ofSocio-Economics 192 Finally, radicals see a great danger in danger a great see radicals Finally, Journalof Business 37(2008), 2037. 190 187 CEU eTD Collection purchasing. ATOs to havewho access those to online or scope Trade's Fair limits and side, consumer's volumes.view, reformiststhe In through purchasing ATOsmuch effort toofrom requires the system. to changethe current trading therefore pressuring retailers to change their products. In their view, consumer power can be used by trading transform theirdemands,consumers system have currentchanging powerto the the moving for arestrongly awayfrom reformists the pushing ATOs argue system. Reformists that while values, traditional their of loss the see Radicals movement. inthe division to led that Retailing totally from independent influctuations marketprices. of the pricing system,set centrally, based onconsumers’ topay.willingness radicals arestructuring for Therefore, push and advocate for a beminimum to not needsand andproducer becosts Fairproduction argue for basedon the Trade to price price as a percentage radicalsjust equality.contrast, promote minimum argue price isnot the doesnot and that They of productionrelation costs, to the final price in of for pricesetting advocate rules. reformists Some ofmarket rethinking andthe therelations product to reflect the social relations just enables Fairwhich Trade, of element central asthe floor price seethe Reformists of supply and demand. In sharp 195 Raynolds (2009), 194 1091 193 producers. First, reformists see the ATOs network as a clear limiting factor to increasing sales increasing to factor limiting a clear as ATOsthe network see reformists First, one been clearly has network Fairtrade in the corporations including towards move The in caseof Fairbe can Trademinimum the seen opposition price. In sum, aclear Hira – Ferrie, 108. 956. Leclair, 193 195 Reformistsif argue that Fair remainTrade products inmarket the alternative 194 39 CEU eTD Collection isdue tomarketing not only operational limitationsbutalso issues, such thelack to as of product transferring willingness-to-pay intoactual consumers' In purchases. Nicholls' view this problem wider range products. of inlackvariety Fair of isTradeIn ordertoreallyoffer there needto products. engage consumers a duetothe is which partially mainly of purchases consumers, “non-ethical” to a compliment the wouldbutproducers, alsostrengthenthelabel itself. currently Also, Fair Trade are only products argue for new product development, argue for newproduct characterized by oversupply. However, this does notvolumes asalimitingfactor tofully engaging with supermarketthe retailing opportunities. seem to be a fundamentalsource andlimited production product of non-transferability see of the increase They demand. problem at the momentdevelopmentsbeproduce in production able requiredthe volumesto into even caseof a sudden when Fair Tradefor need is a also there supermarkets, to outreach the to parallel that warn also reformists some is volumes. sales and awareness both in raising factor a key is visibility that argue in supermarkets. be sold to need therefore consumers, committed less mainstream, Fair more needbe even to Trade attractive visibletomakepurchasing to and accessible products markets, North conquer American to needs it intrade, world factor becomeTradewas asignificant to 202 201 200 199 198 197 196 share. market its itpotential reach never sphere, then will Furthermore, reformists see an issue in the limited variety Fair andlimitedof variety Tradeinissue the products seean reformists Furthermore, Wright – Heaton, 416. – Heaton, Wright Ibid.105. Nicholls, 115. Ibid.416. 415. – Heaton, Wright Hira – Ferrie, 111. Nicholls, 114. 197 which will not work only work whichthrough will not ATOs.view, In their raiseinterest anddemand, to 202 Moreover, the lack of products also translates into difficulties in into also Moreover, products thetranslates lack of 201 as it would not only enable outreach to a wider of it range not onlyenableoutreach to as would 40 196 Secondly,if Fair argue that they 198 199 Reformists However, 200 CEU eTD Collection see Faira problem with Trade functioningmodel in todeliver asabusiness order benefits to a not do reformists radicals, the Unlike even more difficult. efforts makes these mainstreaming actor. other the with cooperation however, problem; to This isitself reluctance radicals' without own, their on act network the within agencies Different efforts. marketing and branding in the and network the within synergy little of issue the highlight Reformists Trade. Fair of historic, religiousthe of background Fair Trade. connotation with it. with connotation that carries label still the asachurchmovement, Fair because Trade started argue that reformists exactly Fairthe Trade to,which reinforces the credibility premium goes issue. Finally,some network, while the relevant criteria are not alwaysfulfilled. not criteria are while relevant the network, arguments. itcampaignis such with to impact difficult Fair therefore Trade life; concrete has hadon people's information the noton is Fair Traders asthere facechallenges gap. of acredibility that linked to make.they impactlearncan the about enable to shoppers packaging to the on 207 206 205 204 203 it outcomes. to specific relate image. build a stronger many Fair efforts to too confusion Tradeandall, undermine arestill there whichleadto labels, of First management. branding and marketing current the with problems many see They brands. variety. 209 208 Business Ethics Finally, argueand radicalsbeholdprocess building that brand spreading the the reformists Karla Utting, “Assessing the Impact of Fair Trade Coffee: Towards an Integrative Framework,” Integrative an Towards Coffee: Trade ofFair Impact the “Assessing Utting, Karla Ibid.424. 420. – Heaton, Wright Lee – Vihinen,10. Nicholls 102 of Fair Trade development the promote reformists shares, market increase to In order 203 Wright – Heaton, 423. – Heaton, Wright Nicholls, 114. 207 86 (2009), 145. Also, there is difficulty in promoting the transparency of production and the 209 However, this only seems to apply for those consumers who are aware of 204 Secondly, many consumers still do not recognize the label or cannot 205 Some reformists suggest that there should be more information morebe should there that suggest Some reformists 41 208 Consumers still cannot see where cannot still Consumers 206 This issue is issue This Journal of CEU eTD Collection quality. higher much are of that partners Southern their with relations trading alternative maintain and chains.many supermarket Also, awareness, unlike ATOs line bottom asa Fairtrade criteria see decisions in their purchases. needs tobeaccompanied by campaigns. raising awareness consider thebuilding image of fora strong Fair Trade as fora central issue thefuture, which also any bring consumers. image, which reluctancefurther to could charity potentials in merging into the conventional market. 211 210 Fair through area. Tradegenerated in producing the by transparency, long-term to their commitment by localizing trading and partners, theprofits products. ATOs Furthermore, non-certified marketable. notselling by alternativeness retain their image moremake Fair just them astronger to create aim for Trade not products to radicals do init an consumercarry aspurchasing the not same meaningto Starbucks does ATO. the where they purchase it. Therefore, they argue that buying certified products in supermarkets orin Fair perception of is Trade of by retailerinfluenced the consumer perceptions products greatly producers. 218 217 216 215 Fridell (2009), 214 83 213 212 is that, unlike aid programs,it enables the direct reach of specific producer groups, who therefore Trade Foods,” 217 Michael K Goodman, “Reading Fair Trade: Political Ecological Imaginary and the Moral Economy ofFair Economy Moral the and Imaginary Ecological Political Trade: Fair “Reading K Goodman, Michael Ibid. In contrast, radicals are critical of the creation of aFair view,In their Tradeof brand. creation of the radicals arecritical the In contrast, Ibid.14-15 Holt-Gimenez, Bailey and Sampson, 15. Holt-Gimenez, Bailey and Sampson, 4. Gendron, Bisaillon and Otero Rance, 68. Nicholls, 113. 425. – Heaton, Wright 215 ATOsATOsretailers. mainstream from bedifferentiated clearly can arecharacterized 210 ATOs still aim to reach out to committed consumers who make socially conscious In the reformists' view maintaining the alternative discourse of Fair Trade limits its limits Trade Fair of discourse alternative the maintaining view reformists' the In Political Geography 216 At the same time, these stores still focus on raising consumer raising on focus still stores these time, same the At 23 (2004), 908. 42 218 211 The great advantage of the the ATOs of advantage The great network Finally, they criticize radicals for their 213 212 Therefore,reformists 214 Thus, CEU eTD Collection 224 223 222 Fridell (2009), 221 83. 220 219 can meaningfully benefitfrom this trading relationship. Michael Dawson, Michael production inpractices worldthe the and about difference Fair Trademakes. Drawing on products, andproducts, that through from producers. Trade Fair from consumers of alienation the reiterate which implications, commercial the and between radicalspartnership arguethatthis consumers, producers islimited relationship by obtain. knowledge consumers network has campaigns,network by been Fair continuous accompanied Trade hasawiderbase andmore disappear.would movement almost American in spreadof wherethe the In contrast, Europe, Fair North Trade the selling coffee, stopped if Starbuck For example, awareness. consumer Fair viability the of andthat based andraising Trade is people recognize oneducating radicals reformists both However, relationships. personal and partnership on based market, alternative movement. whole consumers either are unaware of what Fairmost in Fair Trade.face role is that Fair has A meaningful Trade to that still challenge clear Trade is or do not their fulfill have to order in a consumers clearthe empower to is crucial understandingit power, is knowledge Since of the market shares. market and for reformists toenableincreasing network the spreadof the awareness isimportant the Fair Tradeunderstand premium, importance of need to the they Raising their purchases. Illinois Press, 2005) Ibid.418. 424. – Heaton, Wright Renard (2003), 92. Dawson, Michael 956. Leclair, Secondly, radicals argue that consumers lack efficient knowledge both the about both knowledge lackefficient consumers Secondly, arguethat radicals Finally,both radicals and reformists argue thatit is essential to raise consumer awareness. 224 In contrast, educating consumers is essential for radicals in order to create an tocreate in order for radicals isessential consumers educating Incontrast, 223 220 However, in order to convince consumers that they are willing to pay the Fridell argues that big corporations have the power to influence what The Consumer Trap: Big Business Marketing in AmericanLife 221 Furthermore, while Fair Trade promotes itself as based on 222 43 219 (Chicago: University of University (Chicago: CEU eTD Collection 225 consumerscommitted toit. linked be; therefore, it is crucial to gain growing market shares. availability.Fair more thatthe Theybelieve areTrade off sold, will products better the producers growing as well as brands, Trade Fair strong of building the promote They market. conventional its label. In contrast, reformistsRadicals argue mainstreamingleads that the degrading to of its movements, the values, andeven are concern over how to make Fair Trade a better player in the Renard (2003), 93. The issue of mainstreaming is central to the division between radicals and reformists. and radicals between division the to central is mainstreaming of issue The 225 44 CEU eTD Collection achievements as compromising with the exploitative, conventional market. Simultaneously, market. conventional exploitative, the with compromising as achievements FairTrade.reformists’ within seethe radical problems often As Marxist, contradicting find to same data use that reformist and issues. Radicals of concrete assessment the determine is to certify and monitor Northern trading partners the same way as Southern producers. and respect based dialog.practical most Their proposal network, trust, on personal relationships, ATOsthe to return the in solution inherent the see they as – problems the to solutions their Being so strongly radicals of network, the critical generally only offer and their critiques not Northern experts; serious problems with the inclusion of corporation and selling out of the ideals. serious problems with FLO,forthe example, unequalthe powerrelationsmaintained by highly critical of the radicals are Incontrast, rules. settingtrading up universal and products, composite products current functioningbrand, new Fairtradebuilding introducing suchas astrong issues, managerial with are concerned of the Fair Trade network. increaseFair Fairtrade products’ face. Trade aimto market Reformists share, therefore needsto They argue that there are for that. right arethe organizations Fairthe Tradenetwork FLO andargue and andimproved be that needto regulated, andpractices current rules trading andnotbelievethought do orderis capitalistIn the that inherently world view, theirunjust. the Trade shouldcompromise not its original values. In reformistcontrast, areinfluenced byliberal empower Third Worlditis capitalist crucialtoabandon system; Fair producers, therefore the historic maintenance the theof beliefs advocate ATOsMarxist to inThey believe order network. their on based Radicals, movement. Trade Fair the in a division to led shelves supermarket Conclusions In conclusion, this debate is a really good example isIn this conclusion, areallygood debate how ideological of assumptions issuesthat different intoviews practical the on translate differences These ideological The inclusion Fair intocorporations of the Trade and network the move towards 45 CEU eTD Collection organize for trips producers and consumers. lectures for Trade. hand, On radical other the ATOsalwaysFLO-certified products; not their keepselling followto Reformists inFair and suitand processors participate keeppressuring supermarkets case. The Fair from Trade andlearn harmoniously andother.movementcoexist, each network the quite not is that network; the and movement the of split the to lead would that reformists and radicals between isasharp there that division While, suggest proposals. would discussion this their of reach limited the realizing not and impracticability for their radicals critique reformist 46 CEU eTD Collection 2002 2001 2001 October September 2001 2000 1999 1998 1997 1997 1994 1991 1990 1989 1989 1988 1973 1972 1969 1962 1958 1950s late 1946 Appendix 1– Timeline of Fair Trade history FLO launched the Fairtrade label honey,coffee, coca, juice bananas,orange sugar, and cane tea, andlabels for seven commodities: standards international FLO established movement in the FINE established single one definition Fairof Trade, acceptedby all actors CERT FLO established anindependent, autonomous organ of certification, FLO- tosellStarbucks started Fair Trade coffee Fair Trade in labeling initiated States was United the foundation of FINE Fair Trade labelinginitiated in was Canada Bonn International, Organizations Labeling Trade Fair NEWS!, Network of the European World Mainz Shops, UK. CafeDirect, European Fair Trade Association Trade Fair Netherlands International the Association, founding International Coffee Agreement(ICA) breaks up certify fairlabel coffee trade became first the "Max Havelaar" to Netherlands in the Fair Trade coffee Organisatieintroduced tothe fair European markets trade SELFHELP in first United States shop the “World firstthe opened Shop” finally International Coffee firstsigned (ICA) was The Agreement Fair Trade in to started Unitedopen shops the States Oxfam inshops Britain sellingstarted crafts made by Chinese refugees The history fairof starts with trade Edna Ruth Bylerin Pennsylvania 47 CEU eTD Collection Appendix– Recent 2 Most FLO graphs The growing number of certified Fairtrade organizations producer from 2008 2001 to 48 CEU eTD Collection Appendix 3 – Coffee prices in a historic perspective 3–Coffeepricesina Appendix historic 49 CEU eTD Collection requested. the promotion and growth of Fair Trade. An interest free pre payment of at least 50% is made if maintain long-term relationships based on solidarity, andmutual trust contributerespect that to being marginalized of and small notproducers maximise do profitat their expense. They well- and environmental economic social, the with Fair for concern Trade trade Organizations Trade Relations methods of production. of responsible application the and practices environmental better Fair Trade actively encourages The environment discloseproducers involvement the of inchildren production. andrequirements need for play. Organizations working directly with informally organised fairlyof articlestraded (if notadverselyany) does affect their well-being, security, educational laws andnorms in social toensureorder thattheparticipation of inchildren processes production Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local Child Labour law normsand in local context. the and need for play and conforms to the UN Convention on the Rights of the Child as well as the children (if notadverselyany) does affect their well-being, security, educational requirements Fair Trade means asafe andhealthy working for environment producers. The participation of Working conditions for in production theirthe contribution andareempoweredto process their organizations. Fair Trade means thatwomen’s work is properly valued andrewarded.Women are always paid Gender Equity production financing. to their partners and, whenever possible, help producers with access to pre-harvest or pre- principle of equal forpay equal by work women men.and Fair Traders ensurepayment prompt just andenvironmentally sound. Itprovides fair and producers the pay to into takes account the participation. It covers not only the costs of production but enables production which is socially A fair price in the regional or local contextis one that has been agreed through dialogue and Payment ofafair price aim for highest the standards in quality product packing.and andin conditions they made. what They are honestmarketing advertising and anduse techniques world trade. They provide their information customers with the about organization, products, the in justice of Fair Trade of Fair Tradegreater awareness andthepossibility raise Organizations PromotingFair Trade markets. tonew skills andtheir access management continuity, and during which producers marketingtheir organizations canimprove their Fair Trade is ameansdevelop to producers’ independence. Fair Trade relationships provide Capacity building and fairly respectfully with trading partners. deal to relations commercial and management transparent involves Trade Fair Transparency and accountability by the conventional trading system. who marginalized producers have for opportunities create or been disadvantaged economically Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to Creating opportunities for economically producers disadvantaged Appendix 4– 10 Principles of Fair Trade 50 CEU eTD Collection Appendix 5– Price Setting procedure in FLO 51 CEU eTD Collection Social Market-Driven Justice.”of Limits The Fetishism: Commodity and Coffee ”Fair-Trade Gavin. Fridell, Michel. Foucault, http://www.flo-cert.net/flo-cert/index.php FLO-CERT. 30, 2009) Farmers.” Kenyan on Analysis Impact An Fair TradeEffects of Producers: on “The Affiliated Constantino. Marco and Leonardo Becchetti, Wilkinson,New 103-123. York: Routledge, 2007. transforming globalizationof in Brand In and Fruit supermarkets.” Networks:Own Chocolate UK StephanieBarrientos, “Mainstreaming Sally and Smith. Fair Trade inGlobal Production Convergence?” “Fair Stephanie Smith. Barrientos, Tradeand Sally andEthical Trade: AreMoves Towards There 33, no.3 (2005): 497–511. 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Poverty Annual Report 2007 An Annual Report (accessed onMay 30, 36 (2001): 4410- 36(2001): 16 (2004): 1109– Sociologia Journal of 24, no.2 World 2 37 nd CEU eTD Collection WFTO. http://www.wfto.com/ European Worldthe SixteenthCentury Economyin Immanuel Wallerstein, Ethics Organized WithinProducers of The Perspective Fair the Trade Market.” VanderHoff Boersma, in Producers Nicaragua.” Francisco. Coffee Small Fair “Does of aDifference? Karla.TradeThe Case Make Utting-Chamorro, “The UrgencyJournal ofBusinessEthics and Necessity Fairof TradeCoffee: Impact Towardsthe Framework.” “Assessing an Utting,Karla. Integrative of a Different1978. Type of Market: Wright, Len Tiu and Simon Heaton. “Fair Trade Marketing: An Exploration through Qualitative Research.” through Exploration An Marketing: Trade “Fair Heaton. Simon and Tiu Len Wright, Tucker, Robert C, ed. 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