J Agric Environ Ethics (2016) 29:185–201 DOI 10.1007/s10806-016-9604-0

ARTICLES

A Role of Certification for Environmental

Rie Makita1

Accepted: 10 December 2015 / Published online: 23 January 2016 Ó Springer +Business Media Dordrecht 2016

Abstract Although most studies on the Fair Trade initiative are, to some extent, cognizant of its contribution to environmental sustainability, what the environ- mental aspect means to Fair Trade has not yet been explored fully. A review of in the Fair Trade literature suggests that Fair Trade might influence participant producers’ farming practices even if it does not directly impact natural resources. This paper attempts to interpret Fair Trade certification as an intermediary institution that links two significant objectives of rural development in the global South—environmental conservation and poverty reduction. This theo- retical concept is examined in different real settings by observing four cases of Southern small farmer groups involved in the Fair Trade initiative. Findings from these case studies imply that if Fair Trade certification ensures tangible benefits for small farmers, it can not only help such disadvantaged farmers but also work as an approach for management.

Keywords Certification Á Environmental sustainability Á Fair Trade Á Organic Á Small farmers

Abbreviations ADB Asian Development Bank AOFG Agriculture and Organic Farming Group India ATC Alter Trade Corporation ATFI Alter Trade Foundation Incorporated Bt Bacillus thuringiensis FLO Fairtrade International

& Rie Makita [email protected]

1 Graduate School of Social Design Studies, Rikkyo University, Toshima-ku, Tokyo, Japan 123 186 R. Makita

GM Genetically modified IFOAM International Federation of Organic Agriculture Movements NGO Non-governmental Organization WFTO World Fair Trade Organization

Introduction

While the Fair Trade initiative in the agricultural sector has been regarded primarily as an intervention for helping disadvantaged producers in the global South (e.g., Paul 2005), it also aims to contribute to environmental conservation.1 A Charter of Fair Trade Principles (WFTO and FLO 2009, p. 4) states that Fair Trade is designed to ‘‘[contribute] to by offering better trading conditions to, and securing the rights of, marginalized producers and workers— especially in the South.’’ The terminology ‘‘sustainable development’’ used here connotes environmental, social, and economic sustainability (e.g., WCED 1987). In addition to social and economic sustainability (the better-known aspects of Fair Trade), the same Charter clearly refers to environmental sustainability as follows: All parties to Fair Trade relationships collaborate on continual improvement on the environmental impact of production and trade through efficient use of raw materials from sustainable sources, reducing use of energy from non- renewable sources, and improving . Adoption of organic production processes in agriculture (over time and subject to local conditions) is encouraged (WFTO and FLO 2009, p. 10). Although environmental conservation is not central to Fair Trade, it is an important aspect of Fair Trade. In brief, under the Fair Trade initiative, participant producers are expected to contribute to environmental conservation as well as to increase their income and communal assets. In Fair Trade-related studies, in contrast to the heavy focus on Fair Trade’s economic and social aspects, attention to its environmental aspect has been scant. After reviewing the Fair Trade literature, Blackman and Rivera (2011) conclude that no rigorous studies have been conducted on environmental effects and that moderately rigorous studies did not reveal any strong correlation between Fair Trade certification and environmental benefits. This conclusion may be a matter of course, given that Fair Trade is not directly aimed at environmental conservation. Before arguing about the environmental impact of Fair Trade, we should note that what the environmental aspect means to the Fair Trade initiative remains an unanswered question. Is the environmental aspect simply a gesture for going along with the prevailing world opinion? Or does the concept of Fair Trade originally comprehend environmental sustainability in it?

1 In this paper, ‘‘Fairtrade,’’ implemented by Fairtrade International (headquartered in Germany), is distinct from ‘‘Fair Trade,’’ a general term including other similar programs. The term ‘‘Fairtrade’’ is confined to cases in which the certification is clearly identified as Fairtrade. 123 A Role of Fair Trade Certification for Environmental… 187

To explore the meaning of Fair Trade’s environmental aspect, this paper first reviews how existing Fair Trade studies have dealt with environmental issues in relation to Fair Trade. Further, the paper attempts to conceptualize the role of Fair Trade certification with regard to environmental sustainability on the part of producers. This theoretical concept is then compared with the perceptions of real producers in the South.

Environmental Issues in Fair Trade Narratives

Although most Fair Trade studies have not focused on its contribution to environmental sustainability, few studies deny its environmental impact. Only two studies (Elder et al. 2013; Philpott et al. 2007) failed to identify significant differences in environmental impact, such as shade management and species richness of ants and birds, between Fair Trade–organic certified and uncertified coffee farms. The other studies have, to some extent, referred to positive environmental effects of Fair Trade certification.

Benefit of Fair Trade Certification on the Environment

Some authors report that certified producer groups practice environmentally better farming. In the case of a Fair Trade cooperative in Chiapas, , the vast majority of members, unlike capitalist large-scale producers, were committed to traditional shade-grown systems and organic production, which was evaluated as a ‘‘much more environmentally benign system of agriculture’’ (Hudson and Hudson 2003, p. 422, 2004). Utting (2009, p. 138) observed that Fair Trade coffee producers in Nicaragua demonstrated a strong commitment to environmental sustainability from a long-term perspective and were encouraged to move toward organic production. Behind this were the efforts of their cooperative union in conducting environmental workshops. In the banana sector, Frundt (2009, pp. 78–82) described how ‘‘FLO (Fairtrade International) rules offer[ed] a much healthier alternative to corporate banana production.’’ Raynolds (2012) also suggested that Fair Trade certification helped the flower production industry improve its ecological and human impact in , particularly in addressing pesticide-related worker health and safety issues. These environmentally good results may be regarded as outcomes of the environmental components of Fair Trade standards. In addition, the Fairtrade premium, a tangible benefit of Fairtrade for producers, can support certified cooperatives’ environmental efforts. In Ronchi’s (2002) case study of three Fairtrade-certified cooperatives in Costa Rica, the adoption of ‘‘Clean Technology’’ by cooperative members and other environmental improvements were largely funded by Fairtrade premiums (p. 17).

Combination with Other Certifications

Given that Fair Trade certification is, in many cases, combined with other certifications, the environmental component of Fair Trade is not clearly 123 188 R. Makita differentiated from the impact of other environment-oriented certifications.2 Seven case studies conducted by Taylor (2002) revealed that most study cooperatives were pursuing multiple certifications, including Fairtrade, Organic, Shade, Bird-Friendly and Eco-OK labels, and that three of them had obtained Fairtrade certification before organic certification (pp. 13–14). Two cotton producing cooperatives, one in Kyrgyzstan (Bachmann 2011) and another in India (Makita 2012), also obtained Fairtrade certifications while pursuing organic certifications. Although these farmers who attempted to convert into organics perceived positive impacts of organic farming on the fertility and water-holding capacity of their soils (Bachmann 2011, p. 144), it is difficult to regard these as benefits solely from Fairtrade. Bachmann (2011, p. 145) views ‘‘guaranteed sales of organic cotton for a higher, fixed price (organic plus fair trade premium)’’ as one of the important incentives to the adoption of organic farming. In the case of Ecuadorian bananas, Fairtrade-certified small farms exhibited relatively comprehensive environmental management systems (Melo and Wolf 2007), but 20 % of these farms were also certified organic (p. 263), and another certification called EUREPGAP ‘‘[was] layered on top of Fairtrade certification and [was] administered by an association of European supermarkets concerned about food safety’’ (p. 270). Likewise, environmental benefits from Fair Trade, identified by Taylor (2002, p. 24), such as improvements from organic production, , water management, and the maintenance of species diversity for shade coffee plantings, may have derived from other certifications. When combined with other certifications, Fair Trade may enhance ecological benefits from other certifications. In the case study of Jaffee (2007, 2008) in Mexico, Fair Trade–organic double-certified cooperative members received some training in organic or shade management. As a result, there was more widespread use of soil- conservation, soil-fertility, and water-protection methods among certified producers in the area (Jaffee 2007, pp. 154–156). Although these environmental improvements may be the effect of organic rather than Fair Trade certification, Jaffee (2007) argues that ‘‘fair trade can play a crucial role in sustaining organic and shade-grown coffee—and the ecological benefits it provides—during periods of low prices; … [only] because of the minimum fair-trade price does sustainable coffee production continue to pay during such a crisis’’ (p. 160). Fair Trade may be able to contribute to environmental protection through the mechanism of guaranteed minimum prices. However, Valkila (2009) has a different view based on his case study in Nicaragua and emphasized the organic nature of double-certified coffee: farmers are attracted to organic coffee prices, which are stable compared with the conventional coffee prices (p. 3024). If ‘‘farmers in Fair Trade-certified cooperatives do not know about [the] requirements of Fair Trade to farmers [and in] contrast, organically certified farmers are well aware on organic regulations’’ as Valkila (2009, p. 3020) notes, Fair Trade may contribute to environmental sustainability only with assistance from environmental certification.

2 For instance, 83 % of certified Fair Trade coffee imported to the United States in 2002 was also certified organic (Lewin et al. 2004, p. 123). According to Mendez et al. (2010), Fair Trade–organic double certification has proven more ‘‘effective than single certification in supporting capacity building and in serving as networks that leverage global development funding for small-scale coffee-producing households’’ (p. 248). 123 A Role of Fair Trade Certification for Environmental… 189

Demonstration Effects

Some authors note the demonstration effect of practices adopted by Fair Trade producers in the diffusion of organic and other sustainable farming technologies, although the effect derives from Fair Trade–organic, but not inorganic, certification. In most cases, the demonstration effect concerns non-Fair Trade producers, who can observe the outcome of neighboring certified cooperatives. Jaffee (2007) reveals that Fair Trade producers create an important demonstration effect that spreads ecologically beneficial practices to conventional producer families in the same area: [T]hree techniques in particular—producing compost and applying it to coffee plots, establishing live-plant barriers, and building terraces—have been adopted by almost half of the conventional farmers, even though they are not required to do so and have no immediate prospects for organic certification (p. 155). Demonstrating one of the positive effects of Fairtrade cotton programs in West Africa, Bassett (2010, pp. 52–53) also notes the diffusion of organic agricultural soil management and pest control techniques adopted by conventional cotton growers. This view is also supported by Balineau’s (2013) quantitative analysis of Malian cotton growers. In the banana sector, Frundt (2009) reports that while small producers and workers enhanced their environmental consciousness in pursuing FLO’s ecological requirements, ‘‘[i]n dialectical interplay, this enhancement motivated further improvements at [transnational corporations such as] Chiquita, Dole [and] Del Monte, and among independent producers’’ (p. 82). Furthermore, such demonstration effects may appear beyond the boundary of a certified crop. Jaffee (2008) observed that roughly half of the Fair Trade coffee producers in his Mexican study cooperative applied ‘‘their painstakingly prepared compost onto their maize and beans as well as their coffee’’ (p. 212). In another attempt to produce and export Fairtrade and organic coffee in South India, the majority of trained farmers preferred to sell organic vegetables and local nuts rather than coffee (Makita 2011, p. 215). Fair Trade (with organic certification) may allow certified farmer groups not only to expect short-term financial benefits but also to hold a more optimistic vision of a viable future in agricultural production.

Partnership with Other Environmental Organizations

Even if the environmental aspect of Fair Trade by itself does not work sufficiently, it may be reinforced in collaboration with environmental non-governmental organiza- tions (NGOs). For instance, for Fair Trade coffee producer cooperatives in Costa Rica, the environmental impacts of their activities were highly evaluated, and most activities for environmental protection ‘‘emerged through a judicious range of partnerships with other environmental organizations’’ (Ronchi 2002, p. 20). In another case, in Mexico, a research and environmental NGO in Oaxaca City supported the Fair Trade coffee cooperative by ‘‘conduct[ing] workshops for farmers about maintaining and diversifying their shade-tree cover’’ (Jaffee 2007, p. 154). Those organizations specializing in environmental education programs may regard 123 190 R. Makita

Fair Trade certification—more convincingly, Fair Trade and organic certifications— as an effective tool for enhancing farmers’ consciousness of environmental issues.

A Theoretical Proposition: Fair Trade as an Institution for Linking Conservation and Poverty Reduction3

Even if we cannot measure the impact of Fair Trade certification on environmental conservation, the existing literature suggests that Fair Trade certification, in general, encourages certified producer groups to adopt sustainable production practices. In other words, most Fair Trade studies seem to be concerned not with how Fair Trade certification influences local natural resources but with how Fair Trade certification influences producers’ farming practices. As denoted by A Charter of Fair Trade Principles (see ‘‘Introduction’’ section), the Fair Trade initiative requires producers (and traders) to change their customary practices into more environment-friendly ones through environmental standards for certification. If sustainable production practices are used as a requirement for Fair Trade certification, participant producers may regard environmental requirements as a means to better income. How can we interpret the fact that Fair Trade deals with both economic and environmental issues? Although poverty reduction and environmental conservation are two crucial objectives of rural development in the South, how both objectives should be simultaneously realized remains an open question (Sanderson 2005). As a guideline for tackling this question, Adams et al. (2010) offer a conceptual typology of the relationships between poverty reduction and conservation, presenting ‘‘four different ways of looking at the connections and disconnections between poverty reduction and conservation:

(1) Poverty and conservation are separate policy realms; (2) Poverty is a critical constraint on conservation; (3) Conservation should not compromise poverty reduction; and (4) Poverty reduction depends on living resource conservation’’ (p. 21).

Fair Trade’s approach is obviously different from position (1), which is usually adopted to guarantee the maintenance of populations of vulnerable species (Adams et al. 2010). In positions (2) and (3), conservation is the primary goal. Poverty reduction would be undertaken in position (2) ‘‘simply as a means to achieve more effective conservation’’ (Adams et al. 2010, p. 22), while position (3) gives less priority to poverty reduction. As long as Fair Trade aims to offer ‘‘better trading conditions to, and securing the rights of, marginalized producers and workers’’ (WFTO and FLO 2009, p. 4), these two positions would not apply to the case of Fair Trade. The final position (4), in contrast to position (2), sees ‘‘conservation strategies based on the sustainable use [of natural resources] primarily as a means

3 Following Leach et al. (1999, p. 226), in this paper, institutions mean ‘‘mediators of people- environment relations’’ and ‘‘regularized patterns of behavior between individuals and groups in society rather than … community-level organizations.’’ 123 A Role of Fair Trade Certification for Environmental… 191

Relationship Means Institution End

Environmental Poverty Expected policy Fair Trade conservation reduction

Expected perception Sustainable Better income of producers production Fair Trade and other practices benefits

Fig. 1 Concept of an intermediary institution

[italics added] to reduce poverty’’ (Adams et al. 2010, p. 24). Although the Fair Trade initiative itself is not recognized as a ‘‘conservation strategy,’’ by incorporating environmental standards, it can play the role of an intermediary institution, linking poverty reduction and ‘‘living resource conservation.’’ From the perspective of environmental sustainability, Fair Trade may adopt position (4) and attempt to promote ‘‘the sustainable use of natural resources being a foundation of strategies for achieving poverty reduction and ’’ (Adams et al. 2010, p. 23). As Fig. 1 summarizes, Fair Trade can be interpreted as an institution linking environmental conservation and poverty reduction at the policy level, and sustainable production practices and better income (and other benefits) at the producer level. Through Fair Trade, environmental conservation can be a means of poverty reduction, which is the end. In position (4), as Adams et al. (2010, p. 23) argue, environmental benefits are ‘‘a secondary gain.’’ ‘‘Conservation in response to this position tends toward the maintenance of … rather than the preservation of biodiversity’’ (Adams et al. 2010, p. 23). It is, therefore, difficult to measure the impact of Fair Trade and other schemes adopting this position. This may be a reason why Blackman and Rivera (2011) concluded that no strong correlation was revealed between Fair Trade certification and environmental benefits. When a Fair Trade certification is introduced, do participant producers regard compliance with environmental standards as a means to poverty reduction, namely, an increase in income? In the next section, I examine the relevancy of the theoretical concept of intermediary institution in some real settings. More specifically, I observe which factors motivate (or do not motivate) producers to adopt organic and other sustainable practices. As the literature review in the second section suggests, producers’ perceptions about the environmental aspect of Fair Trade are influenced by organic and other environmental certifications combined with Fair Trade certification. In the case of double certification, producers respond to environmental standards required by organic certification, which may automatically result in compliance with Fair Trade’s environmental standards. The objective here is not to clarify factors ascribed solely to Fair Trade certification but to understand the realities of environmental sustainability designed by Fair Trade.

123 192 R. Makita

Table 1 Outline of the case studies Place Certification Fair Time of data Focus Original Trade collection producer group sources product

Case 1 Kerala, India Not yet Coffee November– One group (13 Makita (2011) certified December members) 2008 Case 2 Andhra Fairtrade Cotton February– Three groups in Makita (2012) Pradesha, March one village (35 India 2011 members) Case 3 Negros, the Organic and Sugar July–August One association Makita Philippines Fairtrade 2011 (73 members) (forthcoming) Case 4 Same as Fairtrade Same as February Another Unpublished Case 3 Case 3 2015 association (43 members) a The fieldwork site currently belongs to the state of Telangana

Southern Producers’ Perception

In this section, I illustrate how producers in the South react to environmental requirements from Fairtrade certification by reworking case studies originally conducted with other different research questions. The outline of the case studies is summarized in Table 1.

Case 1: Pursuing Both Fairtrade and Organic Certifications

Background

A project led by an Indian NGO called Agriculture and Organic Farming Group India (AOFG) aimed to organize small farmers who own fewer than five acres in highland Kerala in South India into an association. The goal of the small farmers’ association was to export its certified crops to foreign Fairtrade–organic markets. When I visited the project site in November 2008, it had been seven months since the official establishment of the association. With 10–15 farmers per group, 52 groups had already been formed. Most members were categorized below the national poverty line. Member farmers cultivated a wide range of crops, including coffee, rubber, cocoa, pepper, ginger, nutmeg, tapioca, and banana, in small plots of steep land. Under the project, AOFG encouraged the members of the association to obtain both organic and Fairtrade certifications. AOFG regarded export to Fairtrade markets in the global North as a tangible benefit of organic farming. In agreement with the above-mentioned proposition (Fig. 1), organic farming was used as a means to the better income expected from Fairtrade markets. AOFG, on one hand, promoted organic farming by introducing a bio-fertilizer to association members. On the other hand, the NGO facilitated member farmers’ production of export- quality coffee. The primary intervention of organic farming was the introduction of a bio-fertilizer—cheaper than chemicals—to the members of the association.

123 A Role of Fair Trade Certification for Environmental… 193

Appointed members took charge of producing the completely concentrated bio- fertilizer, which then was distributed to all members wishing to buy it. Member farmers had only to dilute the liquid with water before applying it to crops, within 24 h. For coffee, which had traditionally been a cash crop in highland Kerala, AOFG established a large drying space and a primary processing facility at the project site, nurtured seedlings of a specific variety suitable for the selected processing method, and distributed them to member farmers at a subsidized price. To show the benefit of pursuing Fairtrade–organic certifications, AOFG purchased fresh ripe coffee berries from members at a higher-than-market price and sold collected coffee to a local non-organic market.

Adoption of Environment-Friendly Practices Under Fair Trade

Most members smoothly accepted the introduced bio-fertilizer and other organic practices. At the start of the project, some members depended on chemical fertilizers, whereas some were traditionally organic farmers relying only on locally available manures. Although subsistence farmers were not so keen on investing in farming, i.e., increasing production with chemicals or improving soil fertility, they were not satisfied with traditional natural farming as well. Some were worried about crop diseases. Therefore, for most members of the association, the new organic method was a preferable way of improving their farming at a cost lower than that required for chemicals. During the conversion period, however, focus put on coffee for the acquisition of Fairtrade certification was not appealing to the majority of association members, and three major reasons were revealed. First, to maintain their modest living, small and marginal farmers gave priority to ensuring an income throughout a year, planting a variety of crops with different harvest periods, rather than to maximizing annual income. A very marginal member of the association, owning only 0.5 acres in total, expressed his ambivalence: It is attractive to sell coffee to AOFG at the higher-than-market price, but in such tiny plots of my land, there is no more space for increasing coffee bushes. Coffee brings income only once a year. I do not want to decrease space for other crops (Makita 2011, p. 211). Second, some members were not able to sell any coffee berries to AOFG because coffee was their only asset through which they could gain cash. When they needed a large amount of cash urgently—for the payment of medical bills or dowries for their daughters’ marriages—they leased out coffee bushes to local traders before the harvest season. Third, many members’ interest seemed to have shifted from coffee to rubber as a new alternative cash crop. Before AOFG’s intervention in coffee, the world coffee price remained very low until 2004. During this crisis period, many farmers in this area reduced their coffee bushes and planted new rubber seedlings. The good producer price of rubber (as of December 2008) allowed them to look to future profits. Rubber also was attractive because it generated income all year round. As a result, AOFG failed to collect a sufficient volume of coffee from the association to export to future Fairtrade markets. 123 194 R. Makita

Role of Fair Trade Certification

In Case 1, Fair Trade did not work as an intermediary institution. Although potential access to new sales opportunities through Fairtrade and organic certification enabled association members to pay attention to organic farming, focus on a specific cash crop for Fairtrade certification did not accelerate their environment-friendly practices. Members of the association adopted environment-friendly practices not as a means to increase their income through Fairtrade certification but because the introduced organic practices were simply in harmony with their subsistence farming, which was associated with few inputs in the nature and diversity of their crops.

Case 2: Becoming Certified as Fairtrade Before Pursuing Organic

Background

Despite having the largest area under cotton cultivation in the world, India is known for its low productivity because of severe pest ravages and predominant cultivation under rain-fed conditions (Narayanamoorthy and Kalamkar 2006, p. 2716). The inevitable use of pesticides not only increases the financial burdens of farmers but also creates health hazards and environmental risks; these financial burdens are related to the high incidence of poor farmers’ suicides in cotton-growing areas (Patil 2002). Introduction of genetically modified (GM) or Bacillus thuringiensis (Bt) seeds was expected to improve this situation. The use of Bt seeds has spread rapidly; in 2010, Bt cotton was estimated to cover 86 % of India’s cotton area. In general, Bt cotton has brought benefits such as higher crop yield, reduction in pesticide use, more employment, and better wages for laborers (Qaim 2010; Subramanian and Qaim 2010); however, the introduction of Bt seeds has been criticized to the extent that it has aroused anti-GM organism movements worldwide (e.g., Herring 2005). As another countermeasure against the indiscriminate use of pesticides, AOFG, introduced organic farming to small cotton farmers in Andhra Pradesh, which was one of three major cotton-producing states of India,4 and attempted to link such small farmers with Northern markets through Fairtrade and organic certifications. AOFG’s attempt to convert cotton producers to organic cultivation began in 2006; 2700 small farmers were organized into eight clusters of an association, primarily for obtaining Fairtrade and organic certifications (as of December 2010). During the conversion period, the association was certified as Fairtrade in 2007.

Adoption of Environment-Friendly Practices Under Fair Trade

When member farmers joined the association, the organic price premium to be delivered at the farm gate strongly motivated them to practice organic cotton cultivation with non-Bt seeds. However, more than half of the members failed to continue organic cotton cultivation. Fairtrade certification did not work as an

4 In 2014, the state of Andhra Pradesh was divided into two states: Telangana and Andhra Pradesh. The project site was located in the current state of Telangana. 123 A Role of Fair Trade Certification for Environmental… 195 incentive for members of the association to continue organic practices. Because local market prices of cotton remained fairly high after they joined the association, members never had an opportunity to enjoy the benefit of a minimum price guaranteed by Fairtrade. When the Fairtrade price was same as the local market price for conventional cotton, the member producers did not have any reason to continue organic cultivation. Although under Fairtrade certification, members gradually returned to conven- tional cotton cultivation with Bt seeds, they simultaneously valued organic farming for its positive impact on the soil and farmer health, and reduced production costs. Organic farming itself was nothing new to association members or non-member farmers in the locality. Local farmers had traditionally cultivated food crops such as sorghum and vegetables organically. After cotton emerged as a new cash crop, they only began to apply chemical fertilizers for cotton and red gram (pigeon peas), planted with cotton as a refuge crop in the same plot. Although they continued to cultivate other food crops organically, they did not apply the ecological value of organic farming to their important cash crop. Organic certifications clearly ban the use of Bt seeds (IFOAM 2007). The Fairtrade standard also prohibits Fairtrade-certified producer organizations from using GM seeds, but not as definitively as organic certifications do (Fairtrade Foundation 2011). This slight but significant difference between the two initiatives may have allowed members of the association to relinquish sustainable production practices. Because local input-trading shops that members could access dealt with Bt seeds only, AOFG arranged the distribution of non-Bt seeds exclusively for members’ organic cotton cultivation. Fairtrade premiums were, first of all, used as interest-free loans for purchasing non-Bt seeds for organic cultivation. The payment for production inputs at the beginning of each season was usually a financial burden on small and marginal farmers. Poor farmers tended to buy seeds on credit, which increased their indebtedness. Therefore, member farmers welcomed the cashless purchase of cotton seeds through AOFG, repaying the loan after harvest. Fairtrade premiums were originally used for promoting organic cultivation, but ironically, this tentative financial surplus enabled the members to purchase Bt seeds in cash. In local shops, there were two different prices for a single packet of Bt seeds, one for cash and one for credit—for instance, 700 rupees in cash and 750 rupees on credit. Most member farmers started organic cotton cultivation in parallel with conventional cultivation, planting both Bt and non-Bt seeds. They purchased Bt seeds from a local shop in cash and non-Bt seeds from the NGO on credit without interest. In other words, the interest- free loans from Fairtrade premiums enabled members to obtain Bt seeds on a cheaper price than before. Fairtrade certification did not only facilitate organic cultivation but may have paradoxically supported the increase of Bt cotton.

Role of Fair Trade Certification

In Case 2, unsustainable production practices (conventional cultivation with Bt seeds) worked as a means to better income more effectively than did sustainable production practices (organic cultivation with non-Bt seeds). This case suggests that small farmers might have different perceptions about environmental conservation 123 196 R. Makita for food crops and conservation for cash crops. The economic value for cash crops such as cotton is liable to surpass its ecological value. When a competing means to better income such as Bt cotton exists, the introduction of Fair Trade may lead to a negative environmental impact. In such a case, Fair Trade cannot be termed an intermediary institution.

Case 3: Certified as Organic and Later as Fairtrade

Background

In the Philippines, well known for its strong association between rural poverty and inequality of land ownership, remains an important agrarian issue (Asian Development Bank 2009, pp. 46–47). Although earlier land reform programs were primarily limited to rice and corn fields, the latest program promulgated in 1988 was the first to extend farmland ownership to landless sugarcane plantation workers (Billing 1993, p. 130). As the country’s largest non-cereal crop in terms of planted area, sugarcane has long played an important role in the Philippine economy (World Bank 2009, pp. 24–25). As expected in the face of strong resistance by plantation owners, the government was compelled to assign low priority to the redistribution of sugarcane lands. By 2005, only 61 % of the targeted land had been redistributed in Negros Occidental, one of the two provinces in the island of Negros that produced about two-thirds of the country’s total sugarcane. To improve land reform outcomes, some NGOs have been working to develop farms on redistributed lands. Land reform is a long and money-consuming process: land reform beneficiaries need to pay lease fees until they obtain official ownership certificates, after which they also need to amortize acquisition fees. One of these local NGOs had supported associations of former plantation workers in Negros Occidental with organic and Fairtrade certifications. The NGO Alter Trade Foundation Inc. (ATFI) provided technical assistance and production loans for 14 associations, and its associated company Alter Trade Corporation (ATC) purchased sugarcane from these associations and exported traditional brown muscovado sugar to Fairtrade and other ethical markets in wealthy consumer countries in Europe and Northeast Asia (as of August 2011). Unlike many cooperatives formed by individual land reform beneficiaries that were eventually disbanded, those under the auspices of ATFI and ATC continued to cultivate sugarcane collectively to maintain the economies of scale in former plantations. ATFI guided the associations to add organic value to their sugarcane production. The associations were certified as organic through ATC in 1995 and as Fairtrade directly in 2004. Their organic sugar had been exported through ATC since 1995.

Adoption of Environment-Friendly Practices Under Fair Trade

As Cases 1 and 2 and other cases from the global South (Eyhorn 2007, pp. 141–144; Gomez Tovar et al. 2005) show, it is usually difficult for small farmers or landowners to obtain organic certification that is not designed for ‘‘disadvantaged producers.’’ However, these associations were not confronted with substantial 123 A Role of Fair Trade Certification for Environmental… 197 difficulties in converting from conventional to organic farming. When association members were once employed by plantations, as workers they were ordered to use chemical fertilizers and pesticides, but they did not have to pay attention to plantation yields. Only after land was distributed to them did they begin independent sugarcane cultivation. Although yields from the same plots of land may have decreased, it was impossible for association members to compare the productivity of conventional farming on the plantations with organic farming on their own communal land. They accepted and continued organic practices easily, simply appreciating the opportunity to export to Northern organic markets.

Role of Fair Trade Certification

The associations of former plantation workers were certified as organic long before obtaining Fairtrade certification. Therefore, in Case 3, organic certification played the role of an intermediary institution and benefits from Fairtrade were an addition to those obtained from organic certification. Fairtrade certification reinforced the intermediary role of organic certification.

Case 4: Certified as Fairtrade After Losing Access to the Market

Background

In 2012, the long-lasting partnership between ATFI and ATC (in Case 3) came to an end. The 14 associations of land reform beneficiaries were unfortunately divided into two groups, with each group allied either to ATFI or to ATC. The nine associations that chose ATFI automatically lost opportunities to export to Northern ethical markets through ATC. Although certified as Fairtrade, these associations sold their sugarcane to local conventional markets after the separation of ATFI and ATC. In other words, they did not benefit from Fairtrade certification for more than two years. When I had a meeting with the ATFI-supported associations in February 2015, they informed me of their plan to process raw sugar by themselves and to export their processed products to Fairtrade markets, although it would take them a couple of months to put the plan into practice. After losing the link with Fairtrade–organic markets, what happened to the farming practices of association members? My observation focused on one of the nine associations. This association comprising 43 members had operated 39 ha of farmland collaboratively (as of February 2015). Sugarcane was cultivated on 37.5 ha, whereas 1.5 ha were allocated to paddy farming.

Adoption of Environment-Friendly Practices Under Fair Trade

When the focus association sold its sugarcane to ATC, the entire farmland was maintained to be completely organic. However, after losing access to Fairtrade– organic markets, they adopted the so called practice of ‘‘mix farming’’: 75 % of the fertilizer they used was organic, and 25 % was chemical. ATFI recommended this ratio of composition to its partner associations, and most of the associations decided 123 198 R. Makita to follow this advice. Given that local markets do not differentiate organic products from non-organics, it is not surprising that the associations started using chemical fertilizers and pesticides again to increase their harvest and to sell as much as possible to local markets (milling factories). It is worth noting here that the focus association and all the others have continued to use, at least in part, the organic fertilizer that was introduced under the organic certification program. I have witnessed that some members in charge took great care of vermicompost, which they had learned from ATFI. While selling to Fairtrade– organic markets, association members learned the real merits of organic cultivation, especially its good influence on soils and lower production costs. They intend to export sugar products to Faritrade markets again in the near future. They also believe that the upkeep of ‘‘mix farming’’ will allow them to easily convert the association’s farmland again to be purely organic, when they pursue organic certification in the future. In Case 4, sustainable farming practices that producers had acquired under Fairtrade and organic certifications did not disappear completely, even after they lost benefits from these certifications.

Role of Fair Trade Certification

In Case 4, although at present Fairtrade certification does not link sustainable production practices with any tangible benefit from the certification, it still links potential environmentally better practices with future benefits. The past experience of association members in certification-supported farming seems to enable Fairtrade certification to take on an intermediary role. Fairtrade certification, even without organic certification, may be able to help producers maintain sustainable farming practices.

Discussion and Conclusion

Although most of the existing Fair Trade studies are, to some extent, cognizant of its contribution to environmental sustainability, the environmental role of the Fair Trade initiative has not yet been explored fully. Shedding light on the environmental aspect of Fair Trade, this paper has attempted to interpret Fair Trade certification as an intermediary institution linking environmental conservation and poverty reduction—the two significant objectives of rural development in the global South. Four cases of Fairtrade certification at the producer level were reviewed to examine this theoretical proposition in real settings. As a result, Fair Trade does not successfully play the role of an intermediary institution in any of these cases, each with a distinct context. In Cases 1 and 2, Fairtrade certification failed to bring about better income and other significant benefits to participant producers. Such failure in terms of poverty reduction not only declines the livelihoods of producers but might also damage the natural resources upon which such livelihoods depend in the long term. However, these two cases also imply that if Fair Trade can provide producers with tangible benefits, especially higher-than-market prices for crops that producers want to sell, it might work as an 123 A Role of Fair Trade Certification for Environmental… 199 intermediary institution. The two cases further suggest that when there is a competing means to poverty reduction—such as rubber in Case 1 and Bt cotton in Case 2—a higher level of benefit will be expected from sustainable production practices under Fair Trade as a more appealing means. In contrast, Case 3 looks most applicable to the theoretical proposition, but the successful intermediary role was played more strongly by organic certification than by Fairtrade certification. Fairtrade certification might not have solely played the same role without organic certification. However, in Case 4, even after losing support from organic certification, producers partly kept sustainable farming practices only under Fairtrade certification. This Case 4 finding does not deny the potential of Fair Trade as an intermediary institution. Although the proposed proposition should be tested in different additional contexts, it provides a potential role for Fairtrade certification in environmental sustainability. The question that remains is: what advantage does Fair Trade have over organic and other environmental certifications for environmental sustainability? In moti- vating producers to adopt environment-friendly practices, organic certification seems more effective than Fair Trade certification. However, organic certification is not good at connecting small and marginal farmers with value-added markets (e.g., Gomez Tovar et al. 2005). Fair Trade certification is indispensable in linking such disadvantaged producers with specialized markets open to them. In other words, organic certification has an advantage in linking with environmental conservation, and Fair Trade certification is more essential in linking with poverty reduction. Fair Trade should be distinguished from other certifications in its ability to link environmental and economic aspects for the benefit of poorer producers. The Fair Trade initiative tends to be analyzed from the perspective of whether or not it can financially improve producers’ livelihoods. However, the significance of environmental standards for Fair Trade certification increases if Fair Trade certification is interpreted as an institution for linking environmental conservation (as the means) with poverty reduction (as the end). It is important to ensure that participant producers can tangibly benefit from Fair Trade certification, not only for the betterment of their livelihoods but also for environmental sustainability. We should take advantage of Fair Trade certification as a potential answer to how the two crucial objectives of rural development can be simultaneously realized.

Acknowledgments I acknowledge the funding supplied by KAKENHI, the Japan Society for the Promotion of Science (Nos. 24520900, 26301020), which made this research possible.

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