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Fair Trade for Whom? Fair Trade for Whom? The Contribution of Fair Trade to Combatting Trade Inequities Faced by East Timorese Coffee Producers By Kelle Howson A 120-point thesis submitted to Victoria University of Wellington, as partial fulfilment of requirements for the degree of Master of Development Studies 2014 School of Geography, Environmental and Earth Sciences Supervisor: Professor Warwick Murray i ii ABSTRACT Fair trade aims to empower smallholder agricultural producers in the global South to gain more power over their industries by the formation of transparent and democratically representative cooperatives. However, critiques of the fair trade system have emerged in ethical consumption literature, and pockets suggest that individual producer contexts have more of a role to play in determining the benefits of fair trade than had been previously understood or addressed. This work constitutes a case study designed to examine implementation and practice anomalies within the Timorese fair trade certified coffee industry, and the ways in which they impact on producers’ livelihoods and development. A mixed methods approach is deployed to analyse the coffee cooperative Cooperativa Café Timor, and the producers who sell to it. It finds the cooperative to be subject to a number of external pressures that prevent it from passing on the benefits of fair trade certification to farmers. Governance practices in terms of transparency and grassroots representation are found to be significantly hindered by reliance on outside organisations for market access. Also, producers are found to remain superficially represented within commodity chains; having little or no access to value-added income. The involvement of American private enterprise within the East Timorese fair trade system has served to distance the fair trade cooperative from its grassroots, and acts as somewhat of a barrier to democratic management, participatory decision-making, and the realisation of the objectives of fair trade. iii ACKNOWLEDGEMENTS This thesis owes its existence to a number of outstanding humans. Colleagues, mentors, friends, family and strangers have contributed immensely not only to the realisation of the project, but to the preservation of my sanity throughout the process. To my supervisor, Professor Warwick Murray; a source of wisdom, advice, and inspiration: Your sometimes musical, always reassuring guidance has sustained me through many moments of self-doubt. I am also grateful to other academic and administrative staff in the school of Geography, Environment and Earth Sciences: John Overton, who stoked my passion for Development Studies in the first year of my Master’s degree, and was always available as a back-up supervisor in the second, and Patricia Stein and Kate King, who put out administrative fires with kindness and patience. I am indebted to a number of friends in Timor-Leste, for taking a lonely researcher under their wing, and helping extensively despite the fact I could offer little for their efforts. To all interview participants, who gave up their valuable time, mid-harvest, to patiently and openly answer (what must have seemed like many) questions, I am very grateful. As I am to Julio Goncalves – whose readiness to assist was unlimited; be it in connecting me with key contacts, or showing me the best local dinner spots. To Pedro Soares, my translator and guide, and my friend - whose biggest ambition is to become a teacher to help children in his district to access precious education, and who has overcome adversity in the form of poverty and wartime atrocity to pursue it: Your generosity in accompanying me to research sites, interpreting for me, and offering me your family’s hospitality was overwhelming. I wish you the absolute best of luck in your remaining studies. I am thankful to my family, who are regrettably well experienced in dealing with deadline-panic, and nodding along with endless rants about political economics or commodity chains. I owe my curiosity and social conscience to my parents, John and Anna, and their journalistic tendencies. I am also lucky to have a sister who knows the exact right time to make flowers appear on my desk – thank you Megan. iv To my Grandma Barbara, who was two months shy of seeing the finished product: The wish to make you proud kept me writing through a difficult time. Of all those who helped to make my thesis happen, Frank is the one who shared in the experience of the day-to-day challenges of undertaking such a project. It has required a generous soul to bear witness to the frustrations of my thesis – your soul is top-notch. I suspect you know the material in almost as much detail as I do. v LIST OF ACRONYMS CCT ..................................................................................................... Cooperativa Café Timor CIA .............................................................................................. Central Intelligence Agency COCAR ..........................................Consolidating Cooperative Agribusiness Recovery EFTA ............................................................................... European Fair Trade Association FINE ................................................................................................... FLO, IFAT, NEWS, EFTA FLO ..................................................... Fairtrade Labelling Organisations International FLO-CERT .............................. Fairtrade Labelling Organisations Certification Body FT .................................................................................................................................. Fair Trade GDP ................................................................................................... Gross Domestic Product HDI ............................................................................................. Human Development Index IFAT ...................... International Federation of Alternative Traders (Now WFTO) LDC ..................................................................................................Least Developed Country MAF....................................................................... Ministry of Agriculture and Fisheries1 MCE-A ................................................... Movimento Cooperativa Economica – Agricola MFAT ..................................................................... Ministry of Foreign Affairs and Trade NCBA .......................................................... National Cooperative Business Association NCBA CLUSA ............ NCBA Cooperative League of the United States of America NEWS ......................................................................... Network of European World Shops NZAP ..................................................................................... New Zealand Aid Programme SIDS..................................................................................... Small Island Developing States TERADP ........................ Timor Economic Rehabilitation and Development Project UN ........................................................................................................................ United Nations USAID ...................................... United States Agency for International Development WB ............................................................................................................................. World Bank 1 For the purposes of this thesis, this term refers to the Timorese Ministry of Agriculture and Fisheries. vi WFTO ................................................................................ World Fair Trade Organisation vii TABLE OF CONTENTS Abstract ........................................................................................................................... iii Acknowledgements .................................................................................................... iv List of Acronyms .......................................................................................................... vi Table of Figures ............................................................................................................ xi 1. Introduction ................................................................................................................... - 1 - 2. Background to Fair Trade: Growth of a Movement, and Current Critiques- 11 - 2.1 The Scope of Fair Trade .......................................................................................... - 12 - 2.2 The Evolution of Fair Trade .................................................................................. - 15 - 2.2a Religious Roots ............................................................................................ - 15 - 2.2b Political Roots .............................................................................................. - 15 - 2.2c The Role of Coffee ....................................................................................... - 16 - 2.2d The Rise of the Ethical Consumer ........................................................ - 18 - 2.3 Labels and Certifications ........................................................................................ - 19 - 2.4 Critiques of Fair Trade............................................................................................. - 20 - 2.4a Barriers to Participation .......................................................................... - 21 - 2.4b Mainstreaming/Institutionalisation ................................................... - 24 - 2.4c
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