20 • US • C&CI March 2012
Fair Trade USA: why we parted company with FLO
A
s highlighted in the November 2011 issue of C&CI, the concluding months of 2011 were a period of
upheaval in the Fair Trade movement, with Fair Trade USA resigning as a member of Fairtrade International (FLO) and announc- ing its intention to develop a new approach which it hopes will significantly increase the volume of Fair Trade coffee Fair Trade USA’s decision has aroused mixed feelings, but as the organisation’s President and CEO, Paul Rice, told C&CI in an exclusive interview, he is in no doubt that the decision was the right one. Ironically for a man who instigated the split from FLO, who sees great differences in the Fair Trade markets in the US and Europe, Mr Rice started out in the Fair Trade movement helping farmers in Nicaragua get certified and sell their coffee to Europe. After leaving university and travelling to Nicaragua he found work with an organisa- tion that helped farmers improve crop yields through the use of irrigation techniques and pesticides. That led to other jobs with similar groups, until he heard about the Fair Trade certification movement going on in Europe.
Poverty reduction
"We were making a big mistake by ignoring the market, this whole issue of where farm- ers sell their harvest and what price they get," Mr Rice said of those times. In 1990, he organised small farmers into Nicaragua’s first Fair Trade coffee co-operative and, in his words, "saw people rise out of poverty right in front of me."
After helping the Nicaraguan co-op sell coffee to European Fair Trade buyers for four years he returned to the US, got an MBA and worked with co-operatives before he was appointed head of Fair Trade USA in 1998. Twelve years later, he decided to split from FLO.
"Our membership of FLO was largely positive," Mr Rice told C&CI, "but we came to see that the requirements of the US mar- ket were different from those that FLO serves. We wanted to maximise the impact we could have for farmers. To do that, in the
The President and CEO of Fair Trade USA says extending the
Fair Trade model to estates and smallholders will benefit many more farmers than the ‘old’ Fair Trade model, which is limited to co-operatives
Fair Trade USA says extending the Fair Trade model to estates and smallholders will benefit more farmers and their families
US market you need the quality of the prod- uct to be as high as possible. At Fair Trade USA quality is at the core of our value proposition and it became clear that, at least in the US, Fair Trade coffee didn’t always have a reputation for quality."
Extending the
business model The other major issue that Fair Trade USA had with FLO was that it wanted to extend FLO’s coffee ‘business model’ to farmers of all kinds – not just those who were part of a co-operative. Traditionally, FLO has only extended Fair Trade certification to co-ops. "In the US market, I think it’s irrelevant to stakeholders whether a farmer is a member of a co-operative or a smallholder or an estate," Mr Rice told C&CI. "Why should the Fair Trade model be limited to coffee co- operatives when we know that in other mar- kets such as flowers and bananas thou-
sands of farmers who are not in co-ops have been helped?" "In its old form, Fair Trade principles were applied inconsistently. For some product categories, like coffee, Fair Trade certifica- tion was limited to co-ops, while in other categories, like bananas and tea, workers on large farms can become certified," Mr Rice explained. "We resigned our membership of FLO in order to eliminate these inconsistencies, which we believe exclude thousands of farmers from the benefits of Fair Trade. Beginning in coffee, we are adapting Fair Trade standards for both workers on large farms and independent smallholders and, through this more inclusive model, we believe Fair Trade USA can reach over 4 mil- lion farm workers who are currently exclud- ed from the system." Fair Trade USA first proposed extending
the Fair Trade model to estates and other farmers at the Specialty Coffee Association of America (SCAA) conference in 2003. Mr
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