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Impact Stories

Fairtrade is global. We work with nearly 2 million farmers and workers in the Global South and 2,400+ committed brands are selling Fairtrade certified products around the world. We are proud to share the stories of people, cooperatives and businesses that are all dedicated to creating a more just world through trade.

All Stories

Lalita Bai - cotton farmer

Solomon Boateng

case study for fair trade

A Q&A with Deborah Osei-Mensah

case study for fair trade

Sankara Azéta

case study for fair trade

Coliman Bananas– family-owned, farmer-focused

case study for fair trade

Fairtrade, Mars and ECOOKIM partner to raise farmer incomes

case study for fair trade

Dah Oho, cocoa farmer at the ECAKOOG cooperative

Shopper holds Ben & Jerry's non-dairy ice cream pint in an organic market.

Helping Ben & Jerry’s provide living incomes

case study for fair trade

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Berkeley Haas Case Series

The Berkeley Haas Case Series is a collection of business case studies created by UC Berkeley faculty

Fair Trade USA: Scaling for Impact

  • Social enterprise

Fair Trade USA: Scaling for Impact

Learning objectives.

Pub Date: Jun 9, 2015

Discipline: Social Enterprise

Subjects: Corporate social entrepreneurship, Entrepreneurship, Corporate social responsibility, Corporate strategy, Social responsibility, Growth strategy, Sustainability, Supply chain management

Product #: B5836-PDF-ENG

Industry: Retail trade,Food

Geography: United States, California

Length: 29 page(s)

Berkeley Haas Case Series

Recommended

A new collection of business case studies from Berkeley Haas

The aim of the Berkeley Haas Case Series is to incite business innovation by clarifying disruptive trends and questioning the status quo.

case study for fair trade

Certification for Growth

Scaling up Fairtrade Cocoa Traceability and Data Management to 25 Coops in Côte d’Ivoire

Fairtrade started more than 30 years ago to enable farmers and workers to have more control over their lives and invest in a sustainable future. Fairtrade certifies cocoa and other products that meet rigorous social, economic, and environmental standards, from farm to shelf. Farmers and workers benefit from Fairtrade’s Minimum Price and Premium guarantees, as well as standards, training, and support on topics from gender equality to climate change adaptation, to good agricultural practices and crop diversification. When it comes to the food supply chain, the foundation adamantly supports cooperatives, acknowledging their potential to improve smallholder farmers’ livelihoods. Beyond farming practices, Fairtrade believes democratic, transparent, and participative cooperatives can be powerful economic and political aggregators that can respond to their members’ needs and manage their business operations effectively.

Since 2019, the Fairtrade Cocoa Standard requires all Fairtrade-certified coops to implement an Farmforce Origin (IMS). Such systems collect data on members’ farms, production, and sales, and enable them to manage risks such as deforestation. The ability to track the purchased cocoa from each member’s farm is essential to ‘first mile’ traceability. The aim of the Farmforce Origin requirement was to promote cooperatives’ collection and ownership of their own data in one place and to enable them to better track and manage risks, which in turn meets commercial partners’ information needs. In addition, having detailed member and sales information can help cooperatives to access bank loans.

However, while training a few African coops in the lead-up to Farmforce Origin implementation, Fairtrade came across some issues. Although the cooperatives were learning how to use an IMS, they were not fully integrating the system into their data collection and storage practices. Most coops were still loosely recording information on spreadsheets or even on paper. Coops were also collecting an enormous amount of data for other third parties, such as NGOs, government entities, traders, and other certification bodies, usually each with different systems. Even when the cooperatives had set up their IMS and integrated all their data into it, the managers were not conducting much data analysis.

That is when Fairtrade turned to Farmforce to forge a partnership. The aim was to have a system where coops-maintained ownership of their data, increasing their cocoa traceability while collecting information that helps reduce risks such as deforestation and child labor.

In 2020, we started a pilot project with three Fairtrade-certified cocoa cooperatives in Côte d’Ivoire, providing our supply chain management software as a service (SaaS). The initial pilot was also supported by the local software implementation organization, Think! Data Services . As of May 2022, Farmforce and Fairtrade are scaling the project up to a further twenty-five cooperatives.

Learnings From the Pilot Phase: Engaging the Coop Team Is key

One of the pilot’s main takeaways was that coop’s senior leadership must be fully committed to the project to make Farmforce Origin a success. This is achieved if coop managers are made aware of and appreciate the following:

  • Farmforce Origin rollout will take staff time but it will also save time in the medium run-through efficiency
  • The long-term opportunities implied by Farmforce digitalization
  • Farmforce cost-effectiveness since the first year of implementation (funded by Fairtrade)

We also set up a centralized mailbox for coops to request assistance whenever needed. This will also be used in phase 2 and will be complemented in the first eighteen months by intensive in-person support from Farmforce and Fairtrade.  This will maximize coop managers’ engagement in the crucial early months and help us nurture long-term relationships with them.

In order to better reinforce expertise on-site, we introduced a superuser concept at each coop. Superusers are often more tech-savvy and receive specific training so they can help coop colleagues familiarize themselves with the technology, and serve as a link between Fairtrade, Farmforce, and the coop.

The Time Is Ripe For Ramping Up

Since the pilot phase, the need for coops to have a digitalized IMS has grown even further. The evolving regulatory landscape in Europe on Human Rights and Environmental Due Diligence and deforestation means that coops will need to manage more complex data and risk analysis to continue selling their cocoa on the European market–which farmers are reliant on for their livelihoods. The Farmforce system enables coops to have the digital capacity to manage this data.

The Fairtrade-Farmforce partnership expansion will now see an additional twenty-five cooperatives engaged with the Farmforce system, with nearly 400 people trained on how to use the software for optimizing efficiency for the cooperatives and their members.

In line with the pilot phase, we have selected an eclectic mix of coops to boost our learnings through this journey. Scaling up will not necessarily be easy, but we are working hard to minimize the challenges. For example, Farmforce has developed a standardized IMS configuration that could be adapted to any of the 25 Ivorian coops engaged in phase 2. Together with the pilot cooperatives, Think! Data, and Fairtrade, we have crafted data templates to speed up the upload of coop-specific datasets. In addition, we have designed a Farmforce Academy (FFA) program to streamline our training campaign.  

“Because of the logistics challenges, an extensive and high-quality training on the solution will be really beneficial to our cooperative for collecting the information needed, streamlining our certification process, and accessing new markets,” Louis Sosthene B., trainee from the Coop CA ECAPR., said. “Considering the increasing stakes in the sector and the upcoming stricter regulations, digitizing our farms is a step we need to take to improve our activity and the living conditions of the producers.”

“Our primary mission during this scale-up phase is to ensure that the involved cooperatives are enabled to use Farmforce effectively, leading to long-term benefits for their businesses and for their members,” says Jon Walker, Fairtrade’s Senior Advisor for Cocoa. “Ultimately, the focus for us is to ensure greater efficiency in cooperative management based on the principles of Fair Data, or the implementation of fairness in data distribution and ownership.”

Cocoa farmer, Yaa Faustina, 23, collects harvested cocoa pods in a cocoa farm in Edwinase, Ahafo Region-Ghana. January 14, 2021.

Fairtrade changes the way trade works through better prices, decent working conditions, and a fairer deal for farmers and workers in developing countries. Fairtrade International is an independent non-profit organization representing 1.9 million small-scale farmers and workers worldwide. It owns the FAIRTRADE Mark, a registered trademark of Fairtrade that appears on more than 30,000 products. Beyond certification, Fairtrade International and its member organizations empower producers, partner with businesses, engage consumers, and advocate for a fair and sustainable future.

At Farmforce, food’s first mile is our passion. Our SaaS solutions provide organizations with the confidence to secure sustainable sourcing, improve farmers’ quality of life and protect the environment. We turn data into tools, which means more vetted acres, more measurable impact on communities, more financial opportunities for farmers, and more clarity for customers. We believe in building a better food supply where it starts. Farmforce customers span 28 countries across Africa, Asia, Europe, and South America. With over nine years of experience now managing over 735,000+ farmers in 27 crop value chains in 15 languages on our platform. A continuous loop of innovation with our customers in the center of food’s first mile journey.

The Traceability Barometer Report

Free Insightful Analysis and Trends for Your First Mile

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case study for fair trade

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Global Issues

The problem with fair trade coffee.

Fair Trade-certified coffee is growing in consumer familiarity and sales, but strict certification requirements are resulting in uneven economic advantages for coffee growers and lower quality coffee for consumers. By failing to address these problems, industry confidence in Fair Trade coffee is slipping.

  • download https://ssir.org/pdf/2011SU_CaseStudy_Haight.pdf
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By Colleen Haight Summer 2011

case study for fair trade

Peter Giuliano is in many ways the model of a Fair Trade coffee advocate. He began his career as a humble barista, worked his way up the ladder, and in 1995 co-founded Counter Culture Coffee, a wholesale roasting and coffee education enterprise in Durham, N.C. In his role as the green coffee buyer, Giuliano has developed close working relationships with farmers throughout the coffee-growing world, traveling extensively to Latin America, Indonesia, and Africa. He has been active for more than a decade in the Specialty Coffee Association of America, the world’s largest coffee trade association, and currently serves as its president.

Giuliano originally embraced the Fair Trade-certification model—which pays producers an above-market “fair trade” price provided they meet specific labor, environmental, and production standards—because he believed it was the best way to empower growers and drive the sustainable development of one of the world’s largest commodities. Today, Giuliano no longer purchases Fair Trade-certified coffee for his business. “I think fair trade as a concept is very relevant,” says Giuliano. But “I think the Fair Trade-certified FLO model is not relevant at all and kind of never has been, because they were doing something different than they were selling to the consumer. … That’s exactly why I left TransFair [now Fair Trade USA]. They’re selling a different thing than they’re producing.”

Giuliano is among a growing group of coffee growers, roasters, and importers who believe that Fair Trade-certified coffee is not living up to its chief promise to reduce poverty . Retailers explain that neither FLO—the Fairtrade Labelling Organizations International umbrella group—nor Fair Trade USA , the American standards and certification arm of FLO, has sufficient data showing positive economic impact on growers. Yet both nonprofits state that their mission is to “use a market-based approach that empowers farmers to get a fair price for their harvest, helps workers create safe working conditions, provides a decent living wage, and guarantees the right to organize.” 1 (In this article, the term Fair Trade coffee refers to coffee that has been certified as “Fair Trade” by FLO or Fair Trade USA; the term Fair Trade refers to the certification model of FLO and Fair Trade USA; and the term fair trade refers to the movement to improve the lives of growers and other producers through trade.)

FLO rules cover artisans and farmers who produce not just coffee but also a variety of goods, including tea, cocoa, bananas, sugar, honey, rice, flowers, cotton, and even sports balls. Its certification process requires producing organizations to comply with a set of minimum standards “designed to support the sustainable development of small-scale producers and agricultural workers in the poorest countries in the world.” 2 These standards—31 pages of general and product-specific standards—detail member farm size, electoral processes and democratic organization, contractual transparency and reporting, and environmental standards, to name only a few. Supporting organizations, such as Fair Trade USA, in Oakland, Calif., ensure that the product is properly handled, labeled, and marketed in the consuming country.

Like many economic and political movements, the fair trade movement arose to address the perceived failure of the market and remedy important social issues. As the name implies, Fair Trade has sought not only to protect farmers but also to correct the legacy of the colonial mercantilist system and the kind of crony capitalism where large businesses obtain special privileges from local governments, preventing small businesses from competing and flourishing. To its credit, Fair Trade USA has played a significant role in getting American consumers to pay more attention to the economic plight of poor coffee growers. Although Fair Trade coffee still accounts for only a small fraction of overall coffee sales, the market for Fair Trade coffee has grown markedly over the last decade, and purchases of Fair Trade coffee have helped improve the lives of many small growers.

Despite these achievements, the system by which Fair Trade USA hopes to achieve its ends is seriously flawed, limiting both its market potential and the benefits it provides growers and workers. Among the concerns are that the premiums paid by consumers are not going directly to farmers, the quality of Fair Trade coffee is uneven, and the model is technologically outdated. This article will examine why, over the past 20 years, Fair Trade coffee has evolved from an economic and social justice movement to largely a marketing model for ethical consumerism—and why the model persists regardless of its limitations.

The Origins of Fair Trade

The idea of fair trade has been around since people first started exchanging goods with one another. The history of trade has shown, however, that exchange has not always been fair. The mercantile system that dominated Western Europe from the 16th to the late 18th century was a nationalistic system intended to enrich the state. Businesses, such as the Dutch East India Company, operating for the benefit of the mother country in “the colonies,” were afforded monopoly privileges and protected from local competition by tariffs. Under these circumstances, trade was anything but fair. Local workers often were compelled through force—slavery or indentured servitude—to work long hours under terrible conditions. In the 1940s and 1950s, nongovernmental and religious organizations, such as Ten Thousand Villages and SERRV International, attempted to create supply chains that were fair to producers, mostly creators of handicrafts. In the 1960s, the fair trade movement began to take shape, along with the criticism that industrialized countries and multinational corporations were using their power for further enrichment to the detriment of poorer counties and producers, particularly of agricultural products like coffee.

Adding to these perceived economic imbalances is the cyclical nature of the coffee business. As an agricultural product that is sensitive to growing conditions and temperature fluctuations, coffee is subject to exaggerated boom-bust cycles. Booms occur when farm output is low, causing price increases due to limited supply; bust cycles occur when there is a bumper crop, causing price declines due to large supply. Price stabilization is an objective commonly sought by less-developed countries through commodity agreements. Thus the International Commodity Agreement (ICA) evolved as a means to stabilize the chronic price fluctuations and endemic instability of the coffee industry. The first of these agreements arose in the 1940s to provide stability during wartime, when the European markets were unavailable to Latin American producers.

After the war, a boom in coffee demand made renewal of the agreement unnecessary. But during the late 1950s, down cycles threatened economies once again. The ICA essentially was little more than a cartel agreement between the member countries (coffee producers) to restrict output during bust periods to maintain higher prices, storing the surplus beans to sell later when output was low. Because the US government was concerned about the spread of communism in Latin America, it supported the cartel by enforcing import restrictions. In 1989, however, with the fall of the Berlin Wall and the waning of communist influence, the United States lost interest in supporting the agreement and withdrew. Without US enforcement, the cartel fell prey to rampant cheating on the part of its members and eventually dissolved. Attempts have since been made to resurrect the cartel—but though it exists in name, it remains largely ineffective.

Recognizing the dire circumstances confronting farmers during the late 1980s, when the price of coffee once again plunged, fair trade activists formulated a system whereby farmers could obtain access to international markets and reasonable reward for their labor. In 1988 a coalition of those economic justice activists created the first fair trade certification initiative in the Netherlands, called Max Havelaar, after a fictional Dutch character who opposed the exploitation of coffee farmers by Dutch colonialists in the East Indies. The organization created a label for products that met certain wage standards. Other similar organizations arose within Europe, eventually merging in 1997 to create FLO, based in Bonn, Germany, which today sets the Fair Trade-certification standards and serves to inspect and certify the producer organizations.

case study for fair trade

Why do we care about fairly traded coffee? One reason is the importance of coffee to the economies of the countries in which the crop is grown. Coffee is the second most valuable commodity exported from developing countries, petroleum being the first. For many of the world’s least developed countries, such as Honduras, Ethiopia, and Guatemala, coffee exports make up an enormous share of the export earnings, comprising in some cases more than 50 percent of foreign exchange earnings. 3 In addition, many of the coffee growers are small and their businesses are financially marginal.

Although some of the world’s poorest countries produce coffee, the preponderance of that production is consumed by the citizens of the world’s wealthiest countries. The United States is the world’s single largest consuming country, buying more than 22 percent of world coffee imports; the combined countries of the European Union import roughly 67 percent, 4 with other countries importing the remaining 10 percent. According to the Specialty Coffee Retailer, an industry resource site, specialty coffee in 2010 accounted for $13.65 billion in sales, one-third of the nation’s $40 billion coffee industry. The Specialty Coffee Association of America reports that approximately 23 million people in the United States drink specialty or gourmet coffee daily. Fair Trade coffee, which has grown steadily from 76,059 pounds in 1998 to 109,795,363 pounds in 2009, 5 constitutes only about 4 percent of that $14 billion market.

The primary way in by which FLO and Fair Trade USA attempt to alleviate poverty and jump-start economic development among coffee growers is a mechanism called a price floor, a limit on how low a price can be charged for a product. As of March 2011, FLO fixed a price floor of $1.40 per pound of green coffee beans. FLO also indexes that floor to the New York Coffee Exchange price, so that when prices rise above $1.40 per pound for commodity, or non-specialty, coffee, the Fair Trade price paid is always at least 20 cents per pound higher than the price for commodity coffee.

Commodity coffee is broken into grades, but within each grade the coffee is standardized. This means that beans from one batch are assumed to be identical to those in any other batch. It is a standardized product. Specialty coffee, on the other hand, is sold because of its distinctive flavor characteristics. Because specialty coffees are of a higher grade, they command higher prices. Fair Trade coffee can come in any quality grade, but the coffee is considered part of the specialty coffee market because of its special production requirements and pricing structure. It is these requirements and pricing structure that create a quality problem for Fair Trade coffee.

To understand how the problem arises, one must understand that the low consumer demand for Fair Trade coffee means that not all of a particular farmer’s coffee, which will be of varying quality, may be sold at the Fair Trade price. The rest must be sold on the market at whatever price the quality of the coffee will support.

A simple example illustrates this point. A farmer has two bags of coffee to sell and there is a Fair Trade buyer for only one bag. The farmer knows bag A would be worth $1.70 per pound on the open market because the quality is high and bag B would be worth only $1.20 because the quality is lower. Which should he sell as Fair Trade coffee for the guaranteed price of $1.40? If he sells bag A as Fair Trade, he earns $1.40 (the Fair Trade price) and sells bag B for $1.20 (the market price), equaling $2.60. If he sells bag B as Fair Trade coffee he earns $1.40, and sells bag A at the market price for $1.70, he earns a total of $3.10. To maximize his income, therefore, he will choose to sell his lower quality coffee as Fair Trade coffee. Also, if the farmer knows that his lower quality beans can be sold at $1.40 per pound (provided there is demand), he may decide to increase his income by reallocating his resources to boost the quality of some beans over others. For example, he might stop fertilizing one group of plants and concentrate on improving the quality of the others. Thus the chances increase that the Fair Trade coffee will be of consistently lower quality. This problem is accentuated when the price of coffee rises to 30-year highs, as it has done recently.

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One of the unique characteristics of the FLO and Fair Trade USA model is that only certain types of growers can qualify for certification—specifically, small growers who do not rely on permanent hired labor and belong to democratically run cooperatives. This means that private estate farmers and multinational companies like Kraft or Nestlé that grow their own coffee cannot be certified as Fair Trade coffee, even if they pay producers well, help create environmentally sustainable and organic products, and build schools and medical clinics for grower communities.

Although the cooperative requirement may seem unusual, it follows logically from the experience of Paul Rice, founder and president of Fair Trade USA. Rice spent most of the early 1980s working with cooperative farmers in Latin America, studying and implementing training programs for small farmer organizations on behalf of the Nicaragua Agrarian Reform Ministry under the Sandinista administration. In 1990, he became the first CEO of prodecoop, a fair trade organic cooperative representing almost 3,000 small coffee farmers in northern Nicaragua. Then in 1998, he founded Fair Trade USA. Rice sees cooperatives as the key to the empowerment of the independent coffee farmer, providing a union-like type of collective bargaining power that enables cooperative leaders to negotiate pricing for the individual members.

Membership in a cooperative is a requirement of Fair Trade regulations. Another core element is the premium—the subsidy (now 20 cents per pound) paid by purchasers to ensure economic and environmental sustainability. Premiums are retained by the cooperative and do not pass directly to farmers. Instead, the farmers vote on how the premium is to be spent for their collective use. They may decide to use it to upgrade the milling equipment of a cooperative, improve irrigation, or provide some community benefit, such as medical or educational facilities.

Fair Trade USA is a nonprofit, but an unusually sustainable one. It gets most of its revenues from service fees from retailers. For every pound of Fair Trade coffee sold in the United States, retailers must pay 10 cents to Fair Trade USA. That 10 cents helps the organization promote its brand, which has led some in the coffee business to say that Fair Trade USA is primarily a marketing organization. In 2009, the nonprofit had a budget of $10 million, 70 percent of which was funded by fees. The remaining 30 percent came from philanthropic contributions, mostly from foundation grants and private donors.

People in the coffee industry find it hard to criticize FLO and Fair Trade USA, because of its mission “to empower family farmers and workers around the world, while enriching the lives of those struggling in poverty” and to create wider conditions for sustainable development, equity, and environmental responsibility. 6 “I’m hook, line, and sinker for the Fair Trade mission,” says Shirin Moayyad, director of coffee purchasing for Peet’s Coffee & Tea Inc. “When I read [the statement], I thought, there’s nothing I disagree with here. Everything here I believe in.” Yet Moayyad has concerns about the effectiveness of the model, mostly because she does not see FLO making progress toward those goals.

Whole Foods Market initially rejected the Fair Trade model. The supermarket chain only recently began buying Fair Trade coffee, through its private label coffee, Allegro, in response to the demand from their consumers. Jeff Teter, president of Allegro Coffee, a specialty coffee business begun in 1985 and sold to Whole Foods in 1997, said that his main concern has been the quality of Fair Trade coffee. “To get great quality coffee, you pay the market price. Now, in our instance, it’s a lot more than what the Fair Trade floor prices are,” he says. As for social justice for coffee growers, Teter responds: “We were living the model at least 10 years before Paul Rice and TransFair people got started here in America. … Paul Rice and his group have done an amazing job convincing a small group of vocal and active consumers in America to be suspicious of anybody who isn’t FT.” Rice disagrees, arguing, “Fair Trade is the only certification program today that ensures and proves that farmers are getting more money.”

An Imperfect Model

My field and analytical research has found that there are distinct limitations to the Fair Trade model. 7 Perhaps the most serious challenge is the extraordinarily high price of coffee. “The market today is five times higher than when FLO entered the United States. The market’s at $2.50 (per pound for commodity coffee) today vs. the 40 cents or 50 cents (per pound) it was at in 2001,” says Dennis Macray, former director of global sustainability at Starbucks Coffee Co. This price shift dampens farmers’ desire to sell their high-quality coffee at the Fair Trade price. Many co-ops, according to Macray, are choosing to default on the Fair Trade contracts, so that they can do better for their members by selling on the open market. Macray, who is now an independent sustainability consultant with clients such as the Bill & Melinda Gates Foundation, says the default problem is seriously compounded by the perceptions of quality. Some roasters express concern that the quality of Fair Trade coffee is not at the same high levels as other types of specialty coffee sold alongside it. “For some cooperatives the Fair Trade price became the ceiling, not the floor. … Many Fair Trade buyers do not see a reason why they should pay any more than the fair trade price for the value that is Fair Trade,” explains Macray.

In the past, coffee growers were often isolated in remote regions and had little access to market information on the value of their product. Unscrupulous buyers might offer only very low prices, taking advantage of farmers’ lack of information. Today, however, growers have access to coffee price fluctuations on their cell phones and, in many cases, have a keener understanding of how to negotiate with foreign distributors to get the best price per pound. In addition, the growing demand for very high quality coffee has led to a tremendous increase in the number of buyers traveling to more remote regions to ensure the supply they require.

Another important flaw is FLO’s inability to alter the circumstances of the poorest of the poor in the coffee farming community. Although FLO does dictate certain minimal labor standards, such as paying workers minimum wage and banning child labor, the primary focus and beneficiary is the small farmer, who, in turn, is defined as a small landowner. The poorest segment of the farming community, however, is the migrant laborer who does not have the resources to own land and thus cannot be part of a cooperative. In Costa Rica, for example, most small farms, including those selling Fair Trade coffee, employ migrant laborers for harvesting, particularly from Nicaragua and Panama. Rice believes that because the “yields are so low on a small farm and it’s basically family run, the migrant labor issue is not as relevant.” But at the same time he admits that the benefits of Fair Trade do not reach migrant laborers; he says he wants to expand the model to serve this population.

Rice has never wavered from his view that Fair Trade’s “central goal is to alleviate poverty,” and he is adamant that the organization’s model is as relevant as it was 20 years ago. But during that time many of FLO’s provisions of have become duplications of regulations already in place in Latin American countries, such as minimum wage requirements, credit financing, and contracting terms. “I just don’t think that the benefits are trickling down,” says Philip Sansone, president and executive director of the Whole Planet Foundation (the philanthropic arm of Whole Foods). Rice disagrees and defends his model. “The small holders in Latin America would have no way of climbing out of poverty,” he says. “One-acre farmers standing alone are pretty much always going to be victimized by stronger market forces, be they middlemen or moneylenders. At those farm unit sizes and yields, no one is viable in the global market if they stand alone.”

Another challenge for FLO is the issue of transparency in business dealings. FLO regulations require a great amount of record keeping, to ensure that individual farmers have access to all information pertaining to the cooperative’s sales and farming practices, enabling them to make more informed business and agricultural decisions. But this record keeping has proven to be a hurdle in some cases. In addition to being time-consuming, it has also raised language and literacy barriers. Certification forms, for example, only recently were made available in Spanish. “They want a record to be kept of every daily activity, with dates and names, products, etc. They want everything kept track of. The small producers, on the other hand, can hardly write their own name,” 8 said Jesus Gonzales, a farmer at Tajumuco Cooperative in Guatemala. Records kept by cooperatives have shown that premiums paid for Fair Trade coffee are often used not for schools or organic farming but to build nicer facilities for cooperatives or to pay for extra office staff. Gerardo Alberto de Leon, manager of Fedecocagua, the largest cooperative in Guatemala selling Fair Trade coffee, told me during my 2006 field research, “The premium we use here [at the cooperative]—you saw our coffee lab, it is very professional.”

Green Mountain Coffee Roasters in Waterbury, Vt., sells more than 100 coffee selections, including Fair Trade blends. (Photo by Dave G. Houser/Corbis)

Although the cooperative lab may improve quality or sales or aid in member education, it is not necessarily where consumers who buy Fair Trade coffee think their money is going. Macray says coffee consumers want to know that the extra premiums are being used for social services. “Many licensees have started to question whether the premiums were being used for social good: schools, education, health, nutrition, and so on,” he says. “It became difficult to tell the story of where that premium was going. So in your retail shop, you want to be able to tell your customers, yeah, how we provide all this extra funding for these co-ops and it made these differences.”

FLO also provides incentives for some farmers to remain in the coffee business even though the market signals that they will not be successful. If a coffee farmer’s cost of production is higher than he is able to obtain for his product, he will go out of business. By offering a higher price, Fair Trade keeps him in a business for which his land may not be suitable. There are areas all over Latin America and Africa where the climate and growing conditions are simply not conducive to coffee growing. “Fair Trade directs itself to organizations and regions where there is a degree of marginality,” explains Eliecer Ureña Prado, dean of the School of Agricultural Economics at the University of Costa Rica. “We’re talking about unfavorable climates [for coffee production]. … Regions that are not competitive.”

The Future of Fair Trade Coffee

The FLO model has changed little since its inception. Although the Fair Trade price and premium for coffee has been adjusted upward over time, the rules and regulations have remained fairly static. Fair Trade’s chief legacy may be greater consumer awareness among coffee drinkers. “We generate awareness to create demand in the market,” explains Stacy Wagner, public relations manager at Fair Trade USA. And they have had tremendous success doing so. Today, according to Wagner, 50 percent of American households are aware of Fair Trade coffee, up from only 9 percent in 2005.

Representatives from Starbucks, Peet’s, and Green Mountain Coffee Roasters (which owns such brands as Caribou Coffee, Tully’s, and Newman’s Own) all report a push from consumers for more transparency of contract and socially responsible business practices. It is rare to find a coffee roaster or retailer these days that does not address social issues in some way. Some do so by offering Fair Trade coffee. Others, however, have sought out other solutions, such as adopting other certifications or by developing their own programs. “A number of importers and exporters in the coffee business are saying we can get more money into the pockets of farmers through direct trade than if we use the FLO model,” says Macray.

Examples of businesses that have risen to meet consumer demands include Starbucks, Peet’s, and Whole Foods’ Allegro coffee. Although Starbucks offers Fair Trade coffee as one of a number of options, they also have put into place a C.A.F.E. Practice—a program that defines socially responsible business guidelines for their buyers. Many coffee producers have taken note of this model and made their practices more sustainable to attract the attention of Starbucks’ buyers. Likewise, Peet’s buys a lot of coffee from TechnoServe , an organization working to improve the business practices of farmers in developing countries. “One of the objections to Fair Trade could be that the term ‘cooperative’ doesn’t perforce equate to ‘farmer,’” says Moayyad. “Just because a certain price is guaranteed to the cooperative, doesn’t actually mean that the farmer is receiving it.”

With TechnoServe, farmers get a much higher percentage of the proceeds—up to 60 percent more according to Moayyad, even though their stated focus is “developing entrepreneurs, building businesses and industries, and improving the business environment.” 9 TechnoServe’s model focuses on quality production and farm management. “It’s not a charity,” says Jim Reynolds, roast master emeritus of Peet’s, who has more than 30 years of buying experience. “It’s building skills and better business organization, so they can run their own co-ops more efficiently and earn better pricing by finding good buyers.” Teter also follows this type of socially responsible corporate investment. Allegro pays well above the Fair Trade price to obtain the quality coffees its customers want. In addition, 5 percent of Allegro’s profits goes to charity, and 85 percent is spent in growers’ communities.

“The model for sustainable coffee that was popular five years ago has changed quite a bit,” says Macray. “Five years ago, it was common practice to just go out and buy certified coffees and check the box; and today it’s about integrating sustainability and transparency into your supply chain. Companies are making it a core way of doing business.”

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Fair trade label retains purchasing power despite recession, study shows

15-Feb-2024 - Last updated on 15-Feb-2024 at 11:02 GMT

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Scientists have analysed consumer purchasing behaviours of goods with fair trade and organic labels on their packaging. GettyImages/TommL

Researchers from the University of East Anglia and the University of Manchester in the UK explored the performance of ecolabels during a recession. In the study, ​ entitled “Ecolabels and the economic downturn”, released on 4th December 2023 in PLoS ONE, the scientists analysed consumer purchasing behaviours of goods with fair trade and organic labels on their packaging.

Examining ethical purchases using market data from a major UK supermarket chain, the research indicated that even when consumers’ budgets are stretched and disposable income is reduced, consumers are more likely to continue to make expensive ethical buys like shopping for fair trade products.

The researchers explored the 2008 economic recession and its impact on consumer expenditure on eco-labelled food products. Using UK supermarket loyalty card data, the researchers showed that the recession had vastly different effects on the spending share of various eco-labelled groceries.

Ecolabels as a strong sustainability signal ​

The scientists’ specific research question was motivated by an interesting observation in trade reports that claimed that organic grocery sales in the UK had fallen while in contrast, fair trade sales had held up during the 2008 economic downturn.

With the belief that sustainable consumption is essential for creating a more equitable, resilient, and environmentally friendly world, the researchers sought to explore ethical labels’ impact on improving sustainability. “We felt that this research was important since ecolabels are now seen as an effective policy tool to change consumption to more sustainable levels.”

Economics plus social psychology explains findings ​

During the study, the researchers from the University of East Anglia and University of Manchester analysed the sales volumes of fair trade products and organic items. They found that while fair trade product sales increased, organic product sales declined. However, the reasons for this remain elusive when using typical financial measures.

“We found that traditional economic theory could not explain our results,” said Raychaudhuri. “We would expect sales to fall across all eco-labelled products because these products tend to be more expensive than their non-labelled counterparts.”

However, the researchers found that recent behavioural economics models combining economics with social psychology could offer valuable insights. They found two models that could suggest a plausible explanation for their findings: The “model of salience” and the “model of reputation signalling”.

“The salience model states that consumers evaluate products by comparison and focus on product attributes that are most noticeable or important to the consumer.” As a result, these attributes are thus ‘salient’.

“The recession led to a negative shock in all consumer budgets,” added Raychaudhuri. The salience model anticipates shoppers becoming relatively less price sensitive and focusing more on products' public good qualities. “Hence the rise in expenditure shares of fair trade products.”

Moral motivations and identity play a crucial role in consumers’ decision-making in the signalling model. “Consumers derive utility not only from the direct consumption of a good but also from moral costs or rewards associated with the public good features of the product,” explained Raychaudhuri. Therefore, the signalling model also directly implies a non-reduction in fair trade expenditures.

Social image considerations offer a further explanation. In the context of food shopping, the influence of social norms is through social distinction or reputation as a motivation for prosocial behaviour.

“Because food consumption is, for the most part, not a public activity, social reputation is considered (in general) less compelling in explaining food consumption than theories of identity or morality.” However, more recently, insights suggest that for eco-labelled food and fair trade in particular, social norms play a role, the researcher relayed.

Fair trade versus organic products ​

The researchers’ results highlight fair trade’s recessionary staying power compared with its organic counterparts’ declining nature. Following this gap between two seemingly prominent labels in the environmental food space, the industry may wonder what this suggests about consumer preferences for fair trade labels compared with organic labels.

However, the industry does not yet have these answers. “Despite the large market share of these eco-labelled products, there is still no clear understanding about how consumers make choices in this market.”

The food sector does know though, Raychaudhuri added, that as well as price and quality, consumers also evaluate a product’s “public good” features. “They might be concerned about the environment when deciding to buy a low carbon footprint product, concerned about their health when buying an organic product, or about social justice when deciding towards a fair trade product.”

With the above caveat of “might” in mind, one implication of the researchers’ results is that consumers’ preference for buying eco-labelled products may be socially embedded. Therefore, the utility consumers gain from purchasing an eco-labelled product may comprise two parts, Raychaudhuri said. The first part refers to “functional” utility, which includes product attributes such as taste and price, while the second part is the “supplementary” utility associated with the ecolabel.

“Supplementary utility includes altruism and ‘warm-glow’ utility gained from buying a good that has positive effects on the quality of life of others, on the natural environment or on animal welfare.” In addition, consumers may gain supplementary utility from the esteem they gain from buying the product.

Organic losing market appeal? ​

Another reason for the researchers’ results indicating the flagging popularity of the organic label on food products may be a natural downward shift away from the ecolabel.

“Our results seem to go in hand with anecdotal evidence which suggests that the organic label was losing its market appeal. Much of this decline was driven by a public debate over whether organic food is actually healthier than conventional-grown farm produce from a nutritional perspective,” explained Raychaudhuri.

Beyond organic labels, though, the broader eco-claims market presents confusion and uncertainty in the economic space. “The market for ecolabels is far from being clearly understood by economists.”

Responding to price premiums ​

Attention thus turns to how environmental labels impact the economics of food and affect product pricing. The researchers state that their results have particular significance for the industry during recessionary times.

“We can view the use of ecolabels on products as a manifestation of corporate social responsibility (CSR).” As with other CSR initiatives, food product labels can limit recessions’ negative impact on brand performance. “This is important as even small changes in consumer demand can have a sizable impact on brand profitability and can alter market dynamics.”

In the specific case of the researchers’ study, the sales of fair trade products do not fall in a recession. In general, however, Raychaudhuri detailed CSR activities, of which labelling is an instance, create a more favourable consumer perception of the brand.

“Therefore, when businesses engage in these labelling schemes, they align both social and managerial interests.” As a result, “the use of labelling schemes as a form of CSR can be a valuable tool for managers to insulate their brand during recessions while at the same time delivering a public good congruent with CSR values.”

Connections between food labelling and subsequent pricing need further analysis.

“Future work should involve a more detailed analysis of the specific situations under which ecolabels can command a price premium or lead to increased sales."

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Cafédirect case study: direct trade and Fairtrade

Speciality coffee, direct trade and 100 percent Fairtrade

Cafédirect was set up as a mission-led business to deliver impact for smallholder farmers worldwide. They were one of the first companies to sell Fairtrade certified coffee in 1994. Their direct trade model enables them to support co-operatives because they have developed long-standing relationships with these co-operatives.

Cafédirect has a holistic, grower led approach, that is facilitated through direct relationships with growers, and the framework of Standards and pricing that Fairtrade provides.

Cafédirect value relationships, which is why growers sit on both Cafédirect and Producers Direct’s Board. Working alongside growers means Cafédirect can be much more agile and reactive to changing, complex circumstances.

‘Committing to both Fairtrade and direct trade is a unique and incredibly beneficial thing to do for both the coops and Cafédirect. By guaranteeing a fair price and the certainty of a long term business relationship, the co-ops can really invest in improving their organisations. In turn this provides a strong and constantly improving partner for Cafédirect.’ Matt McDonald, Procurement Manager for Cafédirect.

Direct trade and Fairtrade

Currently, Cafédirect work alongside growers in 13 countries across 31 co-operatives, sourcing 100% Fairtrade coffee, tea and cocoa. Over half of their coffee purchases are certified organic. They also partner with Producers Direct, an independent charity Cafédirect helped set up in 2009 run by growers for growers, to deliver tangible impact to over 1 million growers and their families.

Cafédirect’s sourcing model

Cafédirect was founded as a social enterprise in 1991, in response to the international price crash for Arabica coffee, where smallholder coffee farmers found their livelihoods threatened as the cost of growing and producing coffee was higher than the price they could sell it for. Cafédirect has been sourcing from many of the co-operatives they work with for more than 20 years now. Developing and maintaining these relationships is beneficial for both Cafédirect and the co-operatives.

Cafedirect go above and beyond the Fairtrade Minimum Price to work towards a fair income for coffee farmers.

Infographic showing Fairtrade prices on a cup of coffee

Read text description of the infographic

How this benefits Cafédirect 

Growers sit on the boards of both Cafédirect and Producers Direct. Working alongside growers means Cafédirect can be agile and reactive to changing, complex circumstances. For example, Cafédirect supported Huadquiña Co-operative in Peru when unexpected events potentially risked the livelihoods of hundreds of growers. They provided financial assistance as well as sourcing contracts to support the cooperative. Ten years on, Cafédirect’s continued support and financial investment (through Fairtrade and Organic premiums) has enabled Huadquina Co-operative to raise the quality of their products. 

Benefits for producers

Cafédirect sources directly from co-operatives. This direct trade model was innovative in 1991 in aiming to reduce the number of actors within the supply chain so that the growers could retain more of the value from the products they sold. The benefits of using both Fairtrade and direct trade is that it means growers have both more ownership, and more value. 

With the Fairtrade Minimum Price and Premium I believe it is possible to continue growing coffee and to generate a series of benefits for the producers, such as better living conditions, and to be able to invest in the co-operative itself, in communities and in all producers. Hugo, Coffee Producer from Norandino, Peru

Hugo-Guerrero and family

Watch our film to find out more about Fairtrade coffee farmers in Peru

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Tate & Lyle: Fighting child labour with Fairtrade

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This picture shows a coffee cup with a heart latte art design divided into sections to visualise the amount of money paid to coffee producers. The information is as follows, price per USD/(lb): The current market price for coffee (04/05/2020) is $1.04, the Fairtrade Minimum Purchase Price is $1.40, the Fairtrade Premium is $1.60, the organic premium is $1.90, Producers Direct Investment is $2.13.

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Is China’s Economic Dominance at an Inflection Point?

  • Allen J. Morrison
  • J. Stewart Black

case study for fair trade

Six reasons why its position at the top may have been short lived.

In 2023 China lost the top spot on the list of countries whose companies populate the Fortune Global 500 list, a position it had held since toppling the USA in 2019.  Is this an inflection point or will the US (one core at the top) and China exchange the position as they struggle for global economic domination in the decades ahead?  This article presents six reasons for believing that China is unlikely to recover the top spot and suggests ways in which US, European, and Japanese firms can exploit China’s fundamental weaknesses in the years ahead.

In 2019, we predicted that China would likely account for more companies on the Fortune Global 500 list than any other country. That seemed like a bold prediction at the time, given that American firms had held the number one position since the list’s inception in 1995 and the U.S. economy was 50% larger than China’s. But just one year later, in 2020, China did indeed top the list, with its 124 firms edging out the U.S. at 121 (see here for the Fortune Global 500 data).

  • AM Allen J. Morrison is a professor of global management at Arizona State University’s Thunderbird School of Global Management and a coauthor of Competing in and with China: Implications and Strategies for Western Business Executives (Thinkers50). Email: [email protected]
  • JB J. Stewart Black is a professor of global leadership and strategy at INSEAD and a coauthor of Competing in and with China: Implications and Strategies for Western Business Executives (Thinkers50). Email: [email protected]

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Reproductive rights in America

Research at the heart of a federal case against the abortion pill has been retracted.

Selena Simmons-Duffin

Selena Simmons-Duffin

case study for fair trade

The Supreme Court will hear the case against the abortion pill mifepristone on March 26. It's part of a two-drug regimen with misoprostol for abortions in the first 10 weeks of pregnancy. Anna Moneymaker/Getty Images hide caption

The Supreme Court will hear the case against the abortion pill mifepristone on March 26. It's part of a two-drug regimen with misoprostol for abortions in the first 10 weeks of pregnancy.

A scientific paper that raised concerns about the safety of the abortion pill mifepristone was retracted by its publisher this week. The study was cited three times by a federal judge who ruled against mifepristone last spring. That case, which could limit access to mifepristone throughout the country, will soon be heard in the Supreme Court.

The now retracted study used Medicaid claims data to track E.R. visits by patients in the month after having an abortion. The study found a much higher rate of complications than similar studies that have examined abortion safety.

Sage, the publisher of the journal, retracted the study on Monday along with two other papers, explaining in a statement that "expert reviewers found that the studies demonstrate a lack of scientific rigor that invalidates or renders unreliable the authors' conclusions."

It also noted that most of the authors on the paper worked for the Charlotte Lozier Institute, the research arm of anti-abortion lobbying group Susan B. Anthony Pro-Life America, and that one of the original peer reviewers had also worked for the Lozier Institute.

The Sage journal, Health Services Research and Managerial Epidemiology , published all three research articles, which are still available online along with the retraction notice. In an email to NPR, a spokesperson for Sage wrote that the process leading to the retractions "was thorough, fair, and careful."

The lead author on the paper, James Studnicki, fiercely defends his work. "Sage is targeting us because we have been successful for a long period of time," he says on a video posted online this week . He asserts that the retraction has "nothing to do with real science and has everything to do with a political assassination of science."

He says that because the study's findings have been cited in legal cases like the one challenging the abortion pill, "we have become visible – people are quoting us. And for that reason, we are dangerous, and for that reason, they want to cancel our work," Studnicki says in the video.

In an email to NPR, a spokesperson for the Charlotte Lozier Institute said that they "will be taking appropriate legal action."

Role in abortion pill legal case

Anti-abortion rights groups, including a group of doctors, sued the federal Food and Drug Administration in 2022 over the approval of mifepristone, which is part of a two-drug regimen used in most medication abortions. The pill has been on the market for over 20 years, and is used in more than half abortions nationally. The FDA stands by its research that finds adverse events from mifepristone are extremely rare.

Judge Matthew Kacsmaryk, the district court judge who initially ruled on the case, pointed to the now-retracted study to support the idea that the anti-abortion rights physicians suing the FDA had the right to do so. "The associations' members have standing because they allege adverse events from chemical abortion drugs can overwhelm the medical system and place 'enormous pressure and stress' on doctors during emergencies and complications," he wrote in his decision, citing Studnicki. He ruled that mifepristone should be pulled from the market nationwide, although his decision never took effect.

case study for fair trade

Matthew Kacsmaryk at his confirmation hearing for the federal bench in 2017. AP hide caption

Matthew Kacsmaryk at his confirmation hearing for the federal bench in 2017.

Kacsmaryk is a Trump appointee who was a vocal abortion opponent before becoming a federal judge.

"I don't think he would view the retraction as delegitimizing the research," says Mary Ziegler , a law professor and expert on the legal history of abortion at U.C. Davis. "There's been so much polarization about what the reality of abortion is on the right that I'm not sure how much a retraction would affect his reasoning."

Ziegler also doubts the retractions will alter much in the Supreme Court case, given its conservative majority. "We've already seen, when it comes to abortion, that the court has a propensity to look at the views of experts that support the results it wants," she says. The decision that overturned Roe v. Wade is an example, she says. "The majority [opinion] relied pretty much exclusively on scholars with some ties to pro-life activism and didn't really cite anybody else even or really even acknowledge that there was a majority scholarly position or even that there was meaningful disagreement on the subject."

In the mifepristone case, "there's a lot of supposition and speculation" in the argument about who has standing to sue, she explains. "There's a probability that people will take mifepristone and then there's a probability that they'll get complications and then there's a probability that they'll get treatment in the E.R. and then there's a probability that they'll encounter physicians with certain objections to mifepristone. So the question is, if this [retraction] knocks out one leg of the stool, does that somehow affect how the court is going to view standing? I imagine not."

It's impossible to know who will win the Supreme Court case, but Ziegler thinks that this retraction probably won't sway the outcome either way. "If the court is skeptical of standing because of all these aforementioned weaknesses, this is just more fuel to that fire," she says. "It's not as if this were an airtight case for standing and this was a potentially game-changing development."

Oral arguments for the case, Alliance for Hippocratic Medicine v. FDA , are scheduled for March 26 at the Supreme Court. A decision is expected by summer. Mifepristone remains available while the legal process continues.

  • Abortion policy
  • abortion pill
  • judge matthew kacsmaryk
  • mifepristone
  • retractions
  • Abortion rights
  • Supreme Court

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    Speciality coffee, direct trade and 100 percent Fairtrade Cafédirect was set up as a mission-led business to deliver impact for smallholder farmers worldwide. They were one of the first companies to sell Fairtrade certified coffee in 1994. Their direct trade model enables them to support co-operatives because they have developed long-standing relationships with these co-operatives.…

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  27. The abortion pill case on its way to the Supreme Court cites a

    The study was cited three times by a federal judge who ruled against mifepristone last spring. That case, which could limit access to mifepristone throughout the country, will soon be heard in the ...