Accountability of Fairtrade from the Margins

Research Cluster

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Abstract

A reduction of the regulatory role of government with respect to food systems in the field of agriculture has provided non-governmental actors an increasing role in global governance (Schilpzand et al., 2010). Non-governmental organizations (NGOs) called Alternative Trade Organizations (ATOs) in the context of food systems have been formed to promote a more ethical way of doing business (Sick, 2008). These NGOs have played a role in shaping governance norms through multiple initiatives in both environmental and food system governance (Schilpzand et al., 2010). Fairtrade (FT) is the oldest and best known of these ATOs that began with a focus on the buying and selling of ethical or sustainable coffees (Raynolds and Long, 2007; Sick, 2008).

This study examines the accountability of Fairtrade with regard to its promise of providing sustainable livelihoods to small coffee farmers which is consistent with the notion of accounting from the margins (Gray and Laughlin, 2012). In the context of livelihood, the focus is on the perspective of the small coffee farmers since Fairtrade’s goal is to improve their livelihoods. Hence it is their perspective from the margins that should enable an account to be taken of the effectiveness of Fairtrade. Small farmers are representative of the margins and we argue that there are not enough accounts of their perspective regarding the accountability of Fairtrade.

The Fairtrade movement has built its reputation on its promise to provide livelihood to the farmers (Bacon, 2005) which it has not fulfilled (Bacon, 2010). To study the accountability of Fairtrade will require an understanding of what is a livelihood and what makes it sustainable. Scoones (1998) defines a ‘sustainable livelihood’ as being achieved by having – a reduction in poverty, improvement in well-being and capabilities, reduction in the vulnerability of the household and sustainability of the natural resource base.

The discourse of Fairtrade is that their price is going to a farmer, but through this study it was determined that the Fairtrade price is actually not going directly to a farmer, but to a farmer organization. Thus to understand how the Fairtrade system impacts the livelihoods of farmers, there is a need to understand that Fairtrade only works with cooperatives. So, when Fairtrade talks about producer prices, what is in fact being considered is the price at the level of an organization.

Thus, the price that is paid by Fairtrade as the ‘producer price’ is in fact the price to the cooperative. This study found that before this price translates into being income for coffee farmers, it must first cover the overhead costs of running the cooperative. These overhead costs are related to the processing of coffee into a form that is able to be exported to the Fairtrade consumer markets in the global north. This study argues that Fairtrade should take this into consideration when setting their producer prices to be able to deliver on their promise of providing a sustainable livelihood to the coffee farmers.