Microsoft Word - Overbeek.docx Consilience: The Journal of Sustainable Development Vol. 13, Iss. 1 (2014), Pp. 165-179 Examining the Efficacy of Fair Trade and Alternative Consumption on Environmental Sustainability and Human Rights in Developing Countries Ashley Overbeek Stanford University, Stanford, California ashleyov@stanford.edu Abstract Through the lens of political ecology, the idea of alternative consumption, as defined by Bryant et al, is the consumption of more sustainable products with eco-labels alerting consumers about the benefits of purchasing said product instead of traditional products. Here, I examine the efficacy of Fair Trade certification on environmental sustainability and human rights in developing countries. Benefits accrued to Fair Trade, namely that certification informs consumers about environmental and social issues occurring in developing countries, provides consumers an option for “alternative”, more sustainable consumption, encourages businesses to develop in a more sustainable manner, and also may provide premiums that support environmental conservation and human well-being in developing countries or traditionally rentier-states. However, several drawbacks of Fair Trade certification and alternative consumption also have been noted, namely the concerns about corporate greenwashing, as well as the potential for creating a moral hazard for consumers who feel as though they are making a difference by simply perpetuating a neo-liberal capitalistic culture that oppresses those in developing countries in the first place. In addition, the definite Edenization of the rainforest can have arguably positive and negative benefits on the environmental and social aspects of developing countries. This paper will also examine the long-term effects of green marketing in the global North on the perceptions of the South as a place of unaltered wilderness and pristine ecosystems separate from the social struggles of human society. This paper argues that Fair Trade and alternative consumption has its benefits and constraints/limitations, but overall has greatly improved the plight of developing countries. Inherently, alternative consumption subscribes to neo- liberal systems and capitalistic culture, yet given we all must consume and alternative consumption captures a large audience and corporations with considerable purchasing power, Fair Trade certification and alternative consumption may be an effective means of consumptive change within the system. Keywords: Political ecology, alternative consumption, Fair Trade, Edenization, certification, producer-consumer networks 1. Introduction The notion of alternative consumption seeks to respond to consumer pressures to create a means whereby consumers are able to influence moral issues through the markets and purchasing decisions. This idea stems from two different Consilience Overbeek: Efficacy of Fair Trade in Developing Countries factors: one, the disenchantment of consumers in the Global North with the efficacy and transparency of direct aid, and two, the desire to create a reliable emotional and ethical network linking consumers in the Global North, those in developed countries, to producers in the Global South, those in developing countries. Goodman 2004 references this idea of eco-labeling functioning as a type of bridge between the somewhat conventionally opaque supply chain from production to consumption by stating: “Fair trade attempts to re-connect producers and consumers economically, politically, and psychologically through the creation of a transnational moral economy. This re-connection is accomplished through material and semiotic commoditization processes that produce fair trade commodities. The semiotic production of these commodities and their traffic in particular ‘political ecological imaginaries’ is essential to the formation of ethical production-consumption links, acting to also politicize consumption and fair trade eaters” (Goodman, 2004:891). Alternative consumption, viewed from the perspective of political ecology, is not traditionally seen as a viable, long-term solution to resource extraction and labor- related company practices in developing countries. In their book, Eco-Business: A Big- Brand Takeover of Sustainability, researchers Dauvergne and Lister argue from the political ecologist lens, stating that the system for enacting change through consumption is inherently flawed, simply because capitalistic consumption fundamentally leads to the depletion of natural resources and the oppression of the working class. Byrant et al, (2004: 344) continues to support this idea, claiming that alternative consumption is a form of “social and political ‘caring at a distance’ due to an uncritical acceptance of consumption as the primary basis of action.” Though alternative consumption still subscribes to the capitalistic consumer model, it effectively creates a link between the North and the South, and the increased funds from Fair Trade certified premiums have measurable positive effects on community development in the Global South, as well as the increased environmental regulations resulting from farms that are Rainforest Alliance certified. Raynolds (2002:410) supports this claim by acknowledging that the “Fair Trade movement destabilizes neo-liberal knowledge claims regarding the normalcy of commercial conventions” and pushes a shift in corporate mentality from exploitation of both human and natural resources in developing countries to a more harmonious, mutualistic balance with much more transparency. It is important to note, however, that even the term “Fair Trade” is decidedly a Northern term, and succumbs the Southern producers to the definition of fair as generated by the ideals of the Northern consumers. This consequently creates a group of qualifications based on a Northern standard of “fairness” centered around “collective responsibility and evaluations of societal benefits” (Raynolds 2002). It is perhaps myopic to assume, however, that eco-labeling is merely a product of the viewpoints of consumers in the Global North. Rather, the processes of both Fair Trade and Rainforest Alliance eco-labeling can be partially explained through the “actor network theory” (Whatmore 2008) in which the producers, consumers, and processors throughout the supply chain all contribute to the final definition of ‘sustainability’. The actor network theory, as defined by Whatmore Consilience Overbeek: Efficacy of Fair Trade in Developing Countries (2008), emphasizes the plurality of definitions that are shaped by the multiplicity of stakeholders in the capitalist system as a “social composite of the actions and competences of many actants; an attribute not of a single person or organization but of the number of actants involved in its composition.” 2. The Edenization of the Rainforest and Its Effect on the Focus of Eco-Labeling Currently, the portrayal of the rainforest through eco-labeling and “green” advertising perpetuates the ideal of a biblically pristine ecosystem, a modern Garden of Eden completely separate from the pollution of human industry. This idea uses spiritual rhetoric to spur consumers to want to “Save the Rainforest” and raises public support about ecological conservation efforts. On the other hand, this portrayal can also be extremely problematic at a fundamental level, heightening the importance of environmental sustainability to the complete eclipse of the need for social reform or human rights accountability at the governmental level. Though Fair Trade does a good job of bringing social issues in developing countries into the agenda of Northern consumers, it does perpetuate a different type of what Bryant (2004) article references as “Edenic myth-making” in regard to how businesses portray the rainforest to consumers in the North. Fair Trade’s Edenization involves the “creation of a ‘Third World’ ambiance, including music and decor, and the telling of producer stories, through producer store visits, photo and video images, and written narratives on the lives of individual producers” (Raynolds, 410) as well as the creation of a pristine natural rainforest completely separate from civilization, ripe with the Western notions of ‘wilderness’. As seen on the Fair Trade Certified website, personal stories from smiling farmers speaking about how Fair Trade has impacted their lives and communities at an individual level abound, in addition to excerpts stating how the certification has created standards for environmental preservation. This storytelling aspect has been critical to the development of alternative consumption, and has shaped a more emotional, personal bond between consumers in the Global North and producers in the Global South. Figure 1 creates a personal anecdote that appeals to the pathos of consumers by showing a personable, smiling farmer picking fruit who is looking directly at the camera and, consequently, directly at the viewer/consumer. A quote on Fair Trade’s impact report, which is also shown in Figure 1, mentions “Before, my son never used gloves while he worked. But through the program he learned to protect himself while applying agricultural inputs. For that I am so glad.” Consumers reading this are shown the personal level of impact that their donation has in a relatable, multi- generational manner. Consilience Overbeek: Efficacy of Fair Trade in Developing Countries Figure 1: “Fair Trade: Importing Lives Producer Profile” FairTrade USA, 2012 Along the same vein of the biblical, Garden of Eden portrayal of tropical forests in developing countries, in his book “Uncommon Ground: Rethinking the Human Place in Nature”, environmental historian William Cronon explores humanity’s schizoid relationship with nature, a topic that has been exacerbated by green marketing and alternative consumption. This theory states that wilderness has been elevated to a spiritual experience that consumers feel frees them from the mundane confines of human civilization and traditional societal roles. This viewpoint can be problematic in how Northern consumers view the natural resources of developing countries, and therefore through alternative consumption, these viewpoints can directly shape the agendas of NGOs or the specifications for the certification processes for eco-labeling. For example, when the rainforest is portrayed as an untouched, pristine landscape, consumers in the Global North tend to overlook the need to support the indigenous peoples who call the rainforest home. This in turn can create an apathy towards the plight of indigenous tribes or smallholder farmers, who can be viewed as “outsiders” to the forest ecosystem. In other words, because of Edenization, consumers from the Global North are less sympathetic to farmers and smallholders that are cultivating small parts of the rainforest for sustenance because they are not viewed within the idealized, “trees, animals, and nature” rainforest landscape. Fair Trade certification, paradoxically, both seeks to change this point of view and yet continues to perpetuate it. Fair Trade highlights the plight of humans in Consilience Overbeek: Efficacy of Fair Trade in Developing Countries a natural setting, thus weaning perceptions away from untouched wilderness and bringing social turmoil and class conflict into the forefront of the Western consciousness. However, in its approach for community-based funding that gives premiums to co-operative farmers, Fair Trade continues to ignore the existing class issues that are perpetuated by government corruption and the exploitative, wealthy elite. In this way, Fair Trade serves as more of a Band-Aid, albeit a relatively successful Band-Aid, instead of a cure. In its own way, Fair Trade exemplifies the Edenization of developing countries, implying that hard-working small farmers are inhibited only by their meager wages through the exploitation of labor by large, multi-natural agribusiness corporations, and fails to address the system of institutionalized oppression and both geographic and socioeconomic discrimination by the arguably corrupt governments of the developing countries. In this way, Fair Trade certification smartly avoids becoming a politicized matter, and it is still important to note the successes of improving the quality of life for farmers on a more localized, case-by-case level. Figure 2: James Rodriguez for Fair Trade USA, “Gender Equality Supported by Fair Trade”, Fair Trade USA, 2013, The photo in Figure 2 was meant to be used by Fair Trade partners, and included the description, “Luz Marleni Mendoza (center), married to Segundo Cuevas Villalobos, coffee grower affiliated to CECANOR since 2000 from Agua Azul, tends the family's coffee seedbeds with her two daughters.” Even though Luz Marleni is not affiliated with CECANOR, she participates and receives many benefits from the Fair Trade prize. She comments, "I am not a member of the co-op because my husband is the one involved, but I help out a lot on the field. And the Fair Trade benefits are great for our children, particularly with regards to education. We have also been to gender equality workshops [paid for with Fair Trade prize Consilience Overbeek: Efficacy of Fair Trade in Developing Countries money] that have dramatically changed our village. Before men would drink too much, some were violent. Now, many of us feel equal to men." CECANOR: Agua Azul, La Florida, San Miguel, Cajamarca, Peru. February 26, 2013.” The photo, with its emotionally appealing, anecdotal rhetoric, also subscribes to the traditional Northern perception of producers in the Global South, including tight familial bonds, and smiling community members working together picking and harvesting produce in the green, Edenic rural forest. To move away from the visual and begin analyzing the caption, the quote exalting the “spillover effect” of Fair Trade certification on the community and extended family of farmers does nothing to reference the underlying political turmoil or institutionalized gender inequality in Peru. While Fair Trade continues to provide direct alleviation on a local level by funding and providing gender equality workshops that are described to be quantitatively and qualitatively successful, Fair Trade does not attack existing systems of gender oppression that perpetuate discrimination against females in Peru on a national, or governmental, level. 3. Defining Fair Trade Certification: In Principle and In Practice The history of Fair Trade began in around the 1960s as a niche, alternative market. Fair Trade products were sold in “world shops”, or specialty stores that only carry Fair Trade goods. However, as the years progressed, Fair Trade moved into the mainstream market and into larger scale processing and distribution networks that were accessible to a larger slice of Northern society and popular culture (Fair Trade Resource Network, 2010) and has been growing ever since. Fair Trade spends a large amount of revenue funding extensive, international marketing programs in order to gain brand recognition for the Fair Trade label and incentivize alternative consumption. Indeed, the current focus of Fair Trade has been coined a ‘‘mainstreaming strategy’’ by Taylor (2004), which seeks to “achieve rapid growth in market share by encouraging corporations, governments, major retailers, and other large economic actors to support Fair Trade.” In many ways, this approach has allowed for a large expansion of the Fair Trade market, as sales had reached over US$700 million by the end of 2003 according to Murray et al. (2006). Fair Trade reported over US$5 billion in sales revenue in 2013 (BBC News). As defined by Murray et al 2003, “The Fair Trade movement is an effort to link socially and environmentally conscious consumers in the North with producers engaged in socially progressive and environmentally sound farming in the South. It is an attempt to build more direct links between consumers and producers that provide the latter with greater benefits from the marketing of their products than conventional production and trade have allowed, while breaking down the traditional alienation of consumers from the products they purchase” (Murray, 179). Currently, the Fair Trade certification abides by five major tenets, as indicated from the Fair Trade USA website: (1) access to credit; (2) guaranteed prices; (3), environmental sustainability; (4) labor right; and (5) community development. The posited requirements and their effectiveness in practice are discussed in detail below. Through the access to credit requirement, buyers are required to offer a line of credit to farmers, allowing them to invest in farm improvements and sustainable Consilience Overbeek: Efficacy of Fair Trade in Developing Countries infrastructure. However it is unclear how much money is actually loaned and utilized by producers in the Global South. Taylor (2004) reports “Participants’ access to credit has improved, largely due to FLO’s pre-financing requirements” while Lyon (2007:108) critiques the failure of the access to credit in practice because “many cooperative members find it difficult to repay their loans to the cooperative, in turn making it difficult for the group to repay its bank loans.” The guaranteed price is applied through an economic price floor that represents the cost of sustainable production. The international community, not Fair Trade itself, sets this objective cost. This price floor guarantees that farmers will be paid the cost of sustainable production, regardless of market volatility. In the case of coffee, prices have fluctuated so much in 2002 that the guaranteed price represented “as much as double the conventional market price” (Taylor 2004). Some argue, however, that a price floor incentivizes overproduction, flooding the market and even lowering the market price. In addition, the guaranteed price could potentially trap producers in the Fair Trade certification, offering the only means for producers to turn a profit or maintain afloat in an inflated and inefficient market. In regard to environmental sustainability, for its criteria and/or conditions, Fair Trade prohibits the use of genetically modified organisms, most toxic agrochemicals, and promotes the active conservation of soil, forest, and water resources. These standards are enforced through an audit system, where an independent third-party auditor surveys participating farms for compliance. Though still somewhat nebulous of requirements, measurable results are seen as “small producers are now adopting more environmentally friendly farming techniques to improve the quality of their coffee beans” (Utting-Chamarro, 2005). Fair Trade also demands that no certified farms use child labor, forced labor, or allow workplace discrimination. If child labor or forced labor is discovered during the auditing process, the child or forced laborer will be immediately removed and taken to a safe location. As for workplace discrimination, Fair Trade’s most measurable effect has been to improve gender equality at a local level, allowing “some women producers to take greater control of their lives, and not be afraid to participate in decision making both within their cooperative and household” (Utting-Chamarro, 2005). Consilience Overbeek: Efficacy of Fair Trade in Developing Countries Figure 3: “Premium Payments to Fair Trade Producer Organizations by Product, 1998-2012”, Fair Trade USA, 2012 Perhaps one of the most unique aspects of the Fair Trade policy is its commitment to community development by providing a premium given directly to the farming co-operatives. According to Fair Trade USA’s website: “Since 1998, Fair Trade USA and its partners have enabled Fair Trade farmers to earn more than $114 million in community development premiums,” also depicted in Figure 3. This money is put toward a nebulous description of “community development.” A representative of Fair Trade elaborated that there is no specific suite of guidelines established by Fair Trade for community development. Rather, the community and the farming co-operative work together to address the specific needs of the community, whether it be paying for the medical treatment of an elderly resident or building a well to bring more accessible water to a village. This flexibility allows individuals in the community to use the money to enact change identified at a local level, which is a much more pragmatic approach than the traditional philanthropic remote instruction, or top-down external oversight. In this way, Fair Trade addresses the complaint raised by Bryant (2004), who stated that alternative consumption is a mechanism for “caring at a distance” (Bryant, 344). True, consumers are still not directly affecting the communities when they pay the price premium, but this type of spending autonomy to the producers is a much more successful and revolutionary method of exchange. Though the price premium is technically absorbed by the processors, the prices of Fair Trade products are typically higher than traditional non-Fair Trade products, though “consumers are willing to pay higher premiums for coffee labeled as fair trade” (Loureiro, 2005). Indeed, it is because of the way that Fair Trade is marketed, and the anecdotal advertising strategy which builds a network of transparency from individual producer to individual consumer, that consumers in the Global North are willing to pay a higher premium for a product that they feel directly impacts producers in the Global South. Taylor (2004) elaborates on the emotional rhetoric that induces alternative consumption: “This willingness to pay is supported by the building of direct personal ties between Northern consumers and Southern producers” (Taylor 2004: 132). Allowing the community to exercise localized control over how the premium money is spent has had definite success in poverty alleviation, being spent largely “by producer organizations to be invested in crop quality and infrastructure improvements or community projects such as schools and health services” (Raynolds, 2002). 4. Fair Trade Certification as a Product of a Capitalist Culture that Represents Northern Capitalistic Interests Fair Trade has been criticized for perpetuating a North-knows-best type of attitude vis-à-vis the certification criteria. Because the standards appeal to the consumer consciousness in the Global North, they reflect the values and ideals of a society that does not typically have direct interaction with the Global South. This has been a key critique in “that governance of the Fair Trade coffee movement has been Consilience Overbeek: Efficacy of Fair Trade in Developing Countries dominated by Northern interests” (Taylor, 2004). Various shareholders influence the decision-making process, and as multi-national corporations such as Walmart begin to sell Fair Trade products, the danger of the original intention of Fair Trade – to provide an emotional network between producers and consumers while fighting against environmental degradation and social exploitation traditionally perpetuated in the neo-liberal capitalistic global marketplace – stands at risk of being altered by profit-motivated business interests. There are also issues posed by the equity of the distribution of benefits, especially in regard to the hands-off approach of Fair Trade’s community development premium. Because there is no authority on how the premium can be spent, “benefits may not be distributed equally among cooperative members or among members of producer households” (Raynolds, 2002). On a more macro scale, Fair Trade as an organization is inherently biased toward more developed co- operative farms instead of extremely small shareholders operating in more rural areas. Simply because Fair Trade requires compliance to many standards, including environmental standards, co-operatives with sustainable infrastructure or available funding, which by default tend to be bigger, have an easier time adhering to the Fair Trade tenets. Indeed, in anonymous interviews, “interviewees in several well- established Fair Trade cooperatives expressed concern that the initiative may be serving the strongest and most established producer organizations rather than addressing the most marginalized” (Taylor 2004). In addition, the network linking the Southern producers and the Northern consumers is arguably extremely one-sided, and portrayed through a veil of feel-good marketing. While consumers are shown the stereotypically Northern viewpoint of culturally unique producers and their rural environments, the producers themselves still know very little on a personal, individual level about their consumers. Because there is little to no proximate, physical interaction between producers and consumers, the ethical networking link is warped through the lens of Fair Trade and is only really shown to the consumers in the Global North, as “the modes of connectivity linking producers and consumers are largely symbolic ones formed in the North through marketing” (Lyon, 2006). In other words, migrant workers in Peru are not shown full color leaflets with professional photography depicting a middle-class American housewife who is purchasing their coffee beans. 5. Fair Trade Certification as a Tool for Positive Social Change and Environmental Regulation Conversely, Fair Trade has been seen as an important step in poverty alleviation and environmental protection in developing countries, especially from an economic perspective. It has been documented extensively that producers in the Global South have received additional income from participating in Fair Trade certification. Indeed, as shown in Figure 4, “the incomes of most small coffee producers had doubled since their entry into the fair trade market” (Utting-Chamoro, 2005). Consilience Overbeek: Efficacy of Fair Trade in Developing Countries Figure 4: Karla Utting-Chamorro, “Changes in a small producer’s income over two years” Development in Practice, 2005. Consequentially, this increased revenue has dramatically increased the quality of life for the co-operatives and their surrounding communities, as “many small producers illustrated changes in their lives by referring to greater economic stability and security, in addition to identifying material changes. Some significant improvements they reported included the following: the use of electricity instead of fuel wood, better nutrition, physical improvements to their home, the ability to pay for their children’s education and to buy uniforms, shoes, and books, the ability to purchase a vehicle and install a telephone in their home, and the ability to improve the condition of their farm, including purchasing inputs such as organic fertilizer, machinery, and other equipment, and hiring help” (Utting-Chamoro, 2005). There has also been a noticeable “spillover-effect”, as mentioned previously, where not only the farming co-operatives that are in direct contact with Fair Trade benefit, but also their extended families and outlying communities through their interactions with the members of the farming co-operative. As a case study in coffee production confirms, “Fair Trade has provided increased economic and social stability to participants, and greater access to technical training. This in turn has led to improvements in the quality of small-producer coffee and higher productivity. Farmers’ families have also benefited, for instance through greater access to education for their children” (Raynolds, 2002). As means of production, location, and culture among co-operatives can vary slightly at a case-by-case basis, levels of success for Fair Trade can also vary. However, on the whole, “all the cooperatives participating in Fair Trade have clearly reaped significant benefits from the experience, which has improved the well-being of thousands of small-scale farmers in Mexico and Central America” (Loureiro, 2004). 6. Moving Forward: The Future of Alternative Consumption and Fair Trade Certification Consilience Overbeek: Efficacy of Fair Trade in Developing Countries As Fair Trade continues to grow as a presence in the farming communities of developing countries, it has several areas of improvement. To revisit the drawbacks of Fair Trade, one of its weakest areas appears to be its lack of ability to address the needs voiced by the Southern producers themselves, or to even provide a reliable medium for producers to provide feedback or provide input on certification standards. This is especially tenuous as Fair Trade becomes more mainstream in the Global North, and must increasingly balance the needs of their profit-driven capitalistic corporations and the requirements of philanthropic environmental and social justice through alternative consumption. Steps that can be taken to improve alternative consumption and Fair Trade certification’s sustainability include industry changes as well as political changes. Fair Trade as an organization can invest in creating more reciprocal channels of communication, allowing for open or even direct exchange of thoughts and ideas from the Global South producers to the Global North consumers. In addition, Fair Trade can focus on creating a system that relies on more producer input to create the certification standards, perhaps even varying the standards based on country or region. On the policy end, both the governments in the Global North and those in the Global South can work together to promote sustainability. The Fair Trade model that has been discussed previously in this paper is fairly straightforward. In this way, this structure can be adopted by governments in both producing and consuming countries, creating national or international legislation to promote price floors on food staples, as well as adding a government tax on certain food products which would fund community development in rural farms and plantations. 7. Conclusion The most difficult aspect surrounding the efficacy of Fair Trade certification on environmental sustainability and human rights in developing countries is the variability between different countries, sizes and locations of farming co-operatives, and the crops being produced. Generalizing the successes or drawbacks of Fair Trade as a whole fails to examine the specific traits unique to these extremely diverse areas. However, in certain aspects, Fair Trade as a governing principle can be analyzed critically and applied to the concept of alternative consumption as a whole. Although it is true that inherently alternative consumption perpetuates the flaws within the market system by subscribing, and therefore conforming to a degree, to the neo-liberal capitalistic culture it is fighting against, alternative consumption also provides a necessary bridge between traditional capitalistic culture and a radically outside-of-market-based solution. Alternative consumption commits to “operating both ‘in and against the market’, aiming to use the market to transform the market” (Taylor 2004). Specifically with Fair Trade, Murray et al (2006) deems Fair Trade a mechanism that has become “a dynamic and successful dimension of an emerging counter-tendency to the neo-liberal globalization regime.” Alternative consumption and Fair Trade create a link between the producers in the Global South and consumers in the Global North, allowing a personal, albeit Consilience Overbeek: Efficacy of Fair Trade in Developing Countries sometimes one-sided, relationship to develop, shortening the supply chain and creating more transparency in the traditionally opaque and oppressive global market system. The willingness of consumers to pay the Fair Trade premium, which has made significant documented effects on poverty alleviation and environmental conservation in developing countries, has been ushered in by the personal, anecdotal marketing that is used to promote alternative consumption, but can also shape certification requirements to a Northern ideal. Taylor (2004) elaborates, stating, “Fair Trade objects to the abstraction of the market as a depersonalized mechanism operating outside of social institutions and cultural values. It recognizes that economic activity is a social activity invested by humans with social and cultural meaning.” One of the biggest concerns for Fair Trade is the need to include producers in the decision-making processes while the expansion of the organization creates the potential for even more influence from multi-national distributing corporations. However, overall, alternative consumption has been an important factor in improving workers’ conditions and outcomes – both socially and environmentally – within the communities in developing countries. Consilience Overbeek: Efficacy of Fair Trade in Developing Countries Bibliography "Benefits of eco-labeling." International Institute for Sustainable Development (IISD). N.p., 17 Mar. 2014. Web. 17 Mar. 2014. . "Challenges to eco-labeling." 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