ABOUT

Matt Warning is Associate Professor of Economics and International Political Economy at the University of Puget Sound in Tacoma, Washington. He has been studying the Fair Trade system for six years. He received his doctorate in Economics from the University of California at Berkeley.

INTERVIEW

"There is a lot of current economics work, including some that recently earned a Nobel Prize, that says that imperfections in markets come from the poor flow or lack of complete information."

Fair Trade is not really out of the realm of what modern economics is looking at. The issues of the standard market model, the perfect competition model, says that consumers have perfect information on the products they are buying and that everything works very fluidly.

There is a lot of current economics work, including some that recently earned a Nobel Prize, that says that imperfections in markets come from the poor flow or lack of complete information. And so, from an economic standpoint, and from my own training, Fair Trade is a mechanism to mitigate problems of information. Fair Trade tries to reduce these problems of asymmetric information and thus can give consumers the opportunity to be acting on their values and consumption choices, but also making the markets function better.

There are people producing coffee in ways that are good (we would say, socially beneficial). And there are people that want to buy coffee that is produced in that way. So, from a theoretical standpoint, it is a very interesting enterprise or mechanism to provide farmers with sustainable living, and consumers with the ability to purchase goods that meet their social values.

"I was interested in globally traded products, particularly products that were produced in developing countries and sold in wealthy countries."

I was interested in globally traded products, particularly products that were produced in developing countries and sold in wealthy countries. I went to Mexico and began doing research on coffee. I learned that the Fair Trade movement was working to improve the livelihood of farmers and they were giving people in the US and other countries a choice to buy products that met their social criteria.

In 2000, I met people from La Trinidad and visited one of their villages and was so impressed, so unbelievably impressed with the difference that this Fair Trade approach was making in the lives of the farmers, that I got hooked on it and decided to pursue this as my primary focus of my research.

"The difference in their standard of living is obvious, just from these few years."

I have seen really remarkable changes that have been brought about by Fair Trade, particularly in Xanica, one of the three villages that made up the original La Trinidad cooperative. Just in those four years that I have been visiting these farmers, it has been remarkable what they have built.

They have built a store. It serves a great part of the community now. They have built a storehouse for maize to get maize in the off-season, when rains are making the roads impassable. They have engaged in a number of different projects associated with Fair Trade. The difference in their standard of living is obvious, just from these few years.

"Concerned about globalization and exploitation, students recognize that there is something they can do."

When I started doing work several years back on Fair Trade coffee and began to bring this information into the classroom, it generated a lot of interest among the students and I was surprised and pleased to see how enthusiastic they were.

Concerned about globalization and exploitation, students recognize that there is something they can do that makes a difference in terms of mitigating or reducing the problems associated with the trade in global products. And they have learned that just through making some changes in their own consumption habits they can make a significant difference in the welfare of people elsewhere.

"A number of students got involved in a petition campaign asking for Fair Trade coffee to be brought to our campus."

What really started developing interest on campus was bringing Nicaraguan farmers here to speak to the student body about what is going on in the Fair Trade movement. That generated very, very widespread interest across campus.

A number of students got involved in a petition campaign asking for Fair Trade coffee to be brought to our campus. They got signatures from a third of the student body in just a few days. There was a long struggle with the administration and people in the cafe, but eventually we became a 100% Fair Trade campus. In fact we were the first 100% Fair Trade campus in the Pacific Northwest.

The University of Puget Sound campus is right now in the process of changing roasters, and what we are seeing is a very strong student movement to make sure that our new roaster is again 100% Fair Trade, that we do not back off in any way from our commitment to Fair Trade here on the campus.

"Students are now organizing to convince Weyerhaeuser, a Washington paper company, to become certified with FSC standards."

And Fair Trade coffee is not just an isolate issue for these students. Fair Trade coffee gives them a notion about principles of trade and effects of globalization that allows them to expand into a lot of other areas, for example, the Forestry Stewardship Council (FSC) standards for wood. Students are now organizing to convince Weyerhaeuser, a Washington paper company, to become certified with FSC standards.

A Fair Trade student group has just formed, and while their initial focus is on Fair Trade coffee, they plan to expand their focus, not just into other products, but larger issues as well.

"Fairly traded" means nothing, but it has confused consumers"

One of the problems that we have encountered with Fair Trade coffee is the development of the term "fairly traded." Roasters who did not want to participate in Fair Trade saw the growing influence of Fair Trade and heard from a lot of their customers that they would like to have Fair Trade. And so they made a cynical move and started calling their coffee "fairly traded."

"Fairly traded" means nothing. In these situations the coffee comes from plantations, whereas Fair Trade coffee comes from small cooperatives. Even the Wall Street Journal has written on this and has said that "fairly traded" means nothing, but it has confused consumers. The focus of a lot of activism going on right now is to try to make that information clear: "Fairly traded" and Fair Trade have very little to do with one another.

"Some people have complained that the Fair Trade movement does not include large plantations."

Some people have complained that the Fair Trade movement does not include large plantations and that it should because the workers on plantations could benefit from it. There are a number of different aspects to consider. One is that the small farmers feel that if large plantations are allowed to become a part of their movement, they would, as historically done, dominate the movement. And the autonomy and power that the farmers had gained from the Fair Trade movement would be lost. The small farmers feel that they have built the Fair Trade movement. If the plantations want to have a Fair Trade movement, they can build their own.

It would be a minority, but there may be plantations out there that are treating their workers very well. It would be great to have those recognized with a label for "Worker Friendly" or "Fair Treated Workers." But for the time being there is no certification system for this. And like the small farmers say, if the plantation owners want to have a system of Fair Trade, they should build that movement themselves, just as the peasant farmers have done.

"Fair Trade is not just a boutique movement."

Fair Trade is not just a boutique movement. It is getting into the Safeways, the Fred Meyers, all different kinds of supermarkets. It is reaching the kinds of consumers who would not shop in the alternative kinds of shops. And it means that the volume that is purchased and consumed goes up tremendously. It makes a huge difference in the amount of farmers that can benefit from Fair Trade.

Here at the University of Puget Sound, our contract is a very big contract for our roaster. If other public institutions, city governments, or state governments, commit to only having Fair Trade coffee or other Fair Trade products, it would make a huge difference. The volumes would be so much greater. We have already seen this in the US Congress where they have switched their lunchroom over to Fair Trade coffee. When institutional buyers get involved we can make a big difference. But that's not to say the individual purchases are unimportant. In aggregate they make a tremendous difference.

"We are seeing more and more labels emerge, and that brings a new set of challenges."

We are seeing more and more labels emerge, and that brings a new set of challenges. "Organic" is a well known label that people are fairly comfortable with. There have been a lot of problems with the third aspect of what we call "triple-certified" coffee. Triple certified coffee is "shade grown", "organic" and Fair Trade.

There has been a lot of difficulty associated with identifying what "shade grown" means. There are a lot of competing schemes. The Smithsonian, Migratory Bird Center has a scheme, in addition, there is "bird friendly," and others. This makes it difficult for consumers to make wise choices. There is interest, but it hasn't gone very far, to try and unify these three things.

"You cannot make a mainstream movement by just trying to do the good thing for farmers. Fair Trade coffee has to be of the highest quality."

One of the really exciting things going on right now in the Fair Trade movement is the recognition that Fair Trade coffee has to be of the highest quality. You cannot make a mainstream movement by just trying to do the good thing for farmers.

Almost all of the effort is now focused on making Fair Trade coffee as good as or better than other specialty coffees. The success in this area has been evidenced by a great number of Fair Trade coffees winning international competitions. Last year, the cafe that was recognized as having the best coffee in Seattle was the Fair Trade cafe, Cafe Ladro.

"They can just look for that symbol and then be reassured that the product meets their values."

The Fair Trade movement's independent, verifiable third-party certification and the production of a single label means that consumers will not have to research every single product that they want to purchase.

Here is a single Fair Trade label and once consumers find out a little bit about what Fair Trade means, when they see that label on any product, they can be assured that they do not have to do extra research. They have already learned from the Fair Trade movement that the Fair Trade symbol means "this product was produced in a socially just manner." They can just look for that symbol and then be reassured that the product meets their values.

"The Fair Trade movement has been criticized for being driven too much by the northern countries and by people in the north."

The Fair Trade movement has been criticized for being driven too much by the northern countries and by people in the north. I see this as a growing pain of the movement. A lot of the initial organization came from socially conscientious consumers and organizations in northern countries.

What we are seeing now is inclusion of the producers in the decision making bodies, for example, in Fairtrade Labelling Organizations International (FLO International). This has been a very positive movement. This recognition of the need to have a truly cooperative venture between the producers and the consumers is a very healthy recognition, and part of improving the impact and the message of the Fair Trade movement.

"The Fair Trade movement is very much a market-based movement, but at the same time it is assuring that the producers get a fair deal."

In the larger globalization debate between the people who want completely unfettered, unencumbered free trade and those who want to shut down the WTO and completely eliminate all international institutions, Fair Trade represents something that falls in between those two.

The international institutions are criticized for creating a system that exploits the producers, who end up getting a very small share of the revenues from the products that are being produced globally.

The Fair Trade movement is very much a market-based movement, but at the same time it is assuring that the producers get a fair deal. It represents a kind middle path.