The Cultural and Political Intersection of Fair Trade and Justice

Fair Trade is a form of commerce started post–World War II in the 1940s by American and European organizations as a way to provide relief to war refugees and marginalized people through the sale of handicraft items made by those populations (Shaw, Hogg, Wilson, Shui, & Hassan, 2006). By teaching people to create handicrafts that sold in the United States and Europe, income was generated to help the struggling populations. Over time, Fair Trade evolved to include food items, embrace cultural diversity, gender, environmental sustainability, long-term development, and brought greater economic return to a million small-scale producers across the globe (Warrier, 2011). Fair Trade is now a $6.8 billion industry (WFTO, 2012). It is most visible in the coffee and chocolate industries though it also includes flowers, sugar, quinoa, rice, bananas, grapes, gold, tea, herbs, rice, honey, nuts, cotton, vanilla, wine, clothing, sports balls, wood, potatoes, and handicrafts (Fairtrade Labeling Organizations International [FLO], 2011). Fair Trade products largely originate from poorer countries and are sold, often at premium prices, to consumers in richer countries.

The few large Fair Trade institutions that make up pillar I of Fair Trade are important influencers and promoters of justice. They form the communication bridge over which producers and consumers engage, sharing in goods and stories. They also set the guidelines, standards, and meaning of Fair Trade that are applied to producers and taught to consumers. Fair Trade guidelines vary as does the definition of Fair Trade and institutions’ missions. This diversity in approaching Fair Trade without a unified definition or method enables a larger experience of trade to emerge and makes Fair Trade a greater model of justice. Starting in 1998, there are now four principal Fair Trade institutions with members representing over 7.5 million Fair Trade producer families, 32,500 different Fair Trade products, and over $6.8 billion in annual sales (Fairtrade Foundation, 2012; Fair Trade USA, 2011; Fairtrade Labeling Organizations International — FLO], 2011). These institutions are the European-based World Fair Trade Organization (WFTO) and Fairtrade Labeling Organization (FLO) and the US-based Fair Trade Federation (FTF) and Fair Trade USA (FTUSA). All emerged in or close to the decade of the 1990s (Figure 2.1).

Consumers who support Fair Trade are often labeled as socially responsible, ethical, green, and eco-friendly. So were the products that were being marketed toward them. Fair Trade products were coming to consumers from many different avenues. Some originate at local coffee roasters who sell steaming cups of retail-priced Fair Trade lattes and cappuccinos. Other Fair Trade products are found at growing numbers of green festivals, cultural bazaars, eco-selling events, and church sales. Still others are found in Fair Trade specialty stores such as eco-boutiques, or chains such as Ten Thousand Villages. Fair Trade goods are also present in mainstream markets being sold at over 40 thousand supermarkets in the United States alone and large retail outlets such as Walmart, or chains such as Dunkin’ Donuts, Starbucks, and McDonalds (Krier, 2008, p. 14). Still more Fair Trade products become brands or ingredients, purchased and managed by large corporations such as Nestle (commercial coffee service, Kit Kat), Avon (body cream), and General Mills (Lara Bar) (Fair Trade USA, 2012c). Thousands of small, independent Fair Trade wholesalers and retailers also work directly with producers and sell their goods online and at industry trade shows.

Many of Fair Trade’s disadvantaged producers exist in an environment of involuntary unemployment with no benefits, education, training, and unable to realize their own transaction costs (Hayes, 2006). A transaction cost is the price of participating in a market and includes developing, marketing, and selling a product. Poverty leaves producers vulnerable to exploitation. Coyotes or middle men, for example, come to rural agricultural areas to purchase farmers’ goods quoting market prices that are often much lower than the actual market value. Producers are unable to verify these prices and even if they did, they have no choice but to sell their product to the middleman at his price or not sell their product at all (Hayes, 2006). Some products were perishable and producers needed income so they often sold product at a loss, not even covering their transaction costs. Fair Trade however offered price protections, education, training, and market access that eliminated these exploitive practices. Instead of putting vulnerable coffee producers at a disadvantage, it creates a fair level of pay and opportunity by guaranteeing prices, improving production, and providing long-term market access.

Sen’s realization-focused comparative is a way of measuring the effects of different approaches. It presents two different ways of approaching a goal such as economic growth in the developing world, in order to create a greater understanding of an issue. Taking a realization-focused comparative of Fair Trade helps to create a greater understanding of the underlying economic development philosophies and approaches that shape our world today. Fair Trade operates within the Free Trade structure. Comparing Fair Trade with Free Trade brings a juxtaposition of words and meaning when examining differences in justice. It is easy to assume by the wording, that Free Trade is related to freedom. However in a realization-focused comparison, Free Trade does not support freedom rather it is quite the opposite. A realization-focused comparison, as defined by Sen, quantifiably compares outcomes and makes differences more visible. Free Trade, also known as liberalized or conventional trade, enables participants to trade across national boundaries with little regulatory interference. Free Trade favors open, unrestricted markets with few tariffs or quotas and includes the principles of David Ricardo’s theory of comparative advantage and the laws of supply and demand. Comparative advantage means that every country would produce the commodities for which it was best suited in terms of resources, climate, transportation, capital, and labor (Riddell, Shackelford, Schneider, & Stamos, 2010).

Since Bolivia was created as a state in 1825 it has been a multiethnic society made up of indigenous peoples (55 percent mainly Quechua and Aymara), mestizos or criollos of mixed European and indigenous background (30 percent), persons of European descent, mainly Spanish (14 percent), and Afro-Bolivians (1 percent). Since the Spanish conquest of the Incas, Bolivia’s majority indigenous population has been marginalized and the country run by centralist governments made up of an elite minority. As Bolivia’s centralism began shifting in the 1950s, indigenous people slowly gained rights, education, and empowerment culminating in the 2005 democratic election of indigenous leader Evo Morales who won the presidency on a campaign titled “500 years of resistance [or suppression] of the indigenous peoples” (Monasterios, Stefanoni, & do Alto, 2007, p. 73). In 2009 a new constitution legally changed Bolivia’s name from Bolivia to the Plurinational State of Bolivia, in recognition of its ethnical diversity. For want of brevity this text will refer to the Plurinational State of Bolivia as “Bolivia,” as many Bolivians continue to do so today as well.

Bolivia’s decentralization program, the Law of Popular Participation (LPP) put governance into the hands of the people by creating hundreds of small municipalities where local groups could elect officials to and democratically direct their own development. LPP laid the groundwork for Fair Trade in Bolivia through its use of Grassroots Territorial Organizations (OTB) in the LPP process. OTBs gained legal recognition and sent members to municipal Vigilance Committees (CV) to approve and oversee local projects. By receiving legal recognition and participating in local governance, OTBs became more sophisticated in their own organizing and development. There were many different types of OTBs such as mothers’ clubs; youth groups; health and nutrition gardening groups; indigenous groups; musician groups; artisan groups such as potters, knitters, and furniture makers; agrarian groups such as coffee farmers and banana growers; and labor groups. Well organized and accessible, OTBs were easy recipients of aid-based business development initiatives. (See chapter 3 for more information on LPP and OTBs).

Ethnographic study focuses on the meanings and concerns of people in their everyday lives including people’s social and interactional processes and activities (Emerson, Fretz, & Shaw, 1995). This type of study is performed over time and is supplemented with additional resources collected in the field such as academic literature, government reports, data, and artifacts. In this manner, ethnographers get to know the people studied in a very deep, holistic way, often forming lasting bonds (Hoey, 2011). There is a personal piece that develops with the research as lives are shared and events witnessed. Ethnographers must maintain a degree of detachment from their subjects in order to ensure an impartiality and non-bias. By balancing their roles as observer and participant, ethnographers are deeply and personally involved in the research process. It is in this observer-participant relationship that personal history and motivation become important. “Ethnographic fieldwork,” explained ethnographers Brian Hoey and Tom Fricke, “is shaped by personal and professional identities just as these identities are inevitably shaped by individual experiences while in the field” (Hoey and Fricke, 2007, p. 581).

I arrived in Bolivia’s coffee region for the first time in 2012 curious about the women working in Fair Trade coffee. Coffee is a much larger market than handicrafts and has been experiencing 20 percent annual growth for several years. Research showed that Fair Trade coffee farming improved the quality of life for families, providing children with better access to education and healthcare, communities with better infrastructure through improved roads and bridges, and farmers with technical training and support (Arnould et al., 2011). However, there had not been any studies done specifically on the women themselves. I was curious about who the Fair Trade coffee women were and how they viewed their Fair Trade experience.

The primary focus of Fair Trade institutions is to improve the lives of the most disadvantaged people in developing countries through market access (Nicholls & Opal, 2005). Fair Trade studies largely find that Fair Trade increases income and economic stability for producers; creates access to credit, organic certification, and export markets; and brings benefits from diversification, structural improvements, and market control (Nelson & Pound, 2009). Lives are improved through economic growth. However, economic growth is just one aspect of one’s well-being. An individual’s advantage, or happiness, is also important. Economic gains do not necessarily create happiness. Amartya Sen writes that an individual’s advantage is judged by the person’s “capability to do things he or she has reason to value” (2009, p. 231). Happiness is understood as a feeling of self-satisfaction both personally and within one’s community, which includes one’s ability to achieve different combinations of functionings that can be compared and judged against each other in terms of what one had “reason to value” (Sen, 2009, pp. 175–193). In order for Fair Trade institutions to improve lives, participants’ functionings as well as their economic advantage need to be considered. Women participating in Fair Trade identify six functions that are important to them and affect their well-being.

Swiss sociologist and professor Geert Hofstede believes that a country’s culture affects its citizens’ interactions with people from other countries in five measureable ways. By understanding these cultural differences, he argues, greater communication and understanding is achieved. Fair Trade is a business relationship that involves many complex culture differences. It entails producers from diverse backgrounds interacting with foreign institutions facilitating export product sales to foreign consumers. Fair trade embraces diversity, engages people of many different religions, socioeconomic backgrounds, gender, and abilities and builds bridges that span nations and cultures such as rural to urban, south to north, producer to consumer. According to Hofstede, understanding regional cultural differences is imperative when developing and managing business relationships. In order for Fair Trade to be successful, and realize its goal of “seeking greater equity in international trade” (DeCarlo, 2007, p. 3), an understanding of these cultural differences and an ability to manage them in a fair and just way is necessary.