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Coffee to rugs and farmers to factories: Fair Trade USA is in growth mode

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Fair trade has expanded to chocolate, mangoes, wine and rugs – although coffee still accounts for 80% of 2013’s fair trade premiums. Photo: Jason Reed/Reuters


Powered by article titled “Coffee to rugs and farmers to factories: Fair Trade USA is in growth mode” was written by Marc Gunther, for on Monday 30th June 2014 17.04 UTC

Paul Rice, the hard-charging CEO of non-profit Fair Trade USA, recently toured the Brooklyn headquarters of furniture company West Elm, along with former president Bill Clinton and West Elm’s president, Jim Brett. They were there to celebrate West Elm’s commitment to handcraft products, including the first Fairtrade rugs, which are made in India. “You can have a huge impact on the wage structure in India,” Clinton enthused. “Consumers will buy these. They’re beautiful, besides.”

Fairtrade rugs? What’s next? A lot more than coffee in church basements, it turns out. “We’re talking about furniture, we’re talking about linens, we’re talking about all kinds of things,” says Rice, when we met last week at Fair Trade USA’s offices in Oakland, California. “This move into the manufacturing sector puts us on the threshold of something really big.”

Fair Trade USA is in fast-growth mode. This fall, Patagonia and Eileen Fisher will begin selling Fairtrade apparel, made in factories that they say will meet strict environmental and social standards; a small company called Oliberté already sells Fairtrade shoes. Several years ago, Fair Trade USA formed a partnership with a nonprofit startup called Good World Solutions, which has developed mobile technology to connect big companies to the farmers and workers in their supply chains. Meantime, Fair Trade USA is working to certify a bell pepper farm in British Columbia, Canada, expanding the movement beyond its roots in the global south.

This flurry of activity has brought Rice lots of attention, some of it unwelcome. His supporters say that he works tirelessly to expand the impact of fair trade. Critics accuse him of abandoning its principles. As Jonathan Rosenthal, a co-founder of the co-op Equal Exchange, told The Nation: “Paul is not afraid to think and act on a big scale. That’s one of his great gifts. And he’s willing to cut any corners to get there. That, to me, is one of his great faults.” For his part, Rice says: “The fair trade movement has been limited by a ‘small is beautiful’ mentality. We have a bigger vision.”

The fair trade movement in the US traces its roots to a Pennsylvania Mennonite and business woman named Edna Ruth Byler, who imported artisan crafts made by low-income women in Puerto Rico after the second world war. In the six decades since, supporters of fair trade have built out a global federation of standards, certifications and labels. The first label, Max Havelaar, was rolled out in the Netherlands for coffee in 1988. Then and now, the goal is to use trade (as opposed to aid) to help poor people in the produce countries develop sustainable livelihoods.

You can buy Fairtrade chocolate, tea, bananas, mangos, sugar, flowers, spices, wine and much more in the US, but coffee remains by far the leading category, accounting for $30.8m, or nearly 80%, of the premiums distributed in 2013 by Fair Trade USA. Those premiums are paid directly to farmers, who collectively decide how to spend them, and they arrive above and beyond the base Fairtrade price guaranteed to farmers in the system.

In 2011, Rice led Fair Trade USA out of the global fair trade federation because he wanted to expand fair trade practices beyond worker-owned, democratically-run cooperatives to include larger estates, and eventually, factories. “We support everything they do,” Rice said. “We just want to do more.” Traditionalists cried foul, saying that worker ownership was core to the idea of fair trade, and they remain displeased with Rice.

But Rice has won over the marketplace. The Fair Trade USA label appears on about 12,000 products from 800 brands, far more than its competitors (here is a detailed comparison of seven Fairtrade and Fairtrade-like labels). The 53-year-old Rice, a one-time leftist who after graduating from Yale in 1983 moved to Nicaragua and helped start a coffee farmers co-op, now holds a Berkeley MBA and believes that big companies, including the likes of Nestlé and Walmart, can help move fair trade forward, without sacrificing its principles.

Increasingly, he says, companies are coming to realize that fair trade can help them build secure, long-lasting relationships with suppliers. Strong corporate backers of fair trade include Green Mountain Coffee, Whole Foods Market, Ben & Jerry’s and Honest Tea.


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