Fair Trade is NOT the End Goal: Part II

Part II: Reflections from the South, by Santiago Paz, Co-Manager, Cepicafe

The following is an English translation of a video interview with Santiago Paz which first appeared on Progreso Network on June 21, 2011

I was hoping to initiate a discussion, a reflection on what is happening with coffee—and not just with coffee; but with fair trade in general. Coffee has been and continues to be the leading fair trade product and whatever happens with coffee will, in one way or another, mark the future of fair trade. And we are very concerned about what is happening currently. You all know that in the 1990s, around the world and especially in Peru, a process was undertaken to reactivate co-operatives and producer organizations.

Fair trade provided us with an advantage; allowed us to be more competitive and this in turn enabled us to develop our organizations. We have seen significant coffee sales and we have been able to diversify. We have diversified with regards to the financial market and with regards to the local market.

For some time now we have entered a third phase of fair trade. The first phase of fair trade was motivated by the solidarity of consumers that purchased coffee because of their social commitment. Sometimes the product was not high quality, but these consumers continued to buy as a result of their social commitment. That was the first phase of fair trade.

Then we moved into the second phase, which required another level of professionalism. This was an important step forward in which fair trade products became synonymous with quality—superior to the coffee offered by the conventional market. That is when fair trade became a reality.

But now, FLO’s [The Fair Trade Labeling Organization’s] incentives and promotion is creating a vision which only considers the importance of gaining market share. The hypothesis is that if we lower prices, and if we lower the standards, we can gain a greater share of the market. Initiatives such as FLO have established a methodology. For example, we have to multiply the number of producers by five and we have to increase volume in five or ten years. We have to gain a greater share of the market. I think that this optimism and this vision that is limited to gaining additional market shares have brought us into a new phase and we think that this phase presents a serious threat to our organizations.

On the consumer end, transnational companies are now included in fair trade. And for us as well, there are also large companies participating. We will probably not be able to compete with these companies so I think that now is the time to define the path. What is the path? What is the future of fair trade? If fair trade continues to follow a vision exclusively tied to growth and sales and the marketplace, we believe that this is the wrong way to go. The impact and advances that have been achieved are at stake.

I believe that extraordinary achievements have been made in Peru. We think that fair trade should return to its origins and that the focal point or primary orientation of fair trade should continue to be the organizations; the small producers. Unfortunately, these decisions are not currently being made in the best interest of the producers; they are taking into account the interests of large companies. We propose a return to our origins and suggest that the producer organizations should be the focal point. We also think that fair trade in and of itself is not the end goal. We believe that in addition to operating companies that buy and sell in a professional and efficient manner and compete in the international market, we should also act as organizations.

Examples [of these producer organizations] include Cepicafe, Cocla, and Escobaza . We have become protagonists and politicians; we play an important role in the economy; and we believe that fair trade should use its influence to impact regional decisions made by other institutions, by international aid, and by local, regional and national government. I think that this is the role that we play currently and that this is what fair trade should be supporting.