Fair Trade Certification
In an effort to reverse the negative impacts imposed on small farmers and artisans due to the nature of the globalized economy, the Fair Trade certification scheme attempts to “undo” what the market has done through an alternative market mechanism—certification. Specifically, fair trade certification, attempts to create socially and environmentally just global trade relationships (Jaffe, 2007). The Fair Trade system uses labeling to certify that products and trade practices are, indeed, socially and environmentally just/responsible. The “Fair Trade” label, certifies that consumers can buy sustainably produced and traded coffee, tea, herbs, cocoa and chocolate, fresh fruit, flowers, sugar, rice, and vanilla. While the main goal of Fair Trade labeling has much to do with regulating production, Fair Trade certification through alternative trading organizations (ATOs), attempts to improve international trade relations, as well as foster the complex interactions among producers and consumers (Raynolds, 2002).
The Fair Trade certification movement began in the late 1980s with the first standard, the Max Havelaar label, certifying fair trade standards for Mexican coffee growers. Most Fair Trade initiatives operate within the regulations of Fair Trade Labeling Organizations (FLO) International. TransFair USA is one of 20 members of FLO. Some of the main principles of TransFair USA include, environmental sustainability, fair prices for farmers, fair labor conditions, direct trade, community development, and democratic and transparent organizations. Before certifying a product, TransFair USA follows a product from farmers to importers to manufacturers to distributors in order to assure that all Fair Trade principles have been met. There are many environmental, social and economic dimensions that arise among various stages of the Fair Trade certification process. For example, economic and trade agreements are one of the many hurdles that small famers must overcome before certifying their products in the market.
As Fair Trade practices attempt to foster sustainable relationships between producers and consumers, it is not surprising that stakeholder relationships are very crucial to long-term sustainability. Due to the globalized nature of agricultural production, stakeholders along a supply chain can exist across many different geographic regions. Such stakeholder groups include small farmers, advocacy groups, importers, manufacturers, retailers, etc. Fair trade not only protects farmers from commodity price fluxes in the market, but it also offers small farmers the opportunity to engage in sustainable farming practices by keeping those commodity prices at a manageable level. This protection is particularly important for farmers in the developing world who sell their products to distributors and manufacturers in the developed world (Jaffe, 2007).