The True Impact of Fair Trade

Adventures in Sustainable Living Podcast

Episode 19

The True Impact of Fair Trade

Welcome back everyone to the Adventures in Sustainable Living podcast. This is your host Patrick and this is episode #19 called  The True Impact of Fair Trade 

After my last episode titled Choices Make Changes; What is a Sustainable Product and How to Find Them, I thought it was fitting to follow that episode on something having to do with fair trade. Because the products that we choose to purchase not only affects sustainability but it also affects the lives of so many other people.  

But I want to start this episode by sharing with you a story about a man named Felix Belisario who used to live in Napo, Ecuador, about 10 years ago. Now I find this story interesting because I have actually been to this area of Ecuador. Napo is province located in the Amazon Rainforest. I actually traveled a couple of hundred miles on the Napo River, which is a big tributary to the upper Amazon Basin. And by the way, on that trip I saw so many things that most people only see on the pages of National Geographic. It was truly an amazing trip for me.  

Anyway, for Felix, work was nearly impossible to find since any sort of industrial development in Napo was rare. Consequently, Felix worked for minimal pay as a tour guide for a local hotel. However, his low rate of pay made it nearly impossible to support his family.

Consequently, Mr Belisario left home in search of a better job and potentially a better life. It was not long before he found work with Agrocoex, which is a family owned business that was established in 1992 in Latacunga, Ecuador for the exportation of roses. Now, you likely do not know this but Ecuador is a fabulous place to grow long stem roses because the country essentially has a 12 month long growing season because it is located on the equator. 

Now, Mr Belisario had consistent work that paid well. However, he was still separated from his family because he only lived in a small room he rented near the farm. His family remained in Napo which was about 5 hours away. But the job also had it’s benefits in that Belisario was able to send his family money which of course helped them to have a better life.  But, he only visited them every 3 months.

However, Agrocoex is a fair trade company. Consequently, they had a Fair Trade Committee which consisted entirely of workers that were democratically elected to represent their peers. A survey of the workforce found that housing was a common need because most of the workers live in cramped quarters far from their families.

So what happened is that the Fair Trade Community Development Fund began investing money into a new housing complex for the workers. The money in the Community Development Fund is made from a portion of the sales of Fair Trade Certified products, and one of the functions of the Fair Trade Committee is to vote on how to invest the money whether that be on social, economic, and environmental projects.

The end of this story of that the La Calerite Housing Complex was built which now consists of 100 houses for the Agrocoex workers. Mr Belisario was consequently reunited with his family and they now owned their own home. 

But his dream is something that all workers deserve: good housing, decent working conditions, and freedom from poverty. 

Now you must know that this sort of story is not unique. I could go on for hours telling one success story after another after another because of the Fair Trade agreement. Not only that, because of my travels in the Amazon, as well as other places, I can tell you numerous stories of people that could benefit from fair trade. 

But before we get deep into the concept of fair trade, let me just give you a few things to think about. 

-Did you know that two thirds of the world makes less than the equivalent of $10 USD/day and 10% of those make less that $1.90/day. So think about that in comparison to your present lifestyle. 

$10 USD/day means about $300/month. $1.90/day means about $57/month. The average American spends more than that on Starbucks coffee every month. 

-Imported goods into the US in 2019 was 3.1 trillion dollars. The top 10 imported categories in descending order consisted of :

1) Machinery including computers and hardware

2) Electrical machinery

3) Automobiles

4) Minerals, fuels, and oils

5) Pharmaceutical

6) Medical equipment and supplies

7) Furniture, lighting and signs

8) Plastics

9) Gems and precious metals

10) Organic chemicals

Now let’s talk for just a minute about US food imports. I think this is important and you will soon see why. 

US consumers always seem to demand variety, quality, and convenience in the foods they consume. As Americans have become wealthier and more ethically diverse, our typical diet shows a growing demand for tropical products, spices and even gourmet imported products. Consequently, the seasonal and climatic factors in the US drive imports of popular types of fruits and vegetables, as well as tropical products such as cocoa and coffee. Presently, roughly 53% of fresh fruit and 33% of fresh vegetables in the US are now imported. 

In 2016 46% of that fruit came from Mexico, as well as some from Chile, and  Guatemala. 

Did you know that the average wage in Mexico is $2.43/hr

In Chile it is $2.63/hr

In Guatemala it is $1.50/hr

And as you may well know, pineapples do not come from Hawaii any more. 99.9 % of those sold in the US are imported. I distinctly remember driving across a Dole Pineapple plantation in Costa Rica where it literally took 35 minutes at highway speeds just to get through the plantation.  And by the way the average wage in Costa Rica for unskilled labor is about $17 USD/day. 

So, what is my point here. In my last episode, I talked about how Choices Make Changes. The same is true when it comes to Fair Trade.  But what is that exactly.  

Well, this all started about twenty-five years ago in response to the collapse of the world coffee market. The crash of coffee prices was having a devastating impact on smallholder coffee farmers around the globe. In fact they were earning less than the cost of growing their coffee. In particular, the small farmers in what is called the “coffee belt” experience unprecedented hardship for their families.

In response to this, a group of organizations which included Oxfam, The Women’s Institute, CAFOD, which is the Catholic International Charity Development, Christian Aid, and Traidcraft came together and formed the Fairtrade Foundation in order to deal with the crisis. 

The Fairtrade Minimum Price was introduced. This essentially forms a safety net that kicks in when the market price falls below a sustainable level. What this meant for farmers that were in the Fairtrade system is that they would receive at least the cost of production for their coffee even when the market price had crashed. When the market price rose above the Fairtrade Minimum, the farmers received the market price alongside other non-Fairtrade farmers.

Additionally,  the Fairtrade Premium was introduced. This is an extra amount of money that is paid to the farmer co-operative on top of the sale price. What this means is that small farm holders would form a co-op where they share costs, knowledge and skills.The co-operative decides democratically how to spend the Premium, whether on community projects or improvements to their farms. 

And over the years, Premium projects have included maternity hospitals, schools, improvements to roads, reforestation, housing projects and training programs. 

Now for example, let’s look back at the Agrocoex company in Ecuador, which is where our friend Mr Belisario works. In that housing complex that was funded by the Fairtrade Premium, 

workers at Agrocoex were able to purchase the houses for the price of the parts and production of the home. Low-interest loans were offered to workers, made possible by the Fair Trade Community Development Fund. 

Before the housing complex, some workers had to obtain high-interest bank loans to even live in the area and they had to living in cramped spaces that were often devoid of basic services such as water, sewage, and electricity. La Calerita represented an opportunity for workers to move economically upward by investing in a home rather than paying rent for cramped rooms, far from their families.

But you see, this sort of thing, that is ending poverty, runs across all fair trade factories, farms, and fisheries. Money from fair trade certification helps many workers that are hit hardest by market volatility and tough working conditions. Fair trade farmers and workers in 2019 alone through Community Development Funds earned $66.8 million.

Very simply put, Fair Trade is a way of doing business that has the potential of changing the world. Now this is a quote from the Fair Trade website: 

“Based on the simple idea that the products bought and sold every day are connected to the livelihoods of others, fair trade is a way to make a conscious choice for a better world.

What does that sound like. Choices Make Changes

Now I have discussed before some of the pros and cons of globalization. In fact, in my episode about the most sustainable countries, I spoke of how the country of Iceland could not bear the volatility of the world energy market. Consequently, over time they managed to essentially become 100% sustainable for their energy needs. But, if you remember from that episode, the government set up a fund that subsidized local communities and businesses as they explored the further use of geothermal energy. Part of what that fund did was to cover the cost of failed projects. So if a company was drilling to recovery and utilize geothermal energy, which is a renewable energy source, and that project failed to produce, this fund covered the cost instead of a small company going bankrupt. That in turn fueled and encouraged other projects. In the end, the entire country benefited. 

In a sense, Fair Trade is much like that.

The challenge is that we now live in a global community and value is not equally shared. Often times producers have limited or little ability to negotiate a fair exchange for the goods and services. Consequently, they have difficulty competing in today’s market. It is sort of similar to a Mom and Pop grocery market that has been in the community for 25 years now attempting to compete with a big chain supermarket that just moved into town. It is literally impossible. 

So what happens is that in today’s market, businesses drive prices down at the expense of those that have little control over the market. Consequently, they may not even receive sufficient payment to even cover their basic expenses or even the cost of production. 

Fair trade offers protection against such things. Under fair trade agreements producers and their communities are able to thrive under the protection of fair trade relationships.  

The largest majority of farm workers worldwide do not own their own land or any other property for that matter.  Many of them are day laborers or what is called daily wage earners. Most people do not realize that it is these very people that produce 70% of the worlds food supply yet 1/3 of them live in poverty. That means they are unable to sustain themselves or their families. 

And the abuse against farm workers is widely documented. The situation is often much worse for immigrant and migrant workers who often make up 70%  to 80 % of the work force, yet they don’t receive the same legal protections especially in the United States. And we all know that in hard times, such as our COVID 19 world has shown us, during trying time the most vulnerable populations get hit the hardest. The only way this will change is that if those changes are made across the farming industry and fair trade is a means of accomplishing just that. 

One of the organizations that has made a significant difference is Fair Trade USA, which has been around since 1998. This organization designs standards and certifications that promote sustainable livelihoods and helps to protect the rights of farm workers abroad. Through their efforts workers have earned more than $740 million dollars through the sale of Fair Trade Certified products. 

And the best part is that 63 % of US consumers are aware of the Fair Trade Certified seal. Furthermore, 72% of these consumers recognize the value in fair trade and are willing to pay more for the products they purchase. 

But you see, one side to the agricultural industry that most people do no recognize is that these workers change jobs and often move farm to farm, which make worker retention near impossible. But, there was one fair trade mango grower in Mexico that reported that worker retention improved by 42% once they were certified. 

The simple fact is that workers and businesses are more resilient under fair trade protection. For example, the dried fruit company in Columbia, called Fruandes, was started as a result of the coffee market crash. If the small scale farmers were going to survive they needed to diversify. Since Columbia has a rich tropical climate, fresh fruit is a natural by product. Fruandes dried fruit company was born and is an established fair trade company. Their workers have a sustainable wage, vocational training, health care and education for their children.  None of which would be possible without a fair trade agreement. 

There is no doubt that on a global scale we need to rethink how we consume.  And it should be obvious that our consumer choices drives the market place. Consequently, our consumer choices can also make changes. 

Now just to do a quick recap: 

The value of imported goods in the US in 2019 was 3.1 trillion dollars. That is about $9,365 per person in the United States. 

About 53 % of the fresh fruit and 33% of fresh vegetables in the United States are imported. A huge percentage of these products come from countries where farm workers make $2.50 /hour or less. And it is these very people that produce 70% of the foods that the world consumes. 

I read a book recently written by a man called Simon Anholt. Now I do not want to ruin this for you because his concepts are going to be the subject of another podcast episode. But one phrase that I want to share. He said “Be careful to check your privilege.”

Now think about his for a moment. The United States is in the top 10 wealthiest countries in the world. We comprise only 5% of the world population yet we consume 25% of the world’s oil, 23 % of the coal, 33% of the paper products, and I could go on. We demand variety and freshness in our diets yet more than half of the fresh fruit and 1/3 of the fresh vegetables are imported from countries where people have a yearly income less than what the average American spends on StarBucks. 

Check your privilege! 

So, that brings me to your weekly challenge. Just simply go to the Fair Trade website. That is fairtradecertified.org. Or you can just google the term fair trade. Once on their website, click on their products tab and you will see a category called “find products”. On their page, you will find numerous big name companies, and some of your favorites, that support fair trade.

Overall, we have such a high standard of living in the United States. Remember that Choices Make Changes. So make the choice to seek out and purchase fair trade products and help the ones that feed us to have a sustainable lifestyle. 

Well that’s it for this week folks. Again, if you have enjoyed my episodes then please take the time to write me a review and subscribe to the Adventures in Sustainable Living podcast as well as offgridlivingnews.com. 

This is your host Patrick signing off until next week. Remember to always live sustainably because this is how we build a better future.