In Search of Fair Trade

I’ve been using fair trade coffee and fair trade for many years in my home kitchen, but had never thought of actually using these products on an industrial level until one evening watching George Stromboulopolous on CBC tv’s The Hour talked about Fair Trade chocolate. The two most important things that caught my attention were that FT cocoa beans are not picked by children nor sprayed with pesticides.

In passing, I asked my husband why we weren’t using FT ingredients in our business, he replied that sometimes we did, but he hadn’t really thought about it. Discussions ensued and we realized that we were going to an awful lot of trouble to find great quality chillies in countries where Fair Trade was probably already working and we could save ourselves a lot of trouble by letting them do the work.

We were wrong.

When I contacted the Fair Trade Certification board in Germany I learned that there are currently no standards set and no market for Fair Trade chili peppers and in fact the reason for this is because nobody with the expertise required was involved in Fair Trade. Well, we use several thousand pounds of chillies a year, so in my eyes, there certainly is a market for them and we’ve already established standards for the peppers we use, so I took the leap. I volunteered Brooks Pepperfire Foods Inc. to source peppers for Fair Trade. Well, I quickly learned that every country has a regional board called TransFair. Here, in Canada, it’s TransFair Canada, in the US, it’s TransFair US, well, you get the idea. I also learned that the reason that each country has it’s own regional board is because of regional government import rules differing. I also learned that in order for someone to sign on to Fair Trade as an importer, they need to be sponsored by their regional board. So, I contacted Rob Clarke, the Executive Director of TransFair Canada and told him I wanted Fair Trade peppers. Some discussions ensued and lots of learning began, and several months later, here we are, well on our way to creating Fair Trade standards for chili peppers, registering farmers and creating a market.

Over the past couple of weeks, I’ve spent a great deal of time studying the prices at which other vendors are selling peppers. I’ve learned more about pesticides than any woman has a right to know and learned that there is a serious need for fresh clean peppers year round. It’s a daunting task infiltrating a well-established market with produce that surprisingly has never been available, even though there is a huge demand for it.

So far, I think the most exciting part of the entire project is discussing the opportunity for certification with the farmers. Explaining to them what is possible for their future and how Fair Trade is going to benefit not only them, but their families and employees as well. We’ve run into some pretty scary situations already in sourcing our peppers. In some countries political unrest becomes an issue when we’re trying to get peppers out of the country, we’ve actually been told that armed guards are required to get the peppers to the airport.

What is so moving about the entire project is what can happen with the social premium that the fair trade farmers will receive for their peppers. As buyers, we are expected to work directly with the farmers to develop commercial relationships, trust and mutual support. We are expected to adhere to what seems to be an extensive list of criteria established by the Fair Trade Labeling Organization, aka FLO-Cert.

We buy a lot of peppers for our own needs over the course of a year and because we have to source fresh peppers all over the world it isn’t much of a leap for us to source the same peppers for FLO. After all, the questions we need to ask for ourselves seem to be the same questions we need to ask for FLO. We are expected to give the farmer a fair price for their commodity and that price point provides a living wage for the farmer. In addition to the price, we offer a commitment to developing a long term business for the farmers so they will be capable of future development and investment in their farms.

They in turn agree to provide good working conditions for their employees, and ensure safety procedures and adequate health standards for all workers. In addition, farmer/producers must employ democratic working processes. The democratic standard ensures that democratic decisions are made concerning how the fair trade premium will be spent. Who better to decide how to improve their living standards, than those living them. Finally, the farmer agrees to use environmentally sound production methods.

Fair Trade generally helps promote human rights, especially those of women, children and people with disabilities and as the local situations improve, they are expected to continuously improve upon these standards.

As we have announced our intent regarding Fair Trade, many people have asked us how this impacts local farmers. Fortunately, it’s not just about where we buy our peppers (or other ingredients), it’s a way of life. Originally, when we first started buying peppers, rather than growing our own, we gave priority to local farmers. We make a point of buying peppers of great quality, with few to no pesticides at a fair price - fair, not just to the farmer but to ourselves as well. We’ll buy local peppers, when they’re ripe, and that’s a huge benefit to our community. It defends our sovereignty, saves us the costs of fuel and energy, helping us lower our environmental footprint and provides us with the freshest peppers we can possibly get. Unfortunately, our community can only give us five weeks worth of peppers in the October, if we’re lucky. The rest of the year, we have to go where the peppers are ripe.

So for us there was only one question left to answer. Does Fair Trade really do anything or is it simply a way for us to feel good about what we would like to think our pepper dollars are doing?

Activists who are against globalization criticize huge companies for not being altruistic enough, because they can probably afford to be even more altruistic than they are. One example of this is Starbucks who, although they are the largest roaster and retailer of fair trade coffee, by far, is heavily criticized, because less than 10% of their bottom line is in Fair Trade coffee.

Visiting Fair Trade plantations, one finds better housing, better facilities and better schooling than in neighbouring plantations. Critics feel this is unfair because neighbouring plantations aren’t benefiting directly from the social premium that the Fair Trade plantation receives.

Critics of Fair Trade suggest that fair trade products are going to cost the consumer more than the non-fair trade equivalent commodity. Generally, this is untrue because the Fair Trade purchaser in going directly to the farmer succeeds in cutting out, occasionally, several levels of middlemen who add a premium to the price of the commodity every step of the way. Fair Trade often succeeds in increasing the price the farmer receives while still leaving ample room for the Fair Trade premium and a decreased cost to the purchaser. Of course this point, in and of itself feeds yet another criticism of Fair Trade. If you had taken economics 101, you would have learned that increased prices tend to stimulate production. Increased supply will decrease prices in the receiving market, thus, an increase in supply will lead to a disproportionate drop in price for North American farmers. So, for our local farmers, it is suggested that Fair Trade isn’t fair at all. What these critics neglect to realize is that our local farmers have no difficulty getting a fair price for their commodity. Where an american farmer might receive $7 lb for orange habanero, farmers in Haiti, India or Africa may only receive .45 cents.

Fair Trade isn’t about giving farmers something to which they are not entitled. It is about justice. It is about giving second and third world farmers the same price they would receive if there were a level playing field. It is about treating farmers on the other side of the world exactly the way local farmers demand to be treated. Fair Trade farmers are often on the receiving end of an unfair trade system. One where their competition is given tax subidies that allows them to flood the market with below cost commodities. Such subsidies make it very hard for second and third world farmers to compete and is truly, for them, an unfree-market system. Fair Trade helps level that playing field.

We’re going to buy peppers to make our sauces and in helping get these commodities fair trade certified we can empower farmers and farm workers to lift themselves out of poverty. It is our goal to help these farmers develop the business skills necessary to compete in the global marketplace. We’re hoping that the peppers that we bring to market for these farmers will be competitively priced with other gourmet, specialty peppers. We do expect though, that they will be more expensive than mass-produced general quality peppers. It is possible, depending on the farms’ locations that the peppers could be more expensive. Many of these farms lack the extensive shipping and logistical capabilities of the vertically-integrated, multi-national fruit companies from whom North Americans traditionally buy peppers. Also, we expect to see variances in the price at market of peppers depending on the demand the markets put on the various breeds of peppers we manage to get certified.

In the end, though, regardless of TransFair or FLO, it is Brooks Pepperfire foods who will set the price at which we make these peppers available and our pricing won’t be controlled or influenced by either of these organizations. We do expect, though, that the more purchasers we find for these peppers, the larger the market we can create for these peppers, and the more companies, retailers and consumers who support us by joining us in bringing these peppers to market, the more ability we will have to lower prices.

I expect it’s going to be a wild ride and we look forward to sharing the project with you.