Who Gains From Fair Trade Certified Products?

Do companies capitalize on our desire to feel good about ourselves? Can they persuade us to buy if they make us think we're doing the right thing?

Here's why I ask. Recently, I received as a gift a bar of "Fair Trade" chocolate that, for a few moments, made me feel really good about myself. Here it is:

The sales copy on the box assures me that my chocolate is not only Fair Trade Certified, but it's also USDA Organic. But wait: that's not even the best part! The best part is that when I buy this chocolate, I'm assured that my purchase has helped cocoa farmers in Bolivia improve their livelihoods. And to emphasize it all, there's a nice photo of a happy, smiling (and presumably Bolivian) woman, improving her life.

Hey, this was the most uplifting thing I'd read all day. And the chocolate was pretty good too. Not awesome, but good. Interestingly, here are the ingredients:


Even more interestingly, look at the lower left corner of the package. It says Made in Switzerland.

Hmmm. Wait a minute.

Okay. The production of high-quality chocolate is high-margin, high value-added work. In other words, the final steps involved in making this chocolate constitute the vast majority of its economic value. So, how happy and uplifted could this nice Bolivian lady really be if almost all of the value in this product was performed 7,000 miles away on another continent? Worse, how does it help her if a good chunk of the ingredients don't even come from her own country?

I felt great about myself when I first started eating this chocolate, but the more I read and think, the more I'm starting to feel like a good old-fashioned sucker.

Readers, what I'm trying to do today is raise some honest questions about Fair Trade products. What exactly does Fair Trade mean? As a consumer, should I be suspicious of an apparently well-meaning company that writes great label copy--and yet sources ingredients and buys finished product from countries other than what their own label says they are supporting?

Is it "fair" to buy a fraction of your raw materials from Bolivia (yet do no value-added work there), and still imply that you're helping some smiling woman in a photo? Is it worth it to us as consumers to pay extra for that?

Or is Fair Trade just a marketing technique to make us feel good about ourselves? Is this just another retail Ninja mind trick that ropes us into paying significantly higher prices for the products we buy?

Readers, what do you think? Does "Fair Trade" make you want to buy? Or is it just another marketing technique that appeals to consumers' narcissism and self-image?

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Anonymous said...

I would not buy this because it is not Kosher (which is a layer that is added to all of my packaged products good, bad, or indifferent.)

However, I have had to buy similar bars because they are the only ones that are Parve. (The regular baking chocolated are almost all dairy.)

So the short answer - no fair trade itself does not make me want to buy. (Nor do those pink ribbons) & while I am fully aware that to an extent, Kosher certification is a marketing technique, it is the one that guides my life & life choices.

Louisa said...

While I agree with your point, that the recipients of the "fair trade" aren't getting all the benefit they could from the product, my understanding is that often people who harvest coffee or chocolate are living under what is essentially slavery, are often children, and work in dangerous conditions. So I still buy fair trade, because it is a way to be sure I am not contributing to slavery or inhumane working conditions.

Anonymous said...


A really good look at a similar topic, concerning coffee.

NMPatricia said...

I sure am hoping you get more comments, because this topic interests me a lot, for the exact reason Daniel states - why does it really matter. Is it for only what Louisa said? I just purchased some small chocolate squares at Whole Foods. A small piece of dark chocolate has replaced dessert for me which is vaguely healthy and keeps the calories down and satisfies my sweet tooth without triggering a sugar craving. I tried the eco bars for a couple of weeks and wondered all the same things as Daniel. This week, I tried small squares of OG chocolate with WF logo on it - supposedly fair trade and made in Italy. Italy??? Definitely screws up any green consideration of sending ingredients all over the globe before they get here.

Just another example unless it grows in my back yard (which not much does), it is tough to be a knowledgeable, conscientiousness shopper.

Thanks Daniel for the blog.

Ronda said...

Thanks for this. I have wondered the same thing about Fair Trade. Anything that significantly increases cost is automatically under suspicion from me, so I'm glad to know about the Made in Switzerland thing. Since I'm also a bit cynical, I tend to even wonder whether they truly treat workers well. Who is there to actually check up on that? How do I know that the extra $$ I pay for that is actually going to better a poor person's life rather than pad rich pockets? Yeah, I wish I could just trust, but honestly, I don't. I've seen SO many scams committed in the name of helping humanity that I question everything.

Anonymous said...

I agree with louisa, I prefer knowing my one addiction (chocolate) is not enslaving small children. But I am also under the impression that all chocolate from south America fits this bill as opposed to south Africa. Also, I am under the impression that organic chocolate is typically from S. Am so also fits the bill.

chacha1 said...

I prefer to buy chocolate AND coffee that are sourced from South America rather than Africa for workers' rights issues noted by others.

As to Fair Trade, I never assumed it meant "made in [whatever country]". Since the term came into use, I've always read it as referring strictly to raw materials pricing.

That is, a Fair Trade certified buyer negotiates a fair market rate for the product rather than seeking subsidies or other government deals, or taking advantage of less sophisticated populations by extortionate practices as many companies have done and still do.

Many if not most Fair Trade certified buyers also buy organic materials, and I try (like others) to always combine the two. Since the imported products to which these terms are applied are uniformly luxuries anyway, paying an extra $1 or so to support better labor practices and better agricultural practices is a negligible markup.

And, I don't concern myself overmuch with the carbon footprint. The major manufacturers of luxury goods (of any kind) are not in the countries from which the raw materials are sourced. Rolex watches are not made of Swiss gold or steel.

Better to buy chocolate made in Switzerland from organic fair-trade South American beans, than chocolate made in Switzerland from African slave trade beans.

Anonymous said...

Sourcing raw materials from third world countries is generally not real helpful--yay if the workers are being paid a little better, but if the processing is done in a different country, it smacks of colonialism. If you interpret "Fair Trade" as supporting local workers, IMO, it's better to look for products that are processed in-country. It's also more green, of course, not to be shipping stuff six different places before selling it. Processing jobs are generally better-paid and bring industry to the country--better to keep that there rather than just sucking out all the raw materials and leaving the workers with a slightly larger pittance than previously.

Milehimama @ Mama Says said...

I do seek out FT chocolate- not because I think that magically it will lift cocoa farmers out of poverty, but because of the child slave labor concerns on cocoa plantations on the Ivory Coast. The Free Trade helps me know that the cocoa was most likely NOT harvested by kidnapped child slaves, and that's important to me.

Same reason I won't buy Hershey chocolate.

Anonymous said...

Some ghriradelli is dairy free

Daniel said...

Great discussion so far. I'm grateful for the conversation and insights.

I'm planning on running a follow-up post next week that will address some of these comments--and ask still more questions.

There are just so many ways to think about this issue. For example, are Apple products "Fair Trade"?

And a more uncomfortably worded question (that I need to figure out how to phrase better): What percent premium is it worth paying to assuage our feelings of guilt? Double? Triple? Infinite? What if the companies know this?

I'll have more on this next Tuesday. In the meantime, keep the insights and thoughts coming!


Milehimama @ Mama Says said...

I think it's more than just "assuaging our feelings of guilt". I mentioned above that I buy Fair Trade because it's one way I can be more sure that the chocolate is not child slavery chocolate. That's a tangible benefit, not just a marketed feeling.

Stephanie said...

I own a fair trade business myself (some food products but primarily home and personal accessories) and I hear sentiments similar to yours from time to time. I’d like to clarify a few points that you address.

Fair trade or not, most chocolate is not manufactured in the same country where the cocoa beans are farmed. Any Fair Trade Certified producer, as Alter Eco is, works directly with small-scale farmers to not only pay fair prices, but also to ensure safe working conditions and environmentally sustainable production methods, protection of children’s rights, and equal opportunity for all workers, particularly the disadvantaged. Fair trade producers are also subject to regular audits by various certifying agencies to assure that they continually adhere to these fair trade principles.

So the true “value-added” component of your chocolate bar is less in forming the raw materials into a consumable bar and much more in creating better lives for farmers.

Since the chocolate you ate is marketed as being from Bolivia, it indicates the majority of the ingredients were grown there. The ingredients from Costa Rica, Paraguay and Dominican Republic would also be from fair trade farmers, since that’s what the Fair Trade Certified seal means. Kind of hard to get photos of all the people involved on that small bar!

Fair trade is a movement begun in 1949, not a marketing technique. Part of the marginally higher price you may pay for fair trade products is actually the mandated fair trade premium. It’s money above and beyond the fair prices paid that goes toward community development—schools, training, health care, etc. not just for the farmers but for their entire community.

One last bit: 1 of every 5 people on the planet lives on less than $1 a day. These are the people fair trade aims to help.

Daniel said...

I was hoping a few readers would articulate the other side of the debate. Thanks for taking the time to do so.

However, I think you might misunderstand my use of the phrase "high value-added work." It would be far better for a far wider range of people in that country to do more of the economically profitable part of chocolate-making there too. When countries start to do more value-added work, all wages and all living standards rise.

Note that this in no way is a criticism of paying farmers a fair wage for their work, nor is it an argument in any way against helping support their communities. I think it's fair to say we would all support these activities. The question is, what is the best way to go about this?

One final (and counterintuitive) thought: Fair Trade may not be a marketing technique, but yet it still is.

In next week's post, I'll frame up some more questions on this subject to get still more reader thoughts. Great discussion so far.


Anne @ Unique Gifter said...

One tidbit, which no one seems to have mentioned yet, is that fair trade products generally attempt to compete at a higher price point and a higher quality product. There is a price premium, so most FT products attempt to hit a higher quality bracket, as well.
Also, as a PP mentioned, the other ingredients would also be fair trade. I do not know the FT ingredient % requirement, but it is very high, maybe 90%. Some products, like milk chocolate hot chocolate, are thus hard to make and still maintain certification.

Luis said...

If you really worry about living conditions and salaries in the developing world, fair trade is only a "feel good" measure that has little, if any, positive impact on farmers. Removing agricultural subsidies and trade barriers in USA and Europe (something for which you can advocate in your own country) would have a much bigger effect.

K said...

Luis, I don't have the power to remove trade subsidies.

I do have the power to but free trade coffee.

And Daniel, are you *really* suggesting they open a chocolate manufacturing plant in a tropical country? Where it is, ya know, *hot* most of the time? You might want to re-think that one :D

As for coffee, most beans are shipped green, and roasted locally (or somewhat locally) as that allows the coffee to stay fresher for longer. So yes, the technically could start roasting operations in the countries of origin, but that might actually result in a lower quality product.

Like others have said, fair trade isn't a perfect solution, but to me, it' worth the "premium" to be able to support workers rights (and BTW, the fair trade coffee I buy, which is roasted in Canada, is cheaper than many other so-called premium brands - I buy it on sale at $12/lb, which is a steal for great tasting, FT coffee! Kicking Horse Pass, in case anyone is interested!)