The Bottom line: Simple Comparative Analysis

 Bottom Line:

Fair Trade USA’s certification program is strong on stakeholder participation and has comprehensive language in its standards; some of its approaches to complicated issues can serve as a model for other programs.  However, FT USA’s program also contains some weaknesses in terms of exemptions from some key labor protections for certain employers, and a lack of clarity in some of its language that could allow a focus on larger scale operations rather than small farms. 

Associated Organization: Fair Trade USA, Scientific Certification Services (verification)

Program Claim(s) in the program’s own language:

A 501 (c) (3) nonprofit organization, Fair Trade USA is the leading third-party certifier of Fair Trade products in the United States. We enable you, the consumer, to make a difference with your dollar. We help people and the planet work in tandem so both are healthy and sustained. We provide farmers in developing nations the tools to thrive as international business people. Instead of creating dependency on aid, we use a market-based approach that gives farmers fair prices, workers safe conditions, and entire communities resources for fair, healthy and sustainable lives. We seek to inspire the rise of the Conscious Consumer and eliminate exploitation.

Web link to program description/label/claim:

SCS Global Services (verification and compliance):

Summary of DFTA findings:  

Fair Trade USA, formerly TransFair, has developed its own fair trade certification program after splitting from FLO, Fair Trade International.   Because it is a new program this evaluation may have to be revised as/if changes occur. 

There are several strengths to the program.  It is generally following best practices of transparency, public and stakeholder input, and has a diverse board of directors.   The language in its standards is generally stringent, and many revisions were implemented this year (2012) based on comments received from stakeholders.  Protections for workers on large-scale operations are rigorous.  The program has also begun working with the certification of indigenous communities in South America.  The strength of the standard, however, is undermined in certain areas by exemptions, as explained below. 

Regarding small producers, the program seems to do well at encouraging the formation of associations, and producers receive a premium over market price, although it is not based on cost of production so may not ensure a living wage income in all cases.   Producers also receive capacity building and training opportunities, as well as access to loans.  FT USA is continuing to implement FLO’s Small Producer Organization standard, and has in addition introduced its own Independent Smallholders Standard, which promotes alternative democratic structures for producers.  While generally stringent, the language revolving around negotiation of contracts with buyers – outside the context of Small Producer Organizations - is in the opinion of the DFTA somewhat less clear than it could be.  FT USA also certifies operations of a large plantation-scale, which is controversial among some stakeholder communities- these larger operations have a more stringent set of labor standards to comply with.

One concern that the DFTA has is that the definition of small producer, as adapted from FLO’s definition, leaves open a potential loophole for producers who could be of a larger scale and with more hired labor than what the public would generally consider “small-scale”.  Small Producer Organizations (as is the case with FLO as well) only have to be comprised of a majority of smallholders, making it possible for a significant percentage of what is presented as a Small Producer Organization to be larger scale operations.  In communications FT USA has informed DFTA that this does not happen in practice but does acknowledge that “mid-sized” farms with up to 25 permanent workers (and presumably more seasonal or temporary workers, up to 100 as mentioned below) do participate.  The DFTA believes the language should be strengthened to prevent larger-scale farms from benefiting from membership in a “small producer organization”, and to be more clear to the public what scale farms they are supporting.

The Small Producer Organization standard as adopted from FLO also contains another limitation, mainly exemptions for small operations from standards governing labor protections.  Although FT USA will be implementing this standard without the built-in scoring system, which represents an improvement over the borrowed FLO model, there is still language in place for a certain percentage of worker protections for workers on farms without a “significant number” of workers, the exact meaning of which can be left to the discretion of the certification body.  DFTA has requested more clarification, and it has been challenging to get a clear working definition.  The program has informed us that generally speaking “significant number of workers” is being interpreted as five workers, with room for flexibility as needed based on the local context.   But this explanation is itself vague and confusing, as the program has not been clear if this means a total of five workers, or a total of five permanent workers, meaning seasonal and temporary workers might be excluded from the determination.  We requested more clarification on this point in particular and were informed in a written response that they do not currently collect data on the numbers of seasonal or temporary workers on their certified operations (versus permanent workers).  Furthermore, they wrote, “If there are ever more than 100 workers present, it is considered a large farm”.  While this is useful and more clear than information provided previously, it is seemingly not available to the public, and in our opinion allows operations to be classified as “small” that do not match the perception of many consumers.

This exemption includes occupational health and safety, wage provisions, as well as the fundamental right to Freedom of Association, and FT USA in this case also extends this exemption to Independent Smallholders who do not meet the same threshold of number of workers.  FT USA has verbally explained this to DFTA as based on the lack of applicability of unionizations to very small farms.  While it is true that Freedom of Association would in most cases apply to smaller operations in a different manner than in larger operations, this right is generally interpreted to apply to more than simply unionization but rather worker organizing even on a small scale.  DFTA believes that while smaller farms should not be expected to meet all the standards a large farm does, any operation that is large enough to hire labor should meet basic international norms.   The worst forms of abuse, including forced labor and child labor, are prohibited in all cases.  It should be noted that FTUSA has informed DFTA that the intent is that FOA be recognized for all workers and that the program will be reviewing its language.  For the time being DFTA considers the language to be clear that the exemption exists and looks forward to a revision.

FT USA prohibits the production of GMO crops and has fairly solid environmental requirements.  Producers are required to follow sustainable agriculture standards that prohibit certain most toxic agrochemicals and govern the use of others, and also include: IPM, water usage, biodiversity, energy usage, waste management, soil and water management, and fertilizer usage.

Pertaining to occupational exposure to toxins and health and safety measures, while workers on large-scale operations are well protected, there are some exemptions in place for workers on farms that are members of Smallholder Producer Organizations with a smaller number of workers (as also discussed above).  Currently FT USA is using FLO’s language for SPOs and has indicated that it may develop its own language in the future.  This would be an opportunity to improve on this.

There is one other controversial issue that should be mentioned about which people will have differing opinions.  A hold-over from FLO’s system, it is the so-called Mass Balance rule which allows for certified products made from a restricted list of certain ingredients to utilize ingredients that do not derive from certified operations.  The crops for which this is allowed are cocoa, cane sugar, juice and tea.  In all cases the volume and quality sold as Fair Trade are equivalent to the volume and quality bought as Fair Trade (taking into account processing yields and losses) so that the certified production is still being supported.  FairTrade USA (and FLO) defend this policy based on the reality of the marketplace for these commodities – doing otherwise, they say, would make it next to impossible to certify these crops.  On the other hand, DFTA is concerned that this creates a complicated system and that consumers are generally unaware that in some cases the products they are purchasing may not actually contain ingredients that derived from fair trade certified farms.   It is clearly a complicated issue; FT USA has responded to this by stating for example that “In the case of cocoa, the vast majority of the world’s cocoa is processed by a few, large-scale chocolate companies, whose processing runs without interruption. Without halting their production or switching all of their chocolate to Fair Trade certified, they cannot guarantee physical traceability.  Not working with these companies would again exclude thousands of smallholder cocoa growers from Fair Trade certification. Our standard on physical product traceability is consistent with that of other leading certification groups.”

Overall FairTrade USA has some real strengths: the standards language is strong, and stakeholder representation is well-balanced and diverse.  However, DFTA encourages the program to close some current loopholes so that there is more emphasis on small-scale producers and that all workers’ fundamental rights are protected, even those on small-scale farms.

 FairTrade USA sumbitted a response to the DFTA evaluations which you can read here.



Key to Chart
The program is exemplary and meets the DFTA's criteria expectations. The program has some innovative approaches to this issue that may serve as a model.
The program appears to have a comprehensive approach to this issue in general alignment with DFTA criteria. There are some concerns or issues to highlight regarding the program's approach to this issue.
The program addresses this issue and may meet some of the criteria, but significant concerns, questions, or shortcomings compromise the approach. There is inadequate information or outstanding questions preventing a reliable assessment of the program's approach to this issue.
The program either does not address the issue at all, or clearly fails to address it in a manner consistent with DFTA criteria. Not applicable / not addressed by program
Summary Indicator
1. Supports small scale and/or family farms
2. Ensures decent working conditions for farm and food workers
3. Supports long-term, direct, and fair trading relationships
4. Adequately restricts materials and practices that are harmful to people and the environment
5. The program is implemented well and has thorough monitoring in place

For a print version of this summary, please click here.