Fair Trade and the Food Movement

“Mass movements can rise and spread without a belief in God,” the social critic Eric Hoffer once wrote, “but never without belief in a devil.”

Few groups better embody this adage than “the Food Movement”- the amorphous but impassioned effort to bring responsibly produced food from farm to fork. The Movement, which has surely done more than any other reform effort in American history to provoke popular interest in sustainable agriculture, encompasses such a hodge-podge of sub-genres-localism, organic, “deep organic,” “artisanal” production, anti-GMO, foragers, farmers’ markets, free-range meats, slow food, etc.-that it couldn’t possibly be said to worship anything so unifying as a single God. But let there be no doubt about the devil, the diabolical force that gives wholeness to the parts and venom to the rhetoric. The devil lives. And it goes by the name of Big Agriculture.

Big Ag is a fat target, repeatedly pummeled, and much of the time deservedly so. In addition to heaping ladlefuls of invective upon the Cargills, Monsantos, and McDonalds that embody the inherent evils of agribusiness, the Food Movement has responded to the industrialization of food by developing niche alternatives intended not so much to reform Big Ag as to bypass it altogether.? Acolytes want to turn on the anger, drop out of the system, and tune in to a fundamentally different set of agrarian ethics. How these renegade goals will play out in the 21st century, despite the movement’s explosive start, is anyone’s guess.

The recent history of Fair Trade coffee offers a telling suggestion, although perhaps not an optimistic one, of what lies ahead for the Food Movement should it insist on trying to operate outside the bounds of conventional markets. The Fair Trade system, which imposes a price floor to protect growers if the market price of coffee falls below a certain level, promises to return to workers a higher wage, better working conditions, and incentives for more sustainable practices.? It’s hard to gainsay these values, ones that the Food Movement has, much to its credit, made central to its mission. Who, after all, doesn’t think agricultural workers deserve more social justice? Who doesn’t think the environment should be respected by the hardworking men and women (and children) who grow our food?

But the problem with Fair Trade coffee is that as the program scales up, the alternative market ethics it wants to sustain collapse.? Inevitably, the Fair Trade market becomes subject to the same laws that drive the conventional commodities market.? When the price of coffee drops, the appeal of Fair Trade’s price support lures growers into the cooperatives that sell coffee under the Fair Trade label. As poor growers rush into Fair Trade agreements, the supply of Fair Trade coffee rises. Protected by the price floor, the Fair Trade coffee remains inflated despite flagging demand. What Fair Trade importers thus end up doing with the excess Fair Trade coffee is dumping it-upwards of 75 percent of it!-on the conventional market.

And this is when the rhetoric and reality of Fair Trade really lock horns.? Excess supply dumped into the conventional market has at least two effects that run counter to the stated mission of the Fair Trade label. First, even though we’re not talking about a great deal of coffee, the dumped Fair Trade beans still add to the supply of conventional beans, thereby driving the price downward and, however unintentionally, hurting poor farmers growing for the conventional market.

Second, as the gulf between supply and demand grows, it becomes harder for cooperatives to enter into Fair Trade agreements. Whether through more expensive certification procedures or higher costs of inspection, the barriers of entry go up, leaving the Fair Trade market to an exclusive handful of producers. Gawain Kripke, Director of Policy and Research at Oxfam America, explained in an e-mail that “as long as fair trade only relates to a small fraction of trade and production of only a few select products, its impact will remain limited.” Kripke observed that Fair Trade markets are growing, and that they have benefitted many poor producers, but added that “they remain tiny in relation to overall trade.” What’s “desperately needed,” he added, was “a broader reform of trade and agricultural policy.”

I bring up the case of Fair Trade because the Food Movement-driven as it is by the Big Ag devil-is currently gathering steam around a similar idea: it wants to go “beyond the barcode.” Not unlike the Fair Trade system, the idea here is to find, as Michael Pollan recently put it in The New York Review of Books, “a new social and economic space removed from the influence of big corporations on the one side and government on the other.” My sense is that no matter how honed the Movement’s dedication to food and social justice may be, no matter how heady its animating slogans, the quest to go beyond the barcode-to find that “new social and economic space”-will find itself ensnared in the same economic and historical realities that have so severely compromised the initial promises of Fair Trade.

More to the point: the barcode, and the global system of commercial exchange it represents, cannot be dismissed, ignored or bypassed. It’s part and parcel of a deep history that our generation has (for better or worse) inherited and, as such, it must be confronted head on and reformed from within. Fair Trade reveals an unavoidable reality that will likely nag the Food Movement at every turn throughout the twenty-first century. The collective effort to drop out of the industrial food system and pioneer a fresh path might succeed when it stays small and can reliably depend on the sustained goodwill of consumers willing to seek reform through the fork, but it will likely backfire when it scales up. And sure, small might be beautiful, but small is also small, and goodwill — well, goodwill is a terribly fickle impulse.

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  1. Mike D. says:

    Thanks for posting this, Mr. McWilliams. It is a topic I’ve been giving a lot of thought to recently, as I live in a fairly wealthy area, meaning that you can’t swing a cat anywhere without hitting a couple “health food” stores.

    I generally agree that the food movement seems like a great idea but isn’t going to scale well at all, and possibly for different reasons. I look at my favorite feature of the food movement, which is removal of sterilized GM crops (ensuring continuing revenue for seed retailers) and non-use of toxic pesticides and hormones, and those are what I tried scaling up. America is still the world’s breadbasket for better or for worse – we provide the lion’s share of the world’s grains. If GM crops and pesticides and hormones increase crop yield by (making up a number here) 50%, removal of these techniques would drop crop yield correspondingly. How will the rest of the world and the US react to this epic supply decrease?

    We feed the world right now, and the food movement’s goals are at odds with this – advanced ag techniques like these seem to be vital for feeding as many people as there are in the world, so unless we’re ready to stomach major unrest and the tragedies of mass starvation, we should probably take a good hard look at that problem before getting too crazy with the natural food.

    Thanks for the post?

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  2. Brett says:

    “social justice”

    Did I really just read those words on an ‘economics’ blog?

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  3. Joe D says:

    I thought the whole point is that it’s not supposed to scale up at all. Small farms and short transportation distances are all about staying small and local.

    Fair Trade for exotic (i.e., long-distance) foods is related, but not the major issue of The Movement (your capitalization).

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  4. PaulD says:

    I agree that Pollan and his ilk are leading a faddish and self-satisfied movement. But there are people like Wendell Berry — who actually is a farmer, among other things — that have been saying similar things and are worth listening to.

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  5. Sebastian says:

    McWilliams studies these movements, yet I’m always puzzled that he fails to address central parts of their argument. I find it hard to believe that he doesn’t know about them, because they’re central to those movements.
    I think a critique of the food and/or fairtrade movement is possible, but if you think you’re right, why shoot at strawmen?

    For fairtrade, for example, one of the crucial aspects that all contemporary fair-trade projects include is upgrading of the communities they are involved in. In most cases that involves both skill upgrading in the production of coffee that will enable coffee producers to ask higher prices on the world market (even medium-quality coffee buyers such as Starbucks are paying fair-trade level prices for their coffee in return for high and consistent quality, for the gourmet-range micro roasters that’s the case across the board).

    Secondly it also involves regular schooling and education in the communities that allows members to migrate to other, potentially more profitable fields of economic activity. Fair trade is a way to achieve that through a dignified, production based approach, rather than through a top-down donor based approach.

    Thirdly, it’s always been a political movement, where consumers try to send a signal and raise awareness about conditions on the agricultural value chain. I think that part has actually been quite successful. Ignoring it means not getting an important part of food-based politics.

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  6. Michael says:

    Again we see a fact-free Freakonomics.

    Nice hypotheticals, though.

    But hey, let’s say ALL coffee became Fair Trade, or even the vast majority of it. The cost of production would then accurately reflect the needs of the people working on the farms across the board. Costs are costs – something that we sadly forget, with our heavily government-subsidized domestic crops.

    Then there’s the fact that as much as you’d like to tie in to it, and as has been mentioned by other commenters, about all Fair Trade and local foods have in common is that they both deal with food. Local foods are expressly intended NOT to scale.

    New York City would require more land to grow local foods than Omaha, sure, and costs might be higher. Maybe people who want to live healthier will have to move themselves to where the food is. But that’s why you live somewhere – quality of life.

    All in all, nice try, but we’re sending you back to the drawing board on this one.

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  7. MikeD says:

    You can no more repeal the laws of economics with legislation than you can with wishful thinking and idealism. Economics is really the most fundamental of the social sciences, you cannot beat the laws of economics. As soon as there is an imbalance in any system, the arbitragers will show up to profit from that imbalance.

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  8. frankenduf says:

    i think the ethical point is that the corporations have too much power regardless of good or evil- buying up peasant land for agro export while the surrounding communities go hungry is not something that the locals want or need, good, evil, or indifferent

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