Profile: Fairtrade International (FLO)
Help for farmers to form cooperatives
Fairtrade certifications are only awarded to cooperatives. Once farmers are organized in cooperatives there is less chance for them to be exploited by traders as they can share information amongst each other and bargain as a group.
Fairtrade helps cooperatives to set up training procedures that help farmers to increase their overall farming skills.
Fairtrade guarantees farmer cooperatives a minimum price of 2000$ per ton. Although this price has not been undercut for more than a decade it protects farmers from extreme price fluctuations.
Intransparent premium distribution
Fairtrade does not disclose, where the premium that was collected goes. Especially consumers never know, how much of the price of the product reaches the farmer. In Germany for instance, only 1.2% of the price of Fairtrade certified chocolate is passed on as premiums
No real proof of positive impact at all
Fairtrade has yet to show any hard evidence as to whether there is a solid positive impact for cooperatives that undergo certification. There are an amplitude of cases made that say Fairtrade even has a negative impact overall. A good overview can be found on Wikipedia.
No jobs created outside farming
In Africa, where most cocoa comes form, all the certified cocoa beans leave the country before being transformed into chocolate. Only exporting the raw materials does not create any new jobs.
Too much volume certified
Fairtrade has certified so many cooperatives, that the supply of Fairtrade certified produce surpasses the demand by a wide margin. Kuapa Kokoo for instance, the largest cocoa cooperative in the world, can only sell less than a third of their harvest as certified beans, the rest is sold into the conventional market. The certification efforts and costs occur for the whole harvest.
Fairtrade helps the rich
Fair Trade is profitable for traders in rich countries. It is also aimed at richer farmers: in order to join Fairtrade, cooperatives must meet quality and political standards which means their farmers must be relatively skilful, educated and well capitalized, and critics point out that these farmers are, therefore, far from the poorest farmers.