DEBATE: Should the Fair Trade Model Accommodate Hired Labor on Large-scale Farms

Introduction by Fair World Project
with opinions from Rob Everts, Rosa Guamán and Tim Beaty

The fair trade movement was born from small-scale organized producers working in solidarity with Global North consumers, activists and alternative trading organizations, together pursuing the goal of creating a fair and transformational trading system. Small-scale producers are a core part of the founding principles of fair trade, and they have traditionally struggled to overcome a lack of land rights, extortion by intermediaries, a lack of human and indigenous rights, deficient education and healthcare infrastructure, and repressive governments. They are vulnerable, excluded and under-resourced in the global market.

The fair trade concept was for small-scale producers to organize and work together with solidarity partners in the Global North, so they could take advantage of economies of scale and more easily access markets and capital. By organizing, they could work towards creating sustainable changes through policy work and building communities. In order to increase sales and awareness, a fair trade label was created as a “guarantee” to help solidarity consumers support organized small-scale producers through their purchases.

Over the last decade, fair trade certification systems have added large-scale agricultural or plantation production into their schemes. This trend started by only including commodities that were not traditionally grown by small-scale producers, but it has since expanded to compete with traditional small-scale producers of coffee, cocoa and other fair trade products. We wanted to hear from some industry experts about whether this is the right direction for the fair trade movement.

We asked Rob Everts, co-president of Equal Exchange and previously a union organizer with United Farm Workers (UFW), Rosa Guamán, a small-scale producer, co-founder and manager of the cooperative association of medicinal and aromatic plants in Jambi Kiwa, Chimborazo, Ecuador, and president of the board of the Small Producers’ Symbol, and Tim Beaty, Fairtrade America board member and Director of Global Strategies at the Teamsters Union, to answer five questions regarding hired labor situations and fair trade:

1. We know that most farms, even those that are small-scale, rely on extra hands at least occasionally. This ranges from a few family members or neighbors for many small-scale farms to large numbers of seasonal workers for many large-scale farms. What essential labor principles should be upheld at any scale?

• Rob Everts: At any scale, a minimum wage is necessary, which feels minimalist but, having spent years working with small-scale farmers who barely are able to make a living, to declare a higher aspiration feels unrealistic. The other basic principle that even the tiniest family farms should uphold is providing safe working conditions.

• Rosa Guamán: We cannot compare the situation of small farmers, who mainly use family labor, with that of large producers and businesses that depend entirely on hired labor as a means of production. For our families, smallholder production is part of our ancestral culture. We work the land collectively and share our home and food, integrating the workers who come to support us when needed. In a private company, there is no such equal relationship. In any case, it is important to give decent treatment to workers.

• Tim Beaty: We have worked for a hundred years to educate U.S. consumers that the existence of a union with a collective bargaining agreement is the only just and efficient way to ensure fairness and a voice for workers in the sourcing, processing, logistics and sales of a product. There is no means other than a union to guarantee labor standards that support the democratic organization of workers so that they sit as equals with employers in negotiating the terms and conditions of their employment. There are a number of models of union representation for seasonal agricultural workers out there that begin with a dialogue involving the appropriate part of the labor movement.

2. All advocates of social justice wish to see exploitation eliminated from agriculture. What are some considerations that are important to include in standards and auditing of larger farms with hired labor and their eligibility for a market-based ecosocial program that may not be important for a smaller-scale farm?

• Rob Everts: Since large-scale farms are rife with wage abuses, documentation of payment and hours worked should be expected. Freedom to organize and to have the ability to negotiate collectively is also essential. The same standards and auditing should be applied to labor contractors, since they provide large companies with protection from accountability, keeping their businesses at a distance from any abuses. Semi-bonded servitude situations leave people deeply in debt. Auditing schemes need to guarantee that housing is sanitary, structurally sound and not disproportionately priced. Often, if housing is part of the arrangement, workers must buy food from the company store at exorbitant prices and get charged to be driven to the fields. These abuses keep workers from making money, workers who are often kept against their will.

• Rosa Guamán: It is clear that all forms of human exploitation are bad and must be combated. In a private company, the owners by definition base their profits on the exploitation of labor. In these cases, it is important to me that the legal rights provided to workers to enable a life of dignity are respected. For that, there are national laws and international labor conventions. Any worker should be entitled to protection under those laws.

• Tim Beaty: The standards designed for small-scale cooperatives did not transfer well to larger holdings. For example, a premium committee on a plantation often hinders the organizing of workers. I joined the Fairtrade America board because Fairtrade International recognizes the labor movement as the voice of workers. Our input has improved labor standards, and more importantly implementation, so that workers actually have access to their labor rights. For example, we have changed the rules so that some of the premiums can be added directly to workers’ incomes. We have not solved all the key obstacles yet, but Fairtrade International is getting closer, with labor as a respected partner.

3. Although there is general agreement that all agriculture should be free of exploitation, there is disagreement about whether “fair trade” is the correct model and terminology for large-scale farms or plantations, especially those that utilize seasonal or migrant labor. Do you believe that there is value for producers, workers and/or consumers in distinguishing between small-scale “fair trade” and larger-scale “fair labor” in the marketplace? At what point, if any, is a farm too big to be considered a “fair trade” farm, and what are the factors that would exclude a larger farm from inclusion in fair trade?

• Rob Everts: In hired labor situations, plantation owners already have access to the market and to capital, and they can take advantage of economies of scale. We believe that fair trade, at its core and true to its founding, aspires to be transformational: it challenges the prevailing model of international trade, which is dominated by large players and where smaller-scale producers are isolated from the market. At Equal Exchange, we always believed that only through supporting the democratic organization of small-scale farmers to gain direct market access can this transformational vision be realized. The larger corporate players will not relinquish their advantages, and no fair trade participation can change that, so if you subscribe to the fundamental purpose of what fair trade was originally for and what we aspire to be, then moving those players into the system, even if they are treating their workers a little bit better, does not address the core objective that many of us are trying to achieve.

• Rosa Guamán: Unfortunately, fair trade has become something different, without the agreement of small producers. Now we see that fair trade can represent huge private flower or banana plantations. That is why we now again claim our identity as organized small producers within the fair trade movement through the Small Producers’ Symbol. It would be better if the term “fair trade” were not used to talk about trade that is respectful to workers of private plantations, regardless of size. Our image of small producers has been used many times to sell other ideas, and we are not going to play that game anymore.

• Tim Beaty: Unions are important stakeholders in many of the fair trade movements in Europe, promoting fair trade among their members and serving on governing bodies. I am advised that when expansion was first considered, labor did not propose or promote the idea of expanding certification to tea, bananas and other products primarily sourced from large farms. Nor did we encourage the trend towards ever-larger growers being designated as small-scale. When worker rights are respected on plantations, small producers have fairer competition. Fair trade advocates want sustainability and the end of corporate exploitation in agriculture; workers empowered through the union can be a powerful ally of smallholder cooperatives in working towards those goals.

4. Building on the previous questions, describe what you see as the ideal marketplace for social certification schemes for large-scale farms. For example, should they remain in the current fair trade system (and, if so, what improvements would you recommend), should they be distinctive from fair trade in standards and labeling (for example, labeled as “fair labor”), or should market incentive labels be reserved only for small-scale farms? What are the key factors that inform your view?

• Rob Everts: As I mentioned previously, the larger players will not relinquish the advantages they have as a virtue of participating in fair trade. So, if you believe as we do that fair trade seeks to end the dominance by big players of entire industries, sectors, regions, crops and countries, then having a role in fair trade is anathema to that. I would not house a hired labor scheme in any fair trade system, because those farms already have market access, access to bank loans, relationships with governments, and economies of scale – all of those things that small players do not have and that fair trade was originally designed to help achieve. Workers also need protection from environmental abuses, such as pesticides, but since for this discussion we are mostly talking about social aspects, it seems like a fair labor scheme would be appropriate, be it unionization in every case or not, just like in our situation with cooperatives, where not all are legally established as cooperatives, but where the key is democratic association in which people have access to power and decision-making.

• Rosa Guamán: Plantations, however just they may be, represent a model that today competes strongly with organized small producers. They have lower production costs, but they also have fewer values and social, economic, ecological and cultural impacts than do small producers’ organizations. They are different things.

• Tim Beaty: Fair trade and the labor movement share core values, including dignity at work, global solidarity and a living wage. When we work together, I believe labor and fair trade can educate and organize consumers to become a potent force for social justice. The U.S. labor movement encourages consumers to use their purchasing power to “Look for the Union Label” and boycott anti-worker employers. Fair trade empowers small-scale farmers organized in cooperatives by linking them with consumers through a market incentive label. Most consumers expect that a company marketing a product as fair trade cares about commercial, environmental and worker injustice.

5. What are the challenges for a fair trade (or fair labor) system for hired labor in countries with national laws that limit worker rights or the rights of migrant workers?

• Rob Everts: Just as migrant workers were excluded from the national labor laws in the 1930s and from prevailing minimum wage laws in this country, workers are exploited and at a large disadvantage in many countries with limited worker protection laws. Organizing is fundamental, whether under the legal framework or extra-legally. In the 1960s and 1970s in California, when farmworkers organized without the benefit of labor laws, strikes were broken, and workers ultimately had to go to the court of last resort – the boycott – calling on consumers. And they ran effective boycotts that produced union contracts; as brutally difficult as that path is, it may be the only viable path to make these types of gains in large-scale agriculture overseas.

• Rosa Guamán: It is important to show solidarity with the workers’ struggle for their rights. There will always be a need to put pressure on governments and companies to respect the rights of individuals and peoples; they will not do it by themselves.

• Tim Beaty: At our end of the supply chain, labor laws in the U.S. are weak; thus we urge the fair trade community to respect labor rights in processing, logistics and retailing in the U.S. When Theo Chocolate deploys union-busting experts to repress organizing among their Seattle workers, and IMO certifies them anyway, everybody loses. Migrant worker access to their labor rights in agriculture is a challenge in most countries – good laws or not. This is another opportunity for fair trade and labor to coalesce.

The comments and answers provided by the writers represent their own views and should not be taken as endorsed by Fair World Project.

To better understand the credibility of certification schemes in the marketplace that claim to be fair trade, and to differentiate between fair trade and worker welfare programs that are striving to protect workers, see our Reference Guide in the download version of this publication.