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A fair trade future

30-Oct-2006

The world needs an independent trade watchdog to properly regulate the international food supply chain if we as a society are to truly create a more sustainable and ethical food market.

This article argues that such a watchdog is in the vital interests of farmers, food firms and consumers.

Growing consumer awareness and concern about sustainable and ethical food sourcing is putting firms in industries like coffee and cocoa under pressure.

 

Images of striking cocoa farmers in Ivory Coast were last week beamed around the world, while a new film, Black Gold, vividly depicts the poverty and uncertainty in the lives of Ethiopian coffee producers.

 

Coverage like this has seen ethical food sales rise strongly in several developed markets. Shoppers in the UK alone were set to spend more than £2bn on ethical foods this year, up 62 per cent from 2002, according to a recent report from Mintel. It said spending would double again in five years.

 

The various certification schemes that allow consumers to make this choice are not going to be a viable option for the whole market, however, whether we are talking coffee, cocoa or cut flowers.

 

Don't get me wrong, I believe a lot of people have done a lot of good work to promote schemes like Fairtrade, which have helped to drag ethical and sustainable issues into the public spotlight.

 

But now we stand at a crossroads. The Fairtrade label will continue to grow and may develop further into an almost super-ethical niche sector, but it and other schemes like it still only make up a miniscule amount of the market.

 

Most coffee farmers, meanwhile, are still being paid less for their beans than they were 20 years ago, according to International Coffee Organisation figures. The gap between retail and grower prices also remains large.

 

There is a moral argument too, of course. How can anybody claim humans to be a civilised, advanced race in a world where the United Nations says 40 countries face acute food shortages and developing countries have actually got poorer?

 

And, on a more practical note, there is that small question of impending ecological disaster, predicted by several top scientists. Yet, it is absurd to demand that developing countries manage their environment responsibly when they do not even have enough to eat.

 

It seems clear that we need a broader approach on trade. The food chain has gone global, but regulation and controls have struggled to keep pace.

 

Establishing a new international watchdog to regulate the global supply chain would provide a framework to make trade fairer, more professional and more organised. The United Nations would be an obvious body to play a key role in this, although co-operation from countries, trading blocs and food firms would inevitably be necessary for it to carry any weight.

 

Yes, food firms and retailers will likely have to make greater commitments to ensure suppliers are treated fairly, and yes, this may cost money. With power must come responsibility, and public concerns over sustainable and ethical sourcing are not going to die down.

 

But, industry would be wrong to assume such a watchdog would act against its interest. It could, for example, provide independent tribunals for disputes between companies and producers, going some way to releasing firms from inevitable accusations of underhand tactics.

 

Current unrest among cocoa workers in Ivory Coast may have been quelled sooner using this approach.

 

It would also provide a wider certification system for companies to display their ethical credentials, escaping the complaint among some in the industry that the Fairtrade scheme effectively labels everyone outside it as unfair traders.

 

Extra schemes providing benefits to producers and suppliers would be free to exist, but this is about establishing a baseline in the sector.

 

For consumers, an independent supply chain regulator would improve transparency in the chain, enabling them to more easily make an ethical shopping choice.

 

For producers, an independent regulator could provide a framework for meaningful change on a broader scale. It would make the supply chain more professional by introducing minimum, uniform standards and rules.

 

And, a development working group including top food processing, technology and packaging professionals, could help producers to examine ways to improve their lot. With commodities and cocoa, this may be to help producers bag more profit by processing beans in their own country instead of handing them straight over.

 

Other initiatives should and must work alongside greater international regulation. For example, Europe's coffee industry is expecting to launch the 4C scheme, which will establish a Common Code for the Coffee Community.

 

This is a potentially ground-breaking move involving most of the big coffee firms in Europe, and it deserves a mention here, although producers in some countries have privately expressed skepticism.

 

Greater international regulation could help schemes like this to flourish. In a world that has become increasingly obsessive over the advantages of a free market system, we often forget that several thinkers intended regulation to be a key part of this economic model.

 

Chris Mercer is editor on BeverageDaily.com and DairyReporter.com. He has also worked freelance for the BBC, Sunday Telegraph and other media. Send any comments to chris.mercer@decisionnews.com .