The High Cost of Certification
Posted in: Opinion
Kristy:
The moral mafia I am referring to is not FLO, it's supporters of "Fair" trade who have not actually spent any time to learn what is really going on.
It's the general consuming public that assumes that "Fair" trade MUST BE FAIR just because there is a certificate and who demands that products/ingredients must be FT & Organic without really understanding what that means. Like many minorities, they can be very vocal and tend to be passionate, so they garner a lot of attention and can exert outsize influence.
Chocolate Life Nat Bletter posted a link to a very interesting thesis on FT coffee in Laos that clearly reveals some of the potential (and real) flaws in certificate programs as well as some of the unintended consequences of such programs. ChocolateLife member Cristian Melo has posted a link to a fabulous thesis he did on cocoa in Ecuador.
Your numbers above clearly show that the direct economic benefits are hard to justify. My contention has always been that if FT was so great why aren't there many, many, many more co-ops who are FT certified? Could it be that the value - delivered to the grower - is not as rosy as the picture painted to the consumer? Could it be that it's so expensive that a significant percentage of certification fees is paid by third parties (including NGOs and taxpayer-funded aid programs)? Perhaps more importantly, the finances of these certification organizations is far from transparent. Given their demand for traceability up the supply chain you'd think that delivering reliable numbers for quantities of product moved and the value of the social premium paid would be easy to publish (and would be something they would be proud to publish). Yet, getting such figures is NOT an easy task. I have been waiting since May for "reliable" numbers from FLO's press office and have been politely stonewalled every time I have asked.
I think that FT (as practiced by FLO, RA, and others) is a part of an answer, but not the answer. Critical examination of the value these programs actually deliver - relative to the value reaped by the program itself and upstream actors in the supply chain - needs much closer examination. At the moment, it costs a company like Kraft almost nothing to gain FT certification. However, they can charge a premium for FT certified product (the market will pay for the perceived social benefit), so in the end, Kraft makes millions more than the producers do.
Is that "fair?"