The Challenges of Marketing Fair Trade - Wynne, Sandy

adequate food on the table for his/her family. This problem challenges the consumer’s
perception that the farmer, not just the cooperative, receives a fair price.
Cooperatives do receive fair prices for their products as defined by FLO. These
prices are designed to cover production costs, costs related to complying with
certification standards, and the cost of living. Producers are paid after expenses are
covered; what is left over is divided among the farmers. Social premiums can only be
used for community projects. Unfortunately “the full benefits of higher prices do not
always trickle down to small-scale farmers” (Daniels & Petchers, 2005, p.26). Given
what some studies point out, concerns of food security suggest that the prices are not as
fair as they should be. “Certifications are not likely influencing the level of food security
of coffee households” (Mendez et al., 2005, p.30), but it is important to remember that
individual farmers in different cooperatives experience varying degrees receiving a
greater portion of the net profits from their respective cooperatives. Testimonies on Fair
Trade NGO websites often demonstrate how Fair Trade has made a big difference in the
lives of producers. While those differences are important, the realities may not always
match up with promotional material.
Along with the question of how fair the price is, some critics challenge the
fairness of FLO’s methods of operation. The notion that, as of 2004, the producers must
pay for their certification and annual inspections when their lives are a constant struggle
to survive may be seen as inherently unfair. The initial certification can run into
thousands of dollars.
In addition to the burden of certification and inspection fees, another aspect of the
fairness issue relates to exclusivity. When commodity prices are low, the demand for
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