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Fair Trade Labels: Some Good News, a Challenge and a Call for Transparency

For related articles and more information, please visit OCA's Fair Trade and Social Justice page and our All About Organics page.

As more and more people demand products that are produced ethically with respect to farmers, workers, and the environment, more and more companies are jumping to supply them. This is good news for consumers who can find more products that match their values. It’s also good news for farmers when this translates into better payment terms and for workers when it translates into safer working conditions, better wages, and more rights.

But this rapid growth of ethically labeled products also represents a challenge.  First, not all labels mean the same thing. Fair trade labels generally guarantee that farmers are paid a fair price, long-term relationships are developed, a premium is paid toward community development projects, some basic environmental protections are in place, and other principles of fair trade are incorporated. Standards that must be met for other eco-social labels may be more limited in scope, focusing for example only on price as is the case with most "Direct Trade" claims, or even focusing only on workers on large farms where landowners are already well off.

For single ingredient products, like coffee, consumers may more easily navigate this landscape by identifying a label that matches their values and purchasing coffees that meet those label’s standards, or by sticking with a single brand they know they trust. Advocacy organizations like Fair World Project can help with this navigation.

For products made of multiple ingredients from many sources, the confusion is magnified. A label that looks nearly identical to the label used on a bag of coffee may appear on a jar of iced tea, a chocolate bar, a lip balm, or other product even though there may only be one certified ingredient in that product and that one ingredient might be as little as a fifth of the total product make-up.

In some ways, this is more good news. It indicates that even conventional food manufacturers with complex multi-ingredient product lines are recognizing that they need to source key ingredients through ethical supply chains that ensure fairness and dignity to farmers and workers.  Yet, independent consumer research has shown that putting a fair trade seal on a product with as little as 20% fair trade content is misleading to consumers, who have difficulty distinguishing versus a majority or entirely fair trade product. And when this information is lacking, it is difficult even for advocacy organizations like FWP to untangle the confusion.


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