Co-ops and Fairtrade: The business of empowerment

Written by Margot Conover/Fairtrade America

Coffee sourced from co-ops in Guatemala has Fairtrade certification through an association of co-ops, bringing the premiums back to community members.Coffee sourced from co-ops in Guatemala has Fairtrade certification through an association of co-ops, bringing the premiums back to community members.Coffee sourced from co-ops in Guatemala has Fairtrade certification through an association of co-ops, bringing the premiums back to community members.As NCBA CLUSA celebrates National Co-op Month, we're also spotlighting the partnerships that support co-ops around the world. October also marks Fairtrade Month! Below, Margot Conover of Fairtrade America explains why co-ops are integral to Fairtrade and how the certification can give farmer-owners an added boost in the marketplace. Looking for a way to celebrate both Co-op Month and Fairtrade Month? Check out the resources at the end of this piece:

Small farmers play an essential role in keeping us all fed, but they are under growing pressure from—among other things—unfettered globalized trade, climate change, land grabs and conflict. Beyond the borders of the U.S., cooperatives have played a key role in helping small farmers find an edge in the market. But by organizing themselves, they can have a stronger voice and greater chance to create a better future for themselves.

Collective, democratic empowerment is at the heart of Fairtrade, just as it is central to the spirit of the co-op movement. Franz Van Der Hoff, one of the founders of Fairtrade, said "The best way to put the human back into the globalization process is to look from below, to be democratic, to see where the majority is at." For Fairtrade farmers, this begins with smallholders getting organized.

Fairtrade's approach is rooted in people coming together and building organizations that grow into viable businesses, develop greater bargaining power and contribute to the fabric of their communities.

Fairtrade's experience shows that when farmers and workers organize themselves, they can achieve startling results. The COAGRICSAL Coffee Cooperative in Honduras began in 1994 when 22 farmers gathered under a fig tree and decided to sell their coffee together. Now, 700 members sell nearly 4,500 tons a year, employ more than 100 staff and benefit 1,500 families. And that story continues for many of the cooperatives among the 1,200 Fairtrade-certified producer organizations worldwide.

While small farmers in the U.S. may be a long way from Central American coffee farms, they're connected through a global, inclusive cooperative movement that is slowly but surely empowering small farming communities to take greater control of their lives and futures.

Fairtrade empowers farmers to invest in their businesses and find markets

Fairtrade works with producers across the developing world to help them organize and invest in their communities: Here are six ways:

  1. To participate in Fairtrade, farmers must organize themselves into an association. Almost all choose to become co-ops. For small-scale farmers and workers, this gives them market power they could never hope to command on their own. Better ability to negotiate in international commodity markets helps break intergenerational poverty cycles that drive children or workers toward exploitative situations and contribute to environmental degradation.

  2. Fairtrade Standards allow producers and farmers to benchmark their own path toward a more sustainable economy, as well as social and environmental development. Each organization designs its own development plan, which must be approved by the members of the co-op. The Standards also set the basis for individual empowerment because all members have a voice and vote in the organizational decision-making process, including how the Fairtrade Premium is spent.

  3. The Fairtrade Premium is an extra sum on top of the selling price that farmers and workers invest in projects of their choice. The Premium—globally worth more than $108 million a year—is about more than money. The decision-making process helps foster participation, cooperation and dialogue. The farmer members are the ones who know what's most needed in their communities. They're the ones who have to live with the consequences of unfair trade and who will benefit most from a more equitable global system.

  4. Regular audits mean that Fairtrade doesn’t depend on faith. Auditors inspect Fairtrade producers and supply chains regularly. If any violation is found, Fairtrade suspends or decertifies the producer organization until protective and corrective measures are put in place to prevent the recurrence of the violation.

  5. Fairtrade empowers businesses to ensure their supply chains reflect the businesses' mission and values. For example, founded in 1998, Divine Chocolate is the only Fairtrade chocolate company that is also co-owned by cocoa farmers. Kuapa Kokoo, a cooperative of over 85,000 cocoa farmers in Ghana, receives the largest share (44 percent) of Divine’s distributable profits. This gives the farmers more economic stability, as well as greater influence in the cocoa industry itself. Fairtrade supports Divine’s mission to grow a successful global farmer-owned chocolate company using the amazing power of chocolate to delight and engage, while also bringing people together to create dignified trading relations, thereby empowering producers and consumers.

  6. Through the Fairtrade label, consumers have the power to hold business accountable. The label means that all the ingredients in a particular product that can be Fairtrade are Fairtrade Certified. For consumers, this provides a clear, direct link to the international Fairtrade system, since products bearing the Mark have met the social, economic and environmental criteria for ethical supply chains.

How to celebrate Fairtrade Month and Co-op Month this October: 

—Margot Conover, the External Relations Manager at Fairtrade America, works to empower consumers to make supply chains fair and safe for farmers and workers in the Global South. She represents Fairtrade America at the Child Labor Coalition. Margot has worked in sustainable development since 2010, including two years in Ecuador working with fair trade and organic sugarcane, cocoa and coffee cooperatives.