Fair Trade Labeling May Confuse Coffee Drinkers The fair trade movement, which pays premiums to farmers in developing countries for meeting social and environmental standards, is growing quickly and contentiously. The nation's largest fair trade certifying agency has split from its international partner, hoping to expand the program to plantation-grown coffee. Some coffee sellers say the agency is just lowering standards to benefit corporate coffee companies.

Fair Trade Labeling May Confuse Coffee Drinkers

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For people buying coffee that's labeled fair trade, the thought is that they're supporting farmers who meet certain social and environmental standards. But coffee sellers now disagree about exactly what fair trade is, and this means consumers are facing more choices in ethically produced coffee beans. Murray Carpenter has more.

MURRAY CARPENTER, BYLINE: At the warehouses of Equal Exchange, in West Bridgewater, Massachusetts, bags of Peruvian coffee are flushed with nitrogen and sealed. Equal Exchange has come a long way since its first product - an embargo-busting Nicaraguan coffee - prompted a standoff with the Reagan administration. The worker-owned cooperative has grown to $40 million in annual sales of fair trade products.

RINK DICKINSON: Fair trade is the idea that the small farmer gets a direct connection to the U.S. consumer or the European consumer.

CARPENTER: Rink Dickinson is one of the founders of Equal Exchange.

DICKINSON: The consumer knows their dollar is going to the small guy who needs a chance, he needs better access. And it's a way that people in their everyday lives can support farmers directly and make the world better.

CARPENTER: But Dickinson's small-farmer definition of fair trade is not accepted by everyone. Fair Trade USA is the country's largest fair trade certifier. The nonprofit recently decided to allow some coffee grown on large estates to earn the label. Dickinson says it's gone too far.

DICKINSON: That's no longer fair trade. That's another form of socially responsible business. Which is great. People should do that. It just has nothing to do with fair trade.

PAUL RICE: I'm kind of amazed that there are those in the fair trade movement that are so rigid and fanatical in their interpretation of what is fair trade and what is not allowed to be called fair trade.

CARPENTER: Paul Rice is president of Fair Trade USA, which he founded in 1998. [POST-BROADCAST CORRECTION: Fair Trade USA, first known as TransFair USA, was founded by the Institute for Agriculture and Trade Policy. Rice was the organization's first staff member, and he remains president and CEO.] He's seen the movement grow dramatically, supported by sales from companies like Green Mountain Coffee Roasters and Starbucks. This year it will certify 130 million pounds, nearly 5 percent of the U.S. coffee market. But Rice says fair trade is reaching the limits of growth, and allowing more farms to participate will expand the program's reach.

RICE: If farmers and farm workers are demanding help, and looking to fair trade for help, if the industry is saying, we want to do more, let us do more, why would you want to keep it small?

CARPENTER: MIT Researcher Gustavo Setrini says the dispute reflects two views of fair trade.

GUSTAVO SETRINI: One, is fair trade as a supply chain management tool. The second is fair trade as a set of relationships.

CARPENTER: Setrini says the different views lead to different approaches to coffee grown on large farms, or plantations.

SETRINI: So if your goal for fair trade is primarily to improve conditions by some margin, you know, fair trade could work with plantations. But if your goal is to set in motion a more dynamic and democratic process of development at the local level in producing countries, there isn't much historical evidence to say that that can happen on plantations.

CARPENTER: Dickinson, of Equal Exchange, says coffee buyers have more choices today.

DICKINSON: I think this is very confusing to consumers. And I think consumers figure out however they can how to do something good. And they're going to need to continue to get smarter and smarter about how to do that, and who do they really trust.

CARPENTER: The feud is far from over. Rice says Fair Trade USA recently registered a new logo and is planning to take its vision of fair trade worldwide.

For NPR News, I'm Murray Carpenter.

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