Beyond the Label: Rainforest Alliance and Fairtrade; the same, just different..

With over 100 eco-labelling schemes in the EU alone, accusations of greenwash filling the columns and once simple eco-ethical claims becoming more complicated, the humble – yet enormously powerful – consumer can be forgiven for finding themselves in the health food aisle at the supermarket scratching their heads in a state of ethical angst. Emiliana Silvestri assesses two of the main protagonists.


One example of (so far respectable) conflict exists between the two leading ethical certification bodies, Fairtrade and Rainforest Alliance; which label, as a company, to adopt and which coffee, as a consumer, to drink?


The term fair-trade emerged in the UK in the ‘60s among ‘world shops’ like Tradecraft and Oxfam. The origin and ethical pedigree of goods, often arts and crafts, was labelled fair-trade in an attempt to introduce accountability into a global commercial arena that has traditionally tended to exploit farmers, growers and producers in the developing world. Founded on beautifully simple – and admirably lofty – principles, the movement only really began to make any impact on our shopping habits with the introduction of the international Fairtrade labelling system in the late ‘80s.


This Fairtrade Labelling Organisation certification system (FLO-Cert) allows consumers to identify goods such as fruit, honey, cocoa, coffee, spices, sugar and wine that have been produced to agreed, independently audited labour, environmental and developmental standards, thus guaranteeing a fair price never lower than the market price to farmers. Certification costs the corporate purchaser 2% of the wholesale value which is then ploughed back into community development programs.


FLO International standards apply to both farmers’ organisations and to large operations, such as plantations, reliant on hired labour. Small organisations must establish co-ops, ensuring democratic decision making, another of Fairtrade’s stipulations. Farms with hired labour have to let workers establish unions and set a baseline, premium ‘living wage’, which creates a local legal foundation and allows for growth and future independence. Crucially, farm workers are an integral part in establishing Fairtrade standards.


Although no panacea, benefits locally include better education, improved familial stability, lower child mortality, increased farming sustainability through reduced vulnerability and even conflict prevention through reduced pressure on, and competition for, resources.

By 2008, 746 producer organisations in 58 developing countries were Fairtrade Foundation certified with sales amounting to about £3 billion (US $4.08 billion) worldwide, a 22% year-to-year increase expected to reach £7 billion by 2012.


The Rainforest Alliance, pretender to the ethical commodity crown, is relatively new on the scene, emerging from New York in 1987 with a mission to ‘protect ecosystems and the people and wildlife that depend on them by transforming land-use practices, business practices and consumer behaviour’.


From large multinationals to small, community-based co-operatives, they involve businesses and consumers around the world in an attempt to provide responsibly produced goods and services for an ever-increasing global demand for sustainability.


Structurally, their approach is four- fold; firstly encouraging better land management through their Sustainable Forestry Division and their highly- regarded Smartwood scheme, which verifies the legality of timber sources; their Sustainable Agriculture Division, which provides a series of social and environmental standards to which potential farms must comply in order to receive their much sought after endorsement; thirdly, their Carbon Verification program assesses carbon offset projects ‘to standards that address greenhouse gas sequestration, biodiversity conservation and sustainable livelihoods’; and lastly, their bar-raising Sustainable Tourism program which helps businesses acquire ‘eco-tourism’ certification.


Educational initiatives like their ‘adopt- a-rainforest’ and free online conservation curricula for schools are also popular and effective.


By 2006 they had certified 100 million acres of forested land, certified coffee plantation was doubling every year to around half a million acres, 15% of all bananas were Alliance certified and nearly half a million acres of land on more than 4,500 farms and co- operatives in 12 countries had Rainforest Alliance certification, permitting their products to bear the ‘green frog’ label.


All well and good, but how does this play out on the shelves and in the field? The coffee industry, worth £1bn-a-year in the UK alone, perhaps most eloquently demonstrates the key difference between the two, namely price.

Fairtrade certification means importers agree to guarantee the FLO minimum price (for example US $1.21 per pound for Arabica coffee) and pay a social premium (US $.05 per pound) above this minimum, or pay the world market price, whichever is higher. The premium is paid even if the market price rises above $1.21.


The Rainforest Alliance offers no minimum or guaranteed price but certified farmers can receive an extra 10 to 60 cents above the market price per pound of beans. Take Kraft, who eschewed Fairtrade for Rainforest Alliance, and pays a premium of up to 20% for the coffee beans it uses in its Kenco Sustainable Development brand. With a market price of 80 cents, this works out at about 96 cents per pound – still 21% less than the Fairtrade price.


So Fairtrade coffee ends up more expensive on the shelf, costs more to produce, but benefits the farmer more. Rainforest Alliance coffee is cheaper, but coffee sellers can use the logo even if only 30% of the beans are Rainforest Alliance certified, with no guarantee of where the other 70% might have come from. Also, unlike Fairtrade, the Rainforest Alliance doesn’t provide crop pre-financing, often vital for farmers where lending schemes are unreliable or corrupt.


Criticism of both abounds; cynics point out that the Rainforest Alliance provides a cheaper way for large coffee brands to tap into the ethical market; coffee roasters can sell coffee containing a minimum of 30% certified beans and boost their ethical cred with the frog on the packet.


On the other hand Fairtrade coffee’s success has been blamed for price distortion; flooding the market, dropping the market price and thus reducing the relative benefit of paying a percentage over it, and creating concerns about the impact on long run development and economic growth.

Maybe the criticism is churlish. Both have strong ethical agendas, shouldn’t the issue be not which is better but why other products have no ethical credentials at all?


Rainforest Alliance has mega-corps Unilever (Liptons tea) and Kraft Foods, Italy’s biggest coffee-maker, Lavazza, the 100-year-old Lyons brand and McDonalds signed up for their coffee, and JP Morgan, Citigroup, Johnson & Johnson and Nike use their certified paper. Fairtrade accounts for 4% of all coffee drunk in the UK, and 20% of the premium roast and ground sector. Cafédirect, which sells only Fairtrade drinks, is now the sixth largest coffee brand in the UK.


Surely anything that makes multinationals more accountable and benefits the beleaguered farmers of the world has to be a good thing. As Lavazza’s head of coffee buying, Mario Cerutti, puts it, ‘There are hundreds of approaches to resolving the problems facing coffee farmers, and every one is beautiful.’