Governance, Certification & International Trade Justice: Which Way Now?

As discussed by Ian Agnew of the Lorna Young Foundation, the certification of coffee has become increasingly prominent in the last 10 years. However, the wide spread use and variety of these certification systems raise some important and often difficult questions: Are these schemes producing the effects that they claim? How can consumer, producers and others make sense of the options available?  Which certification option should I be choosing? In the first of a three part article, Dr. Alastair M. Smith shares some of his thoughts on this ‘age of certification’.

Background to the ‘Age of Certification’

International trade has always produced better outcomes for some people over others. However, as society has moved beyond the idea that people get what they deserve, this situation has increasingly come to be thought of as ‘unfair’; given that people often have very little control of how their involvement in trade affects others.

For example, if a farmer does not have access to resources such as the stable and appropriate climate that is necessary for growing commodities such as coffee, it leaves him at a disadvantage to trade successfully. However, another factor is that coffee companies such as the four who currently trade almost all of the world’s coffee supply, have shaped the system for their own benefit. This system negatively affects the least powerful and even creates a situation where the price and accessibility of your cup of morning coffee comes at the price of hardship for farmers.

Whatever you think about the liberalisation of international trade (the process whereby a country opens up its markets to trade i.e. by reducing taxes and other limits on goods entering the country), it is a fact that in the above context, existing opportunities for farmers have become more unequal. World market prices for coffee have been hugely unstable (making it very difficult for those with low levels of ability to plan for the future) and in many sectors, prices have decreased significantly at a time when inflation has increased the basic costs of production.

While some argue that these pressures are positive as they mean resources are allocated more efficiently, there is no question that this also leads to desperate hardship for hundreds of thousands of coffee producers, workers and their families. Although some have moved from their traditional livelihoods into other sectors, in many cases this has offered little hope of a better and more stable life. For those forced to stay in coffee farming, life is still a daily struggle for survival due to their lack of ability to change the situation.

This is not to say that there have not been many efforts to improve the lives of coffee farmers across the world. One initiative has been the development of systems of organisation or ‘governance’, which aim to make involvement in international supply chains more beneficial for those most in need. Although some of these approaches are hard to see since they are often internal to the organisations involved in production and trade, others are promoted as part of a marketing identity – and in particular to appeal to a growing number of trade partners and consumers who are concerned about these issues.

The idea of certification is nothing new. For example, the ‘Buy Empire Goods’ movement in Britain during the 1920s encouraged society to promote the interests of farmers producing lamb, honey and sultanas in Australia and New Zealand, as well as native producers of copper wares, hand-work and trinkets. For this reason, the current ‘age of certification’ is not something new, but is perhaps unrivalled in its scope and depth. The modern market is weighed down by a huge variety of governance and certification systems and we have to look to the end of the Second World War to see where it most recently began.

Check back soon for part two of the article where Dr. Alastair M. Smith discusses ‘fair trade’ and ‘ethical trade’ governance and certification.

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