What is equitrade and how does it differ from fair trade?

If you've been shopping the chocolate aisle lately, you might have noticed Malagasy's equitrade-designated chocolate bars. But what is equitrade and how does it differ from fair trade? Fair trade provides a fair wage to farmers for cash crops. Meanwhile, equitrade attempts to take this one crucial step forward, and empower local people to turn their crops into finished goods. Why is this crucial? Because as Paul Roberts explains in The End of Food, cash crops earn a relatively low amount of money. The "value adding" comes when the food is processed. Consequently, a breakfast cereal has a much higher value than oats, and chocolate has a much higher value than cacao beans. Furthermore, while cacao beans garner a standard, across the board market rate, chocolate bars can vary in price depending on a number of factors.

Generally speaking, even with fair trade products, the cash crop comes from the developing world, but the all important "value adding" happens in the developed world. So your cacao beans might be picked in Madagascar, but imported to Switzerland for processing. The problem is, as long as the "value adding" process continues to be done in the developed world, the developing world will never see much of the immense profits garnered from chocolate. Simply put, fair trade, while important, is just not enough.

So far, Malagasy seems to be the only company using the equitrade symbol. (And in fact, the founders of Malagasy also founded equitrade.) And equitrade isn't likely to become widespread in the future. Because fair trade involves cash crops, it can fit nicely into our current agricultural economy. Nestle can buy fair trade coffee beans, and still be Nestle. But since equitrade demands processing to happen in the countries where the crops are harvested, Nestle can't just "become" equitrade. As a result, equitrade is likely to remain a very, very tiny, niche market. Still, if equitrade is able to make any advances in the niche, "foodie" market, this might have a very real impact on the economies of the developing world. Let's hope they're successful.