Fair Trade USA Campaigns to Make a $25 Million Investment for a $1 Billion Impact

(3BL Media and Just Means) - As you reflect on the year 2014 and begin thinking about 2015, don’t forget that your new, five-year goals are inclusive of the year 2020. What kind of impact do you hope to make by then? How about giving $1 billion to farmers, farm workers, factory workers, and fishermen in over 70 countries around the world? That’s the 2020 goal of Fair Trade USA. Since 1998 and the history of the Fair Trade USA label, Fair Trade USA claims to have helped farmers earn an additional $350,000,000, a combination of premiums and price above the market rates. Today, they are campaigning to raise $25 million, the investment they believe it will take in order to reach their $1 billion goal. And it’s a good possibility it might not take them five years. Bob Stiller, longtime Fair Trade USA supporter and Founder of Green Mountain Coffee Roasters, recently gave them a personal, $10 million matching grant. Other big foundation names like Skoll, Rockefeller, Kellogg and Packard are considering investment, as well.

But where and how exactly will the $25 million be invested? How will Fair Trade USA measure the impact of the grants? More importantly, how will the producers benefit?  In a conversation with Fair Trade USA’s CEO, Paul Rice, I learned more about where the funds will be allocated, and how the hardworking people fair trade seeks to benefit will see their livelihoods and communities changed.

“When we looked at the opportunities around fair trade, expanding into more countries and impacting more workers, we knew we needed a number of key investments in order to unlock that growth,” says Rice. “Our primary indicator of impact is dollars we generate above market price which flows back to workers.”

Fair Trade USA has identified four areas of development for the $25 million dollar grant, each with estimated dollar allocations: $8 million to expand the entrepreneurial capacities of farmers and farmworkers; $8 million in launching an impact management and reporting system; $7 million for marketing and consumer engagement; and the last $6 million to work with retailers to procure and promote fair trade products. Rice says they do not have specific amounts of money earmarked for different types of producers, cooperatives versus farmworkers, for example, because they will invest depending on the demands of the market.

“The way we think about the farmer capacity opportunity is looking at where the industry is going in terms of strengthening supply chains and what it needs to make that happen. This will vary from one company to the next. Green Mountain Coffee Roasters, for example, only buys Fair Trade coffee from co-ops. They don’t buy from estates. If you ask Green Mountain which producer sector to invest in, they will say the co-ops, of course. Different customers have different needs, so I can’t tell you exactly how it will be deployed. We won’t take a mechanical approach,” explains Rice.

And different funders have different expectations for their investments, too. Fair Trade USA is approaching many of the foundations and funders they’ve worked with previously. Many of these “investors”—as Rice calls them—are expecting to see a measurable ROI. The Skoll Foundation, a previous investor of Fair Trade USA, would want to see their contribution earmarked towards the development of an impact management and reporting framework. Rice says tracking the details of their work is critical to the promise they make to consumers and to companies when they choose fair trade.

“I can tell you how many dollars flow back to farmers as a result of our work.  But where those farmers spent their money, how many kids we kept in school, how many kids were vaccinated, how many liters of clean drinking water were produced as result of wells from fair trade premiums--that much richer story, the impact of fair trade—is right now only told through anecdotes. It doesn’t embrace the full scope of our work in 70 countries around the world. The SKOLL Foundation is particularly interested in helping develop a much richer and more detailed framework for impact measurement,” says Rice.

As for the $8 million estimated to empower the entrepreneurial capacity of farmers, a lot of that money will be used to ensure farmers have business acumen and a stronger commitment to product quality. This is partially connected to the demands of big retailers like Costco, who have recently begun selling fair trade produce from Mexico. Rice says Fair Trade USA will train farmers and farmworkers how to partner with the big brands and retailers they work with today. Training will include education on food and health safety, democratic organization, farm worker empowerment and production quality. Rice believes that the expansion of fair trade and growth in the movement happens when farmers and farm workers are empowered—and when big problems present big opportunities. 

“When I go to gatherings with producers, businesses and other stakeholders, what people are saying is that fair trade could and should be bigger and better. Few people in the movement are saying, ‘let’s keep things the way they were. Let’s stay small.’ What’s really being discussed is how fair trade can jump forward. Because again, like Rana Plaza, every time a factory burns up and workers get killed or we hear of slavery in the coffee fields of Brazil—in the face of huge problems there is also a huge opportunity. How is fair trade going to meet that?” says Rice.

Of the 1.5 million families with whom Fair Trade USA continues to work, 90 percent of them are part of farming cooperatives. And, as part of their ‘Fair Trade for All” campaign, Fair Trade USA is also committed to expanding the fair trade model more and more into factories, plantations and even fisheries. In fact, after being approached by large foundations and retailers to address the problem of slavery in the fishing industry, Fair Trade USA spent two years in research with the Marine Stewardship Council and World Wildlife Foundation to develop Fair Trade fish standards. And just this year, they certified the first Fair Trade fishery, a tuna cooperative in Indonesia.

“Fair Trade fish. That’s Fair Trade for all!” proclaims Rice. “When we think about an investment fund of $25 million that will unlock growth, it’s in large part a response to the consumers’ growing hunger for responsible products. Consumers don’t want to eat slave-made sushi,” says Rice.

Fair Trade USA is also partnering with large companies like Nespresso, West Elm and Patagonia. Rice says Fair Trade is rapidly moving from farm to factory and that their growth campaign is in response to seizing the consumers’ demands for more responsible products.

Stay tuned as I follow-up on this campaign and explore Fair Trade USA’s tangible impact.

Read about Fair Trade Fish. Learn about the $25 Million Campaign. Check out Fair Trade for All.