Looking Behind the 'Fairtrade' Label

This is the VOA Special English AGRICULTURE REPORT.

Coffee drinkers are not the only ones willing to pay more for products marked with the words "Fairtrade" or "Fair Trade Certified." Fair-trade teas, bananas, nuts and other products are also available. Some people see it as an act of social responsibility to buy these products.

The movement began in Europe in the nineteen eighties. Activists wanted a way to guarantee fair prices for small coffee producers in poor countries.

A group called the Fairtrade Labelling Organizations International, or FLO, was established in nineteen ninety-seven. Its responsibilities include setting prices as well as rules for working conditions and wages.

Under fair trade rules, importers must give growers technical help and let growers borrow money from them.

Until nineteen eighty-nine, an international agreement helped keep coffee prices level by governing the world supply. But then a free market agreement ended that. The supply of coffee grew higher than demand. Prices were low. Now, coffee prices are rising on the world market.

The European Parliament recognized the work of the Fairtrade movement with a resolution last year. But there were also calls to establish policies to protect the movement itself from abuses. These include growers failing to pay the required wages to their workers.

Some economists criticize Fairtrade plans in general. They say the guaranteed prices are often higher than market prices. As a result, growers produce more, and too much supply can hurt growers who are not included in the plans.

Coffee is the second most traded product on world markets after oil. And some of the finest coffees come from Ethiopia.

Now, Ethiopia wants to control the use of its specialty coffee names under trademark laws. The idea is to charge coffee sellers for the right to use those names.

The world's best known coffee seller, however, resisted the idea. But last week, after two days of talks, Ethiopia's Intellectual Property Office and the Starbucks Coffee Company released a joint statement. They said they look forward to signing an agreement this month.

Details are not yet final. But they say the agreement will recognize the importance of Ethiopia's specialty coffee names. After all, Starbucks Chairman Howard Schultz noted that Ethiopia is recognized as the historic birthplace of coffee.

And that's the VOA Special English AGRICULTURE REPORT, written by Jerilyn Watson. I'm Steve Ember.