Module 2: Organic and Fair Trade Certified

Overview

In the United States, organic foods are managed in accordance with the Organic Foods Production Act (OFPA) of 1990. The OFPA authorized the United States Department of Agriculture (USDA) to administer the National Organic Program (NOP), an organization that sets national standards for the production, handling, and processing of organic products.(1) The USDA certifies organic foods only if they are produced through approved methods, which “integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used.”(2) In addition, organic meat and poultry cannot contain any antibiotics. Essentially, foods in the United States are only certified as “organic” if they are produced without any synthetic inputs.

The use of organic farming methods has increased rapidly, particularly in Western Europe, Latin America, and the United States. As of 2011, the land area being farmed organically had grown to 37.2 million hectares, although organic products still comprise a small percentage of global agricultural output compared to conventional agricultural produce. While 90 percent of the organic market is in Europe and North America, it has been expanding in other parts of the world and the FAO estimates that demand for organic products grew between 15 and 20 percent per year between 1999 and 2009.(3)

In 2001, the International Fair Trade movement defined fair trade as “a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the South. Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”(4) In other words, fair trade aims to improve the quality of life of the producers by paying them a fair price or fair wage for their goods and services and by providing other means of support for producers.

Fair trade organizations, commonly referred to as alternative trading organizations (ATOs), distribute or import products that comply with fair trade specifications. In the case of coffee, producers sell coffee beans to a primary cooperative, which then sells to secondary and tertiary cooperatives that subsequently exports the products. At each step of the process, producers and cooperatives must meet standards set by Fairtrade International (FLO), a non-profit organization that directs the fair trade movement and promotes the Fairtrade Certification Mark. In addition to meeting certification requirements, producers and cooperatives must pay the FLO a fee for certification. The importer also agrees to pay more for the product; for instance importers pay a set minimum price of coffee even when the world price of coffee collapses, and will pay a higher price for coffee that sells as Fairtrade Certified. This higher price is known as the fairtrade premium and goes to exporters, who pool the money into a communal fund to improve their local conditions.(5)

Fair trade differs, however, from free trade. While fair trade buyers pay a higher price for fairtrade-certified products, free trade lets markets act without interference. Under the free trade system, governments and organizations do not impose tariffs, subsidies, or price controls in the international market. Proponents of free trade believe that this system “levels the playing field.” However, supporters of fair trade believe that free trade harms producers in developing nations, because they are more vulnerable to price fluctuations than are producers in wealthier nations.

USDA Organic Food Label

Fairtrade International Certification Label

What “Organic” and “Fair Trade” Mean for Producers

Under a fair trade system, producers collaborate with retailers and wholesalers. Producers consequently receive fair wages, gain respect, and are viewed as people, rather than assets. Furthermore, producers are educated about international markets, enabling them to make products that align with consumer tastes. Eventually, producers sustain their own partner/customer relationships. Through this process, producers gain a stronger foothold in the international market. Producers might also receive developmental aid from buyers, in the form of microloans or access to health insurance, among other benefits.

A study examined the financial impact on members of nine cooperatives selling in the fair trade market through Coocafé, a coffee cooperative in Brazil. The study concluded that certified cooperatives received a stable (and often higher) price for every ton of coffee.(6) These cooperatives also benefited from projects funded by the Social Capital Fund, which receives funding from fair trade premiums. The nine cooperatives also produced and sold finished products to the market, and directed proceeds toward scholarship programs for secondary schools.(7)

In contrast, other studies have found that producers selling certified organic or fair trade foods may not receive more financial benefits than do conventional producers. One survey of agricultural cooperatives in Nicaragua found that although prices of organic and fair-trade certified coffee were greater than those of conventional coffee, a smaller amount of certified coffee was produced. The decreased yield in certified coffee accounted for the decreased revenue for the organic and fair-trade product, compared to conventionally grown coffee or organic (but not fair-trade certified) coffee.(8) Therefore, the study concluded that certified producers often make a smaller profit than do their conventional counterparts.

What “Organic” and “Fair Trade” Mean for Consumers

There is continued controversy surrounding the health and nutritional benefits of organic food. Some studies claim that research has not shown any differences in nutritional content between organic foods and conventionally grown foods.(9)(10) As for the health effects of organic versus conventional foods, a systematic review of published literature presented in The American Journal of Clinical Nutrition concluded, “evidence is lacking for nutrition-related health effects that result from the consumption of organically produced foodstuffs.”(11)

There are health concerns associated with conventionally produced foods, and proponents of organic food claim that there are dangers inherent in conventional foods. For example, USDA-certified organic produce carries significantly fewer pesticides than does conventional produce. Organic foods also contain very limited amounts of food additives, synthetic hormones, and antibiotics.

There are also concerns about how livestock is raised, as substances in meat may be associated with negative health outcomes in the humans who consume it. For example, several studies suggest that grass-fed beef may contain more nutrients and less fat than grain-fed beef.(12) Furthermore, studies have shown that there was less risk of acquiring a disease from eating organic meat. In the USDA-funded Alal study (2010), only 6% of fecal samples from organic poultry contained salmonella, compared to 39% of fecal samples from conventional farms. Only 5% of organic feed samples were contaminated with salmonella, compared to 28% of conventional feed samples.(13) In addition, the heavy use of antibiotics on conventionally grown livestock contributed to the emergence of drug resistant organisms. In fact, a study by the Center for a Livable Future shows that 80% of all antibiotics sold in 2009 went towards agricultural uses, and only 20% were used for humans.(14) Finally, the residue of artificial hormones, used to promote growth in cattle and sheep, may increase the risk of cancer in humans and increase susceptibility to infection in animals. Studies report increased levels of insulin-like growth factor-1 (IGF-1) in milk from cows treated with artificial hormones, and IGF-1 increases the risk of breast, prostate, and colorectal cancer.(15)(16)

Some researchers believe that the use of organic farming techniques may help alleviate world hunger. This is another controversial issue, as some studies have shown that organic agriculture decreases crop yields, while others demonstrate the opposite. For example, in the study of  coffee bean production noted earlier, farmers who produced certified fair trade and organic coffee beans produced less coffee than conventional coffee growers. Likewise, a systematic review comparing organic and conventional crop yields found that on average, organic crop yields are 20% lower than conventional crop yields, though there was a high standard deviation (20%).(17) The authors of this study attributed the difference in yield to the difficulty of maintaining nutrients in organic systems, as nutrient availability requires careful management of pests and diseases, which typically requires conventional techniques.(18)

Other sources have reported contrary findings. According to the UN Environmental Program (UNEP), organic foods may be the only solution to global hunger. In developing countries, yields from organic agriculture were the same as those from industrial agriculture.(19) Producers, often small-scale farmers, gained greater food security because the quantity of food produced per farm increased in organic farms. Compiling all of this information, it seems that organic agriculture may increase yield primarily in developing nations, where conventional agriculture does not rely on many synthetic inputs.(20)

Footnotes

(1) USDA. "Organic Production/Organic Food: Information Access Tools." https://www.nal.usda.gov/afsic/organic-productionorganic-food-information-access-tools.

(2) USDA Agricultural Marketing Service. "National Organic Program."  https://www.ams.usda.gov/about-ams/programs-offices/national-organic-program.

(3) FAO. “Organic Farming.” FAO Statistical Yearbook 2014. http://www.fao.org/3/a-i3590e.pdf.

(4) European Fair Trade Association. EFTA: Joining Fair Trade Forces. Netherlands: European Fair Trade Association, 2006. Print.

(5) Fairtrade International. "What Is Fairtrade?" https://www.fairtrade.net/about-fairtrade/what-is-fairtrade.html.

(6) Ronchi, L. “The Impact of Fair Trade on Producers and Their Organisations: A Case Study with Coocafé in Costa Rica.” (June 2002) Poverty Research Unit. University of Sussex. https://core.ac.uk/download/pdf/6301547.pdf.

(7) Ibid.

(8) Beuchelt, T. & Zeller, M. “Profits and poverty: Certification’s troubled link for Nicaragua’s organic and fair trade coffee producers.”Ecological Economics. 70 (2011) 1316-1324.

(9) Mayo Clinic Staff. "Organic Foods: Are They Safer? More Nutritious?"https://www.mayoclinic.org/healthy-lifestyle/nutrition-and-healthy-eating/in-depth/organic-food/art-20043880. 

(10) Dangour, A. D., Lock, K., Hayter, A., Aikenhead, A., Allen, E., & Uauy, R. (2010). “Nutrition-related health effects of organic foods: a systematic review.” The American Journal of Clinical Nutrition, 92(1), 203-210.

(11) Ibid.

(12) Environmental Working Group. “A Meat Eater’s Guide to Climate Change + Health: What You Eat Matters.”. https://www.ewg.org/meateatersguide/.

(13) Ibid.

(14) Ibid.

(15) Hansen M, Halloran, JM, Groth E III, & Lefferts L. (1997) Potential Public Health Impacts of the Use of Recombinant Bovine Somatotropin in Dairy Production. (Prepared for a Scientific Review by the Joint Expert Committee on Food Additives). Consumers Union. https://consumersunion.org/news/potential-public-health-impacts-of-the-use-of-recombinant-bovine-somatotropin-in-dairy-production-part-1/ .

(16) Yu H, & Rohan T. (2000) “Role of the Insulin-Like Growth Factor Family in Cancer Development and Progression.”Journal of the National Cancer Institute. 92 (18): 1472-1489.

(17) Seufert, V., Ramankutty, N., & Foley, J. (2012) “Comparing the yields of organic and conventional agriculture.” Nature. 485(7397), 229.

(18) Ibid.

(19) United Nations Environmental Programme (UNEP) and United Nations Conference on Trade and Development (UNCTAD), 2008 “Organic Agriculture and Food Security in Africa”’ pages 1-61.

(20) Ibid.