“Fair” Trade: Thirty-Seven Years On | #PSC 221
OVERVIEW: In the run up to the 25th anniversary of the signing of Harkin-Engel, Episode 221 of #PodSaveChocolate casts a critical eye on Fairtrade in cocoa, 37 years after the launch of the first FT-certified brand (Max Havelaar, coffee). [updated prior to going live]
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Episode 221
Max Havelaar launched the first fair trade certification mark (for coffee), on November 15, 1988, in the Netherlands.
There is a second anniversary sitting right on top of that one. September 19, 2026 marks 25 years since the Harkin-Engel Protocol, the voluntary industry pledge to eliminate the worst forms of child labor in cocoa within four years, was signed.
Celebrating(?) the 25th anniversary of the signing (on Sept 19, 2001) of the Harkin-Engel Protocol with confirmed special guest Terry Collingsworth, International Rights Advocates.
The two anniversaries are not the same story, but they rhyme: both are industry-scale promises, made under public pressure, that ask to be graded on their own stated terms rather than on vibes.
Both are tests of whether voluntary, market-based accountability mechanisms actually hold up over a decades-long timeline; long enough that the people who designed it, the people who sell it, and the people who were supposed to benefit from it all have a falsifiable track record, not just a mission statement.
And the Question is …?
Perhaps surprisingly to many who follow me, the question isn’t “is fair trade good or bad.” That question is unfalsifiable and everyone already has their own answers to it.
A better question is, “Using Fairtrade’s own published data, its own income studies, and its own price mechanisms, have the certification premiums moved the needle on farmer livelihoods enough to justify what farmers and cooperatives pay to stay certified?”
That is an internal critique, not external condemnation. In other words, take Fairtrade’s numbers seriously and see where they break down on their own terms.
There are two main threads I want to consider in this episode:
- The premium has real, documented effects, but they are smaller than the marketing implies.
Fairtrade’s own 2021 household income study in Côte d’Ivoire found that if farmers captured the Fairtrade Minimum Price across all the cocoa they sold, average household income would rise by roughly nine percent, with about a quarter of farmers projected to clear a living income and another half getting close.
That is a real number. But, it is also a conditional one: “if farmers captured the Fairtrade Minimum Price on all volumes,” which is not what happens in practice, since certified cooperatives typically sell only a portion of their crop on Fairtrade terms. - The compliance cost is not evenly distributed, and it is rising.
A 2023 ConfectioneryNews special report cites a Colombian cooperative exec who gives the following breakdown: General certification can cost 10–15% of budget; deforestation/EUDR compliance specifically, if the coop already has polygon and farmer data consumes an additional 5–10% of budget. [updated for clarity after a post-publication fact check run].
Fairtrade International’s own oversupply admission is worth sitting with too: the organization has acknowledged a large oversupply of Fairtrade-certified cocoa against declining buyer demand, following the 2019 [keep that date in mind] increase in the minimum price and premium. That means that a meaningful share of certified farmers are doing the compliance work and not getting the premium at all, because there is no buyer for it on Fairtrade terms.
Fairtrade does argue (in the CocoaRadar article in the Sources, below), that 2022-24’s supply crunch, not certification fatigue, is what suppressed FT-terms sales. Their own spokesperson makes exactly that point: conventional demand outpaced conventional supply, pulling buyers away from FT terms. However, we can apply Hitchens’ Razor to the causal relationship – the burden’s on Fairtrade to prove that claim – and it hasn’t been met. Move on, there’s nothing to see here, yet.
Layer in the pricing context that makes 2026 a strange moment to ask this question: cocoa went from roughly $2,500 a tonne in early 2023 to nearly $12,000 at the April 2024 peak, then crashed back toward $6,000 and below. Fairtrade’s minimum price, the entire safety-net premise of the system, was irrelevant for most of that window because market price blew past it. Fairtrade raised its conventional minimum by 45 percent to $3,500 a tonne effective October 2026, a number that would have been meaningless during the 2024 spike and may or may not matter depending on where the market sits in October.
Note: The spot (cash) price for cocoa on ICE/US closed at over $5200/MT on Thursday, July 30th,
Questions to Take a Deeper Dive By
- When Fairtrade cites a nine percent income increase, is that the number farmers are actually seeing, or the number they would see under a best-case volume assumption that does not always hold?
- Who absorbs the cost of staying certified when a cooperative cannot sell all of its beans on Fairtrade terms? Is it built into the premium math, or is it a sunk cost for cooperatives?
- Has certification, thirty-plus years on, changed the structural position of a cocoa farmer relative to a trader or processor, or has it created a parallel compliance economy that primarily benefits the better-resourced cooperatives that can absorb the paperwork?
- Fairtrade is only one certification among several (Rainforest Alliance, organic, UTZ before the RA merger). Does stacking certifications multiply the compliance burden without multiplying the benefit?
- Twenty-five years after Harkin-Engel and thirty-seven after Max Havelaar, what does it say that both a voluntary industry pledge and a market-based certification premium are still being defended on the promise of future results rather than delivered ones?
- Has Fairtrade ever published a study that failed to show improvement? Or published a review questioning whether the research pipeline itself is structured to only measure success scenarios (best-case volume capture, best-case FMP (Fairtrade Minimum Price) ]distribution)?
Note: IISD’s cocoa-specific reporting hasn‘t been updated since that 2022 report. Anything more recent is coming from Fairtrade‘s own numbers or other sources, not IISD. So, it’s fair to describe IISD as the source for the mechanism (2019 price hike → oversupply → sell-through gap), not for the any current sell-through figure, which relies on Fairtrade’s published reporting.
Factoring in the LID and LIRP
Price floors without supply management make Fairtrade’s problems worse. That's not a criticism of Fairtrade in isolation: it’s an observation that criticizes the whole “raise the price” strategy across every mechanism (LID, FMP, LIRP) simultaneously.
None of the three address demand.
That’s a sharper framing of my “internal critique, not external condemnation” position stated earlier, because it shows the dysfunction isn’t a Fairtrade-specific design flaw, it’s what happens whenever you regulate price without regulating volume.
Which is a major reason Fairtrade’s (and similar sustainability programs’) governance structures set them up to fail.
Sources
- Stichting Max Havelaar — Wikipedia — founding date and origin of the first fair trade label, launched November 15, 1988.
- A Brief History of Fair Trade — Fair Trade Federation — broader movement timeline and context.
- New study shows higher incomes for Fairtrade cocoa farmers — Fairtrade International — Fairtrade's own framing of the income study results.
- 2021 Fairtrade/CDI Cocoa Household Income Study (PDF) — primary source for the nine percent income increase and living-income projection figures.
- Fairtrade to review cocoa premium against farmer income study — ConfectioneryNews (2016) — earlier data point: roughly $36/year in additional premium income per member in 2013/14, useful for showing the trend line over time.
- Effects of Fairtrade on farm household food security and living standards: insights from Côte d'Ivoire — ScienceDirect — peer-reviewed look at outcomes beyond raw income.
- The cost for farmers of complying with cocoa sustainability certifications — ConfectioneryNews special report (Dec 2023) — core source for the compliance-cost side of the report card, including the FUNDOPO case study.
- Exclusive: What's behind the drop in demand for Fairtrade-certified cocoa — Cocoa Radar — oversupply and declining buyer demand following the 2019 minimum price increase.
- Fair trade cocoa — Wikipedia — structural overview and criticism summary, useful for pre-interview homework.
- The High Cost Of Certification — TheChocolateLife Forums — prior internal thread on this exact question, worth revisiting and citing directly on air.
- Chocolate Scorecard marks down companies over farmer income and pesticide use — ConfectioneryNews (March 2024) — comparison point for a competing accountability framework.
- Harkin-Engel Protocol — ICI Cocoa Initiative — protocol text and structure.
- Harkin–Engel Protocol — Wikipedia — signing date (September 19, 2001) and timeline of missed deadlines.
- NORC final report released: finds over 1m cases of child labour in West Africa's cocoa sector — ConfectioneryNews (Oct 2020) — the 1.56 million figure (790,000 Côte d'Ivoire, 770,000 Ghana), for the Harkin-Engel framing at the top of the episode.
- Assessing Child Labor in West Africa Cocoa Farming — NORC at the University of Chicago — primary research source and methodology.
- Unprecedented Chocolate Prices Reveal a Vulnerable Supply Chain — Equal Exchange — cocoa price context, 2023 to 2024 spike.
- New Fairtrade Minimum Price for cocoa in non-regulated markets — Fairtrade International — 45 percent minimum price increase to $3,500/MT, effective October 2026.
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