Fair Trade in the Philippines

Michelle Plouse November 16, 2017

The Fair Trade movement is fairly small in the Philippines but has been growing in recent years. It is comprised of a mix of small cooperatives and multinational corporations. For the vast majority of Filipino farmers, any Fair Trade certification is far too expensive to be a realistic option. Generally, the small co-ops are certified by Fair Trade and the large corporations by Fair Trade USA. The two organizations split over a differing view of multinational corporations’ role in Fair Trade. Fair Trade USA has changed certain strategies and standards in an attempt to bring larger companies into the Fair Trade market.[1] Many, including the World Fair Trade Organization fear that the presence of multinationals in the Fair Trade market makes it difficult for co-ops and small farmers to compete in the Fair Trade market.[2] For the very poorest farmers, it would be nonsensical to pay high certification fees to enter a competition with multinational corporations...

There is also evidence that many of the workers in Fair Trade companies don’t see improvements in their lives. According to a 2014 Harvard study, only skilled laborers and owners benefit from Fair Trade. Unskilled workers, who make up the vast majority of Fair Trade laborers and are the most impoverished, do not see any improvement.[3] Even for small farm owners Fair Trade can be problematic. A study in Nicaragua found that over a decade, Fair Trade farmers ended up poorer than their uncertified counterparts.[4] The Fair Trade system, especially with it’s recent spike in multinational members is doing little to help the members of Filipinosociety who are most in need.

On the one hand, certifications in general and Fair Trade specifically are not inherently negative. There is plenty to admire in the concept and many people have undoubtedly benefitted. For instance, there is evidence that certified co-ops can be helpful for increasing land ownership and economic freedom among the poor.[5] However, there are serious challenges inherent in certification programs and in many cases they can be ineffective or even harmful for certain groups. The multinationals filing into the Filipino Fair Trade market represent a serious concern for the most vulnerable Filipinos all while using a label that appears to protect the most downtrodden.

[1] Modelo, M. (2014) The Paradox of Fair Trade. Stanford Social Innovation Review. Retrieved from[2] WTFO. (2011). WFTO Response to Fair Trade USA-FLO Split. Retrieved from[3] Dragusanu, R. & Nunn, N. (2014) The Impacts of Fair Trade Certification: Evidence From Coffee Producers in Costa Rica. Working Paper. Retrieved from[4] Beuchelt, T. D. & Zeller, M. (2011). Profits and Poverty: Certification’s troubled linkfor Nicaragua’s organic and fairtrade coffee producers. Ecological Economics 70, 1316-1324.[5] Makita, R. & Tsuruta, T. (2017) Fair Trade and Organic Initiatives in Asian Agriculture: The Hidden Realities. London and New York: Routledge. 113-115.