Can fair trade goods get a fair shake as U.S. resigns pact?

It's a safe assumption that no one in the coffee line-up at Vancouver's Simon Fraser University (SFU) has ever met a Peruvian coffee farmer. But earlier this month the worlds of these students and small-scale coffee producers just got a little bit closer.

SFU became Canada's second university to earn fair trade designation, meaning food service providers on campus, like Chartwells, sell and visibly promote fair trade coffee, teas and chocolate.

For Mark McLaughlin, executive director of SFU's ancillary services, it's not just about coffee with a conscience. It's about adopting policies that promote sustainability and ethical choices throughout the university administration.

"We've completely changed our procurement policies for down the line. We want it to be part of our DNA," say Mr. McLaughlin.

Fair trade was originally proposed as an alternative economic model for those marginalized by the existing model to promote fair product pricing, better trade conditions and sustainability in developing countries.

In 2011, Canadian sales of products through the Fairtrade Canada system reached around $300-million, with coffee alone seeing sales of more than 6.1 million kilograms, a 4-per-cent increase in annual growth, according to the organization. But despite large institutions like SFU adopting these changes, weak consumer demand is still the key limitation to the fair trade movement.

And the recent decision by Fair Trade USA (FTUSA) to resign from Fairtrade International (FLO) has some fair-trade advocates worried that this might have delivered a serious blow.

Santiago Paz Lopez represents about 7,000 small producers of mostly coffee, cocoa and sugar in northern Peru as the co-manager of the co-operative organization, CEPICAFE.

"To be honest, we are really worried that the fair trade movement is about to destruct," says Mr. Paz Lopez, in translation.

The main point of contention between FTUSA and FLO was whether to include hired-labour plantations into the international fair trade system, which currently focuses on co-operatives made up of small farmers.

Members of FLO decided against the inclusion, reasoning that including larger plantations would flood the supply market, which spawned the American arm's departure.

The real casualties of the FTUSA decision, according to Mr. Paz Lopez, would be the small-scale farmers who already struggle to sell all of their wares as fair trade due to waning demand.

In 2003, Peru had 12 coffee co-operatives that included 80,000 families and produced $60-million (U.S.) of product. Last year, fair trade coffee production totalled $1.5-billion, with the number of co-ops increasing to 80. "Fair trade was founded on the premise of supporting small producers and so the shift to include plantations will leave behind the very people the system was founded to support," says Mr. Paz Lopez.

Canadian fair trade organizations like Fairtrade Canada and the Canadian Fair Trade Network say they have no intention of following the actions of their largest trading partner. Unlike FTUSA, Fairtrade Canada says there's lots of room for innovation within FLO and that branching off into a separate unit is not the answer.

"What we really need to be focused on is increasing that demand and awareness," says Michael Zelmer, director of communications at Fairtrade Canada.

Campaigns like "Fair Trade Towns" - which appoints Canadian towns and cities as fair trade based on six criteria - and the newly launched "Take a Step" program are designed to show Canadian consumers that being fair trade is not a huge undertaking and to demonstrate the business rewards for retailers, says Mr. Zelmer.

May 1 marked the launch of the national "Take A Step" campaign, which aims to register 150,000 individual Fair Trade "steps" in Canada throughout 2012.