Presupuesto

The previous debate clearly demonstrates that maintaining the pre-2008 developmental rates, let alone eradicating global poverty, is proving a more challenging task for civilisation than finding potentially habitable planets 600 light-years away, or sending spacecrafts to Mars and beyond our Solar System. Therefore, it comes as no surprise that, according to Abdelrahman, a number of development programmes, movements, initiatives and campaigns tackle developmental issues today (2010).

Central to their agendas are new political, economic, social and ecological rights and values (Murray and Raynolds 2007 and 2000, Buttel and Gould 2004). They offer "novel ways in which they span North/South and producer/consumer divides" (Raynolds and Wilkinson 2007, p.39), insisting on redefining trade relations between developing and developed countries (Strong 1996) and believing that the trade and not aid should be accented (Annan 2001). Furthermore, according to Fair Trade research doyen, Oxford Professor Alex Nicholls and Charlotte Opal, the chair of the Fairtrade Labelling Organizations International's (Fairtrade International) standards committee, today, their focus is on the global market and not on national authoritarian regimes (2005, p.22-23). Instead of sole concerns about the sustainability of production and its environmental impacts, they now focus on political, economic, social and environmental contexts of the production processes in general and on

the global economy and international trade in particular, in order to make them more ethical and fair (Ibid.).

From this milieu emerged the Fair Trade movement and the Fairtrade system, as its most prominent part (Krier 2005), gaining significant momentum during the last two decades. Academically, they were predominantly analysed by the Fair Trade literature. I will now put forward their "at a glance" presentation, since all of the below-presented topics will be discussed in detail in chapters II and III, in which both the literature review and doctoral thesis' theoretical framework will be presented.

The idea of fair and ethical business and trade is not a new one and there are many scholars who have tackled this issue (for examples, see in: Fontaine 2008, Jackson 2008, Fridell 2003, Alvey 1999, Galbraith 1998, Drakopoulos 1997, Winch 1996, Canterbery 1995, Rothschild 1993, Thompson 1991 and others). However, the earliest start of what is today called Fair Trade, a proto-Fair Trade movement, began with a group of British Quakers who founded Oxfam in 1942 in order to raise funds for wartime relief, primary in Greece in 1941- 1942 (O'Grada 2007, p.18).

The modern form of Fair Trade soon followed in the early post-World War II era when the initial attempts to commercialise Fair Trade goods in the markets of developed countries were undertaken. The pioneers were the Mennonite and Brethren in Christ churches in North America that founded Ten Thousand Villages in 1946, which started the Fair Trade supply chains in developing countries (Lyon 2006, p.454). A few years later, during the 1950s, secular alternative trade organisations and shops emerged in Europe, such as, for example, the UK's Twin Trading, Dutch Fair Trade Organisatie and Oxfam's Worldshops (Ibid.).

With the slogan "Trade not Aid", pro-Fair Trade initiatives gained international recognition in 1968 when the United Nations acknowledged the concept for the first time

(Hockerts 2005). In 1986, Equal Exchange, one of the most famous Fair Trade coffee companies was founded in Canton, Massachusetts (Lyon 2006, p.454) and it was one of the most vocal heralds of major events which happened shortly after.

The history of the Fairtrade system itself began in 1988 with the launch of the Max Havelaar label for coffee coming from Mexico, which was introduced by the Dutch development agencySolidaridad (Fairtrade International 2012a). Three years later, this label was replicated in neighbouring Belgium, a year after in Switzerland and in 1993 in Germany and France (Giovannucci and Koekoek 2003, p.39). The Fairtrade Foundation, which was founded in 1992 by a number of British development organisations, soon followed, and in 1994 it introduced the Green & Black's "Maya Gold" chocolate, the first product carrying the mark which went on sale in the United Kingdom (Lamb 2008, p.60).

However, the history of Fairtrade changed decisively in 1997 when the above-stated Dutch, Belgian, Swiss, German, French, British and eleven other National Fairtrade Organisations (NFO)8 established Fairtrade International9 in Bonn, Germany, which united them and pooled their certification and marketing resources together (Nicholls and Opal 2005, p.10-11). In 2002, they launched, for the first time, an International Fairtrade Certification Mark (FAIRTRADE Mark), which is now a famous brand name in the developed world. Following a decade of continuous growth, the Fairtrade system became one of the largest social certification systems in the world (Ibid., p.128).

Another step forward happened in 2003 when Fairtrade International's certification department ceased to exist in its original form and was outsourced to FLO-CERT that got the International Organisation for Standardisation's (ISO) accreditation in 2007 and became "the first accredited certifier for social standards and development" (FLO-CERT 2011, p.4). In

this way, the foundations of the Fairtrade system were laid, ushering in its rapid contemporary development.

Therefore, according to its supporters, Fair Trade is a general term corresponding to a broader social movement representing "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, marginalised producers and workers - especially in developing countries" (Fairtrade International and WFTO 2011, p.1). According to, for example, Murray and Raynolds (2007), Schmelzer (2006), Ransom (2001) and Raynolds (2000), Fair Trade is one of the most dynamic initiatives which emerged as a response to negative economic effects in recent decades.

Regarding the Fairtrade system, it is the leading Fair Trade movement in the agriculture and food sector and one of the biggest ethical certification systems in the world, following a very strict set of its own, combined with the International Organization for Standardisation (ISO) standards, rules and regulations. According to its supporters, it is based on five groups of high economic, labour, social and environmental principles and two monetary benefits - the Fairtrade minimum price and the Fairtrade premium (FINE 2001, see also in: Brkovic 2013a and 2012, Fairtrade International 2012b, Fairtrade International 2011a, Nelson and Pound 2009, Lamb 2008, Jaffee 2007, Raynolds et al. 2007, Hayes 2006, Nicholls and Opal 2005, Auroi 2003, Murray et al. 2003 and others).

Quantitatively, the Fairtrade system has expanded rapidly over the last two decades, at a stable rate of around 15 percent annually and it has been steadily developing even during and after the global food and economic crises. In 2013, the sales of Fairtrade products amounted to €5.5 ($6.15, £4, RSD660.77) billion worldwide (Fairtrade International 2014b, p.19). The global leader is the United Kingdom, with €2.04 ($2.28, £1.48, RSD245.08) billion worth of sales (Ibid.) and the Coordinator of Fairtrade Small Producers in Latin

America and the Caribbean (CLAC) is the regional producer network with the biggest number of producer groups (Ibid., p.1).

Country Growth rate 2012 (in€) 2013 (in€) Per capita Australia/NZ 1% 188,045,618 189,244,894 6.76 Austria 21% 107,000,000 130,000,000 12.54 Belgium 9% 85,837,221 93,209,845 8.3 Canada 1%* 182,638,667 173,179,745 4.87 Czech Republic 142%* 2,744,524 6,439,976 0.61 Denmark 13% 71,836,714 81,080,778 14.38 Estonia 65% 1,061,938 1,756,251 1.34 Finland 3% 152,263,629 156,785,309 28.7 France 3% 345,829,378 354,845,458 5.36 Germany 23% 533,062,796 653,956,927 8.08 Hong Kong 95% 422,803 825,175 0.11 India n/a - 641,890 0.0005 Ireland 13% 174,954,927 197,296,405 42.77 Italy 17% 65,435,059 76,355,675 1.24 Japan 22%* 71,419,147 68,976,524 0.54 Kenya n/a - 51,064 0.001 Latvia 4% 938,975 975,010 0.49 Lithuania 0% 846,027 842,258 0.29 Luxembourg 16% 8,319,391 9,628,859 17.32 Netherlands 6% 186,100,623 197,142,624 11.7 Norway 9%* 65,450,834 68,441,095 13.32 South Africa 22%* 22,263,619 22,573,605 0.42 South Korea 92% 1,989,631 3,814,805 0.08 Spain/Portugal 6% 22,274,635 23,663,783 0.42 Sweden 29% 178,951,375 231,668,646 23.91 Switzerland 13% 311,590,237 353,206,210 43.13 UK 12%* 1,904,891,092 2,044,926,208 31.7 USA 501%* 53,116,711 309,131,263 0.97 Rest of world 5% 47,487,290 49,657,508 0.01 Grand Total 15% 4,786,772,862 5,500,317,789 0.76

Table 3. Estimated Fairtrade retail sales by countries (Fairtrade International 2014b, p.19 and World Bank 2014).

Despite the above-stated fact and figures, both the total sales and the growth rates, which remained stable even during and after the crises, Fairtrade sales still do not represent more than one percent of the world commerce in products which are under its scope and for which there are Fairtrade standards (Fairtrade International 2012c, Jaffee 2007, Lyon 2006, Daviron and Ponte 2005, De Pelsmacker et al. 2005, Lewin et al. 2004, Ponte 2004 and MacGillivray 2000). Even the most important Fairtrade products, like Fairtrade coffee,

However, in 2004, Roosevelt remarked that "Fair Trade is taking off", due to its impressive growth rate and the potential for introducing new products, even though, in absolute numbers, its market penetration amounted to 0.01 per cent of the total global food trade at the time.

Furthermore, as Murray and Raynolds have stated, the Fairtrade facts and figures and its continual development "cannot be discounted as merely the practices of an obscure and irrelevant group of progressive producers and elite consumers. Fair Trade products represent one of the fastest growing segments of the global food market" (2007, p.3). In addition, the Fairtrade system emerged in response to the negative effects of the contemporary global economic system, seeking to create greater social equity (Murray and Raynolds 2007, Ransom 2001, Raynolds 2000 and others). In itself, this is an equally important and difficult task as maintaining the growth rates and winning a bigger share of the global food market. This point is crucial, given the fact that according to a former Managing Director of Fairtrade International, Luuk Zonneveld, 80 percent of food and agricultural products imported from the developing countries are imported from poor and marginalised producers. Since Fairtrade shares no more than two percent of that market, Fairtrade International can continue to raise questions regarding global trade repeatedly (in Nicholls and Opal 2005, pp.254-255).

There are other Fair Trade certification initiatives and international bodies as well, most notably, the World Fair Trade Organisation (WFTO), the global network of organisations that have Fair Trade as part of their mission, objectives and activities (Fairtrade International and WFTO 2011, p.1). The WFTO is actually a new name for the oldest international Fair Trade umbrella organisation, originally called the International Federation for Alternative Trade or International Fair Trade Association, which was established in 1989 (Moore et al. 2006, p.330).

Its accompanying monitoring system is not based on the standards recognised by the ISO, but on more flexible, "biennial self-assessments, peer reviews and external verification" (Fairtrade International and WFTO 2011, p.1). Furthermore, the WFTO is based on the Fair Trade Organisation Mark, which was created in January 2004, positioned to label organisations rather than products (Nicholls and Opal 2005, pp.8-9). Finally, it is not focused predominantly on food and agriculture, but also on handcrafts, garment, tourism and other business sectors (Ibid., p.141).

Even though initiatives like the WFTO are very important for the Fair Trade movement's development in general10, they will not be within the scope of my doctoral thesis for the following three reasons. Firstly, the Fair Trade movement as a whole, with all its initiatives is too broad and heterogeneous to be tackled in a single doctoral thesis at the level of analytical coherence aspired to. Secondly, the Fairtrade system is the most prominent part of Fair Trade and the main reason for its global success, since the impact of all other Fair Trade initiatives compared to Fairtrade International's is greatly inferior (Krier 2005). Thirdly, my research interest is primarily in food and agriculture, given the fact that food is the world's most important business and that agriculture is its bedrock (Tansey and Worsley 1995, p.5, 16, see also in Lang 2010). Therefore, progressive changes in these areas can have a profound impact on the world's poorest out of which, more than half are farmers (Fairtrade International 2013a, p.4).

Consequently, my doctoral research will focus on the Fairtrade system, easily recognisable by the FAIRTRADE Mark, which follows a set of strict rules, regulations and its own, combined with the ISO's standards. According to Harriet Lamb, the CEO of Fairtrade International, it has enabled seven million farmers, workers and their families to

10_{There is also a great number of major, non-Fairtrade, sustainable, fair and ethical certification and labelling}

initiatives like the Forest Stewardship Council, UTZ CERTIFIED, Bonsucro, Rainforest Alliance and many others (Fortin and Richardson 2013 and Cashore et al. 2004). However, they will not be in the focus of my research because they are not a part of the Fairtrade system.

move from income insecurity and poverty to economic self-sufficiency and ownership (2008, p.44). Finally, it is important to point out that my sole focus on the Fairtrade system is not unique in the Fair Trade literature and that other Fair Trade scholars have previously chosen the same area of research (for examples, see in: Doherty et al. 2013, Nelson and Pound 2009, Lamb 2008, Jaffee 2007, Hayes 2006, Schmelzer 2006 and many others).

Figure 1. Fairtrade International's FAIRTRADE Mark for products.

Regarding the structure of the Fairtrade system, three main links in Fairtrade value chains - three referent objects of my doctoral thesis, are easily recognised. The organised, poor and marginalised small-scale producers and hired labour, certified as per relevant Fairtrade standards, who produce Fairtrade products, in countries which are identified as "producer-countries" are the foundation of the system (Fairtrade International and WFTO 2011, p.1) and I will refer to them as "Fairtrade producers" in my doctoral thesis.

Producer-countries are economies which poor and marginalised small-scale farmers and workers are permitted to produce and certify Fairtrade products from primary production (Ibid.). All countries can produce or process Fairtrade products in secondary production, i.e. to produce Fairtrade orange juice from Fairtrade oranges, Fairtrade honey cereals with Fairtrade honey, or Fairtrade chocolate from Fairtrade cocoa and sugar, but only poor and marginalised small-scale producers and workers from producer-countries can produce

Fairtrade oranges, honey and cocoa and be certified according to adequate Fairtrade standards.

Once produced, the Fairtrade products are sold to the Fairtrade certified traders. At

present, there are thousands of Fairtrade certified exporters/importers,

manufacturers/processors, wholesalers and retailers worldwide (FairValley Farmworkers Association 2015). These companies, which I will refer to throughout my research as "Fairtrade traders" are certified mostly by NFOs11, which are, in turn, members of Fairtrade International.

NFOs are responsible for "...licensing, marketing, business development and awareness raising in a defined geographical area" (Fairtrade International and WFTO 2011, p.1). If there is no NFO, Fairtrade marketing organisations (FMO)12 and local pro-Fairtrade non-governmental organisations and informal grassroots groups and movements are responsible for promotion of the Fairtrade, and Fairtrade International is responsible for licensing "companies directly to use the FAIRTRADE Certification Mark" (Ibid.).

This system is governed by Fairtrade International, a "...multi-stakeholder, non-profit organisation..." (Ibid.). The system is monitored by FLO-CERT, an independent third-party certification body, which "evaluates Fairtrade certification applications, verifies compliance with the Fairtrade Standards during audits, and decides whether Fairtrade certification can be granted or not. Certificates are issued as proof of successful Fairtrade certification, and as authorization to trade Fairtrade products" (Ibid.).

The end of the supply chain features the third most important part of the system, the sensitised consumers who buy Fairtrade products. I will refer to them as "Fairtrade consumers" throughout.

11 _{Currently, there are 24 NFOs and two applicant members (Fairtrade International 2015c and Fairtrade}

The last two decades of the practical development of the Fair Trade movement in general and the Fairtrade system in particular were followed by the rise of the Fair Trade literature, which is a stream of academic, predominantly empirical literature (Nicholls and Opal 2005, p.23) exploring its benefits, limits and contradictions. Even though this body of work, presented across numerous academic journals, is still relatively limited, a clear differentiation is taking place, parallel with mutually beneficial relation with broader, particularly more theoretical, streams of literature. Indeed, the Fair Trade literature is especially interconnected and borrows a number of theoretical foundations and concepts from the findings of the following three bodies of work.

Firstly, it draws upon the development studies literature focused on the shortfalls of the global economic system in general and international trade in particular, explaining the emergence of Fair Trade (for examples in the Fair Trade literature see in: Lamb 2008, Jaffee 2007, Schmelzer 2006, Nicholls and Opal 2005, Nicholls 2004 and 2002 and others).

Secondly, on the global food system literature, especially informed by Gereffi's global value chain analytical framework (Gereffi et al. 2005 and Gereffi 1994). This is due to the fact that the Fairtrade system trades predominantly with food and agricultural products and that the trade is organised through global value chains with three key links, my referent objects: Fairtrade producers, traders and consumers (for examples in the Fair Trade literature see in: Doherty et al. 2013, Karjalainen and Moxham 2012, Nicholls 2010, Smith 2009, Davies 2009, Raynolds and Wilkinson 2007, Schmelzer 2006, Mair et al. 2006 and others).

Finally, the Fair Trade literature refers to caring across space literature, due to the Fairtrade system's fundamental mission of "re-connecting" producers, traders and consumers (for examples in the Fair Trade literature see in: Watson 2007 and 2006, Popke 2006, Goodman 2004, Castree 2004 and others). I will also use this body of work to explain the Fairtrade system's internal normative and operational logic, which is crucial to demonstrate

the mismatch between Fairtrade system's theoretical foundations and its exclusion practice, which will be explained in detail in chapters II and III.

Finally, the most important academic network supporting the Fair Trade scientific community is the Fair Trade Institute based in Switzerland, which describes itself as "[t]he most comprehensive online collection of Fair Trade publications, where researchers convene for Fair Trade" (2014, p.1). In addition, the International Fair Trade Symposium is the largest regular gatherings of Fair Trade scholars in the world.

1.4. Gaps in Fair Trade Literature - Voices of the Excluded

Due to the relative novelty of the Fair Trade literature, the complexity of the Fairtrade system and the fact that it evolves constantly, there are numerous undiscovered elements and therefore, numerous opportunities to make contributions to knowledge. Some of these unexplored aspects are the three gaps that I found.

Firstly, an unrevealed group that I identified as producer-excluded upper-middle- income economies, which poor and marginalised small-scale agricultural producers have, thus far, not been studied by the Fair Trade literature, and in practice are forbidden from producing Fairtrade products in primary production, and consequently, under a direct threat to become double-losers, expelled from both Fairtrade and non-Fairtrade systems. Secondly, Fairtrade certified traders and consumers of Fairtrade products from the same group that are largely unexplored by the Fair Trade literature as well. Thirdly, the literature does not discuss the potentials of countries from this group for creating national Fairtrade-like systems. Firstly, by equally developing all three Fairtrade aspects - production, trade and consumption, secondly, by connecting their prospective Fairtrade producers with their Fairtrade traders and

consumers and thirdly, the question whether the whole will be greater than the sum of its parts remains completely undiscovered by the same literature.

The Fairtrade system and Fairtrade International claim to have adopted a general

modus operandithat, firstly, invites all low-income, lower-middle-income and upper-middle- income economies (i.e. developing countries) to join as countries where Fairtrade products are produced in primary production, traded and consumed. Secondly, that the high-income economies (i.e. developed countries) are the countries where Fairtrade products are traded (or processed in secondary production) and consumed.

However, after the closer investigation of Fairtrade International's documentation in general and the Geographical Scope Policy of Producer Certification for Fairtrade International (Fairtrade International 2011b) in particular, it is clear that there are exceptions to this rule and that actually two groups of upper-middle income economies exist in regard to