Earlier this year, Wal-Mart began selling a variety of Fair Trade certified products at its Sam's Club stores, including coffee, tea, bananas, and cut flowers. In doing so, it has sparked quite a debate, which is discussed in a recent article in Business Week

For readers who are unfamiliar with the concept, Fair Trade is an alternative way of doing business which seeks, as the name suggests, greater fairness in international trade. For products to be certified as Fair Trade they must be produced in an environmentally sustainable way and the farmers have to be paid a fair, above market price. Fair Trade began in the 1950s as a movement of nonprofit importers that were committed to buying from small cooperatives of family farmers in the developing world. In recent years, however, Fair Trade has changed dramatically. Demand for Fair Trade products in the U.S. has increased significantly and as a result, large corporations have been rushing to cash in on the growing niche market. Hence, Wal-Mart's recent decision to sell Fair Trade flowers, coffee, and tea.

At first, this sounds like a great idea. If Fair Trade products have to meet strict social and environmental standards and Wal-Mart, the world's largest retailer begins to sell them, it should be a great opportunity for poor farmers, no? However, the appearance of Fair Trade products on Wal-Mart's shelves may not be as great for farmers or the planet as they claim. Here's why: in their quest to expand the Fair Trade market to include large corporations like Wal-Mart, Transfair, the largest Fair Trade labeling organization in the United States, has certified several large plantations as Fair Trade producers. These plantations treat their workers better than your average plantation, but they are a far cry from the farmer-run cooperatives that have historically been certified as Fair Trade. According to Jonathan Rosenthal, CEO of Oké USA, which sells fair-trade-certified fruit purchased directly from the farmer-run cooperatives, no plantation can truly be called a Fair Trade producer:

Plantations are the legacy of an unfair system where the elite and the wealthy classes denied small producers their land, and small farmers always got the raw end of the deal

Also, workers' rights groups like the International Labor Rights forum say it is highly difficult to monitor labor standards on these plantations and question whether Transfair has the capacity to do so. Many of the Fair Trade certified bananas and flowers sold at Wal-Mart come from plantations in Colombia. None of the Fair Trade plantations in Colombia have labor unions and the country is notorious for its abuses of workers rights.

Small, family-run farms are also much better for the environment than large agribusinesses, even if they are certified Fair Trade and organic.

Finally, and perhaps most importantly from our perspective, it is inherently contradictory for a company like Wal-Mart, which routinely abuses its workers in its stores at home and at its suppliers abroad, to congratulate itself for its commitment to Fair Trade. In an article last month, Business Week, elaborated on this issue as well.

None of this is to say that Wal-Mart's decision to sell Fair Trade products is unequivocally bad. There are intelligent, dedicated people on both sides of this issue. All I am saying is that Americans should think twice before patting Wal-Mart on the back for its commitment to farmers in poor countries. And without a doubt, Wal-Mart still has a lot of work to do before it can be called a responsible company.

For more information on Fair Trade, check out the Fair Trade Federation's website