1-s2.0-S0306919299000755-main

Food Policy 25 (2000) 69–89www.elsevier.com/locate/foodpol

Organic production and ethical trade: definition,practice and links

A.W. Browne a,*, P.J.C. Harrisa,b, A.H. Hofny-Collins b,N. Pasiecznikb, R.R. Wallacea

a African Studies Centre, Coventry University, Priory Street, Coventry CV1 5FB, UKb International Research Department, Henry Doubleday Research Association, Ryton-on-Dunsmore,

Coventry CV8 3LG, UK

Abstract

In recent years there has been a growing debate about ethical aspects of production andtrade. This has evolved from concerns about fair trade, safe working conditions for producersand employees and sustainable and environmentally safe natural resource management. Theprinciples of organic agriculture are wide ranging and include concerns for safe food pro-duction, for the environment, for animal welfare and for issues of social justice. A workingdefinition of ethical trading, and an assessment of the links between organic production andethical trading were obtained from 34 organisations in the UK involved in ethical or fairtrading or organic agriculture. Interviewees were from major supermarkets, independent andmultiple retailers, alternative trading organisations, importers, wholesalers, accreditation bod-ies, non-governmental development agencies and lobby groups. A definition of ethical tradingbased on the interviewees’ responses is developed and discussed. The paper examines currentpractice in ethical and organic trading and assesses the role of the Ethical Trading Initiativeand major supermarkets. Current and potential links between organic production and ethicaltrade are explored. Constraints to linking the two concepts more fully, both conceptual andpractical, are evaluated. There is potential for organic production to be ethical, using the holis-tic definition given here, by the addition of social criteria to the standards of the organicregulatory authorities. Ethical trading is now becoming mainstream trading and internationallytraded organic produce will therefore have to comply with the current view of what is ethical. 2000 Elsevier Science Ltd. All rights reserved.

Keywords:Ethical trade; Fair trade; Organic production; Ethical Trading Initiative (ETI); Ethical con-sumer

* Corresponding author. Tel.:+44-(0)1203-838444; fax:+44-(0)1203-838447.E-mail address:[email protected] (A.W. Browne)

0306-9192/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved.PII: S0306 -9192(99 )00075-5

70 A.W. Browne et al. / Food Policy 25 (2000) 69–89

Introduction

In recent years there has been growing concern about ethical aspects of productionand trade, particularly of renewable natural resources from the developing world.One response to this, the concept of fair trading, has been lobbied for effectivelyand gained ground in recent years, both in the UK and continental Europe, especiallyfor food and beverage items from tropical developing countries. Fair trade is mainlyconcerned with producers’ and workers’ treatment within farming systems. It doesnot guarantee animal welfare or environmentally benign production methods, but itdoes include other social and environmental criteria not normally associated withconventional trade. In effect, the opposite of fair trade is not unfair trade but conven-tional trade. At the same time, a wider concept of ethical trading is now evolving.Different kinds of concerns are included within this concept including fair tradeagreements, safe working conditions for disadvantaged producers and employees,and sustainable and environmentally safe natural resource management. The develop-ment and growth of ethical trading have in many cases been supported, and to someextent driven, by the commercial sector, often in collaboration with NGOs and lobbygroups (Wells and Jetter, 1991; Barratt Brown, 1993; Christian Aid, 1996).

The growing interest in organic and ethical production and trade has been bothconsumer driven and trade driven. Consumer theory places ethical consumerism ina ‘fourth wave’ of consumerism, which seeks to “reaffirm the moral dimension ofconsumer choice” (Gabriel and Lang, 1995, p. 166). Like the first wave, the UK co-operative movement, ethical consumerism emphasises the links between productionand consumption, locally and globally. Issues such as fair trade, worker exploitationand environmental impacts in Third World producer countries are therefore centralconcerns of ethical consumerism (Wells and Jetter, 1991). Consumer theory wouldsuggest a synergy between ethical and organic, both being consumption responsesthat arise from similarly global concerns (Bell and Valentine, 1997).

Coinciding with the fourth wave of consumer activism, there has been a growingdebate about the morals and ethics of international trade. Just as Gabriel and Langhave identified a ‘fourth wave’ of alternative consumerism, so Michael Barratt Brown(1993) drew attention to the considerable and growing network of alternative tradingorganisations, seeking deliberately to establish a more equal basis of exchangebetween the first and third worlds (op. cit., p. 156). With the establishment of theWorld Trade Organisation, successor to the General Agreement on Tariffs and Trade(GATT), the debate about the impact of unrestricted world trade on developing coun-tries has highlighted the absence from the trade agenda of “issues of sustainableresource management, the regulation of commodity markets, and poverty reductionstrategies” (Watkins, 1995, p. 110). Such concerns, articulated by Christian Aid intheir Global Supermarket report (1996), in the Oxfam Poverty Report (Watkins, op.cit.) and by the World Development Movement in their ‘People before Profits’cam-paign, have pushed forward the debate on ethical trading, which has now become asignificant issue for business, particularly retail corporations marketing goods ident-

71A.W. Browne et al. / Food Policy 25 (2000) 69–89

ifiable as ‘Third World’ products. The establishment in 1998 of an Ethical TradingInitiative (ETI) by a group of large British companies, non-governmental organis-ations (NGOs) and trades unions, funded by the Department for International Devel-opment (DFID), marked a significant step in building dialogue between business anddevelopment organisations and in raising the profile of the ethical agenda (see Chris-tian Aid, 1997 and House of Commons, 1999).

In its recent White Paper on international development (DFID, 1997) the UKGovernment has set out the importance that it attaches to ethical trade. This stancehas been confirmed by government support for the Ethical Trading Initiative, whichhas the aim of helping to make substantial improvements to the lives of poor workingpeople around the world by “encouraging companies to adopt codes of conduct layingout minimum labour standards for their overseas suppliers” (ETI, 1999).

The 1997 White Paper also commits DFID to promoting ‘sustainable livelihoods’and to protecting and improving the natural and physical environment, in the contextof the pervading goal of poverty eradication (Carney, 1998, p. 3). Ethical trading isseen as an important component in building sustainable livelihoods, although by itselfis not an answer to sustainability (NRI, 1998). Within this context DFID utilises, asa framework for analysis, a livelihood strategy that identifies five different types ofassets upon which individuals draw to build their livelihoods: natural, social, human,physical and financial capital. Potentially, the improvement in trading relationshipsthrough ethical trading, reinforced by organic concepts of production, contributes tothe accumulation of both natural and social capital, through greater sustainability ofnatural resources and increased access by producer groups to networks of productionand trade (Pretty, 1995). As the paper will show, livelihoods are considerablyimproved in communities growing fairly traded and/or organic produce and there ismuch evidence that this is translated into the enhancement of human capital (Pretty,1998; Robins and Roberts, 1997). However, as a recent study points out,partici-pation by producers in ethical and organic production may be limited by the avail-ability of skills, labour and time (human capital) and land tenure (social capital)(Blowfield et al., 1998).

The concept of organic agriculture has different origins from the ethical debate.It has been developed in the UK since the 1930s and certified organic produce hasbeen available since the early 1970s. Organic standards apply to both crop and animalproduction and also to the production of processed foods. The principles of organicagriculture are wide ranging and include concerns for safe food production, for theenvironment, for animal welfare and for issues of social justice. With the currentexception of social justice, these principles have been incorporated into UK andEuropean legislation and to some extent are also regulated by international volun-tary accreditation.

Sustainability and organics are also closely linked. Many of the goals of sus-tainable agriculture correspond closely to those of organic agriculture, organic farm-ing being one form of sustainable agriculture with a maximum reliance on self-regulating agro-ecosystems (Pretty, 1995). Lampkin (1994) uses the term sus-tainability in a wider sense, encompassing the conservation of non-renewable


resources and issues of environmental and social sustainability, and states that sus-tainability lies at the heart of organic farming.

Thus, increasingly, ethical and organic trading are beginning to overlap. Anincreasing number of fairly traded goods are also organic and the organic movementis moving towards including social rights and fair trade in its standards (Quested,1998). Clearly if there is consumer pressure for ethically traded goods to be organic,or conversely for organic certification to include more ethical issues, then there wouldbe considerable implications for the volume of trade, the ability of producers indeveloping countries to meet the requirements, and for the working conditions andlivelihoods of producers. However, there has been no systematic attempt to examinethe overlap between these concepts or to explore the implications, or the potentialand constraints, of their integration.

This paper therefore aims to produce a working definition of ethical trading; toassess the current and potential links between organic production and ethical trade;and report on the constraints to closer links between the two.

Methodology

The aims of the research required a methodology that would uncover the attitudesand practices of UK-based organisations with an interest in, or commitment to, ethi-cal or fair trade or organic agriculture. The methodology adopted was therefore quali-tative, utilising the expertise of key informants by means of interviews. The surveytarget groups included the major supermarkets, independent and multiple retailers,‘alternative trading organisations’ (ATOs), importers, wholesalers, accreditation bod-ies, non-governmental development agencies (NGOs) and lobby groups. All of thegroups consulted are to varying degrees involved in international trading, either com-mercially, developmentally or through lobbying or regulation.

The research focus was on agricultural and horticultural crops produced on small-holdings, co-operatives and plantations in developing countries: commodities whichare, or could become, organically produced and traded internationally. The productgroups for which information was sought included fresh and processed foods, bever-ages, textiles and, to some extent, craft items and cosmetics.

Thirty key organisations were targeted for face-to-face interviews, as this wasconsidered to be the most effective method of gaining detailed information. Of the30 organisations targeted, one opted for a telephone interview and 27 were visitedand interviewed. This represents a positive response rate of 93%. A list of the subjectareas for discussion was sent to the interviewees in advance. Two researchers werepresent at each interview, which was held with the operational director or technicalmanager of the organisation. The interviews were conducted during a three-monthperiod in 1998. A postal questionnaire was sent to a further 23 organisations fromwhich six were returned completed, a response rate of 26%. In total, therefore, 34organisations provided information (Table 1).


Table 1Organisations which provided information for this study

Multiple retailersASDA Stores Ltda Major supermarket chainBoots Group plc Major retail chemistBody Shop International International retail company, specialising in cosmeticsCo-operative Wholesale Society Major supermarket chainMarks & Spencer Major food and clothing retailerJ. Sainsbury plc Major supermarket chainWaitrose Ltd Major supermarket chainRetail alternative trading organisationsEqual Exchange Organic/fair trade produce importerGateway World Shopa Fair trade retail outletOut Of This World Organic/fair trade supermarket chainOxfam Trading Fair trade importer/retailer, the trading arm of OxfamPlanet Organic Organic/fair trade supermarketTraidcraft Exchange Fair trade crafts/food importer and retailerTumi Craftsa Retail alternative trading organisationRichard Adams Founder of Traidcraft, Out Of This World, and freelance ethical

trade adviserWholesale alternative trading organisationsGreen City Wholefoodsa Wholesaler of organic and vegetarian foodsRainbow Wholefoodsa Fair trade/organic and whole food wholesaler/retailerSuma Wholefoods Organic food wholesalerTropical Wholefoods Importer of African dried fruitsTWIN Trading Organic/fair trade produce importerAccreditation/research organisationsFairtrade Foundation Fair trade accreditation body and lobby groupHenry Doubleday Research Organic agriculture/horticulture research and advisory organisationAssociationInternational Federation of A support and lobby group for organic organisations in over 100Organic Agriculture Movements countriesNew Economics Foundation Independent economic think tank, and secretariat to the Ethical

Trading InitiativeSoil Association Organic accreditation body and lobby groupUnited Kingdom Register of Food standards regulator within the Ministry of Agriculture,Organic Food Standards Fisheries and FoodFair trade producersCafedirect A consortium of fair trade organisations, producing a brand of fair

trade coffeeClipper Teas Organic/fair trade tea importerGreen & Blacks Organic/fair trade chocolate importerDevelopment/charitable organisationsChristian Aid A relief and development agencyNew Consumer Charitable Trusta A lobby group for consumer related development issuesUmbrella groupsNational Federation of Women’s Consumer organisation and lobby group for Women’s InstitutesInstitutesFarmers World Network Farmers educational and lobby groupInternational Federation of A support body and lobby group for fair trade/alternative tradingAlternative Traders organisations

a Postal return.


Concepts and definitions

Ethical trading

The research indicated that no strict definition of ethical trading exists. Everyrespondent had a view of what they thought ethical trading was, but unlike fair trade,which many respondents could define clearly, and organic which is defined by stricttechnical criteria, the concept of ethical meant different things and its definition wasdetermined by the different perspectives of the respondents.

Of the 34 companies and organisations surveyed, the range of definitions of ethicaltrading varied widely. While some had clear definitions and company policy, mostgave a general statement on what is, or is not, ethical trading. For example, TWINstated that ethical was the same as their policy of “socially and environmentallyresponsible production and trading”. IFOAM and IFAT offered similar definitions,respectively “no exploitation of resources or people” and “concerning the well-beingof people and the environment as well as profit”, while Rainbow Wholefoods definedethical trade as that “which had social and/or environmental considerations”. Therewas a general view that ethical meant more than fair trade, but the definition alsodepended on the particular perspective of the organisation, ranging from consumer-led to development-led. The term is not tied to an accreditation standard (unlike theFairtrade mark or organic symbols), although several respondents applied their owninternal codes of practice to support their buying policies. This was true in particularof the major supermarkets, two of which had their own terminology for ethical:‘sound sourcing’ and ‘socially responsible sourcing’. Their ethical criteria includeprotection of children, working hours, occupational health and safety, equal opport-unity, freedom of association and fair remuneration. One major retailer said its well-known brand label was itself synonymous with ethical standards. Another supermar-ket chain defined ethical not just in terms of safe and decent working conditions butalso the provision for social benefits for workers.

Some companies adopt a holistic interpretation of ‘being ethical’. For example,one tea importer stated that all aspects of their production system must be totallyethical. This meant that not only must the tea be ethically produced in terms ofworkers’ pay and conditions and their rights to certain social benefits, but that theseprinciples should also apply to their UK workers. Moreover, the paper used for thetea-bags and the product packaging must be ethically sourced. In short, their viewwas that there is no point in maintaining high people-focused standards if theirenvironmental practices are socially detrimental.

Although definitions and degrees of ‘ethicalness’ varied, certain defining principleswere identified by this research. These can be grouped into three broad areas:

(i) People-centred — concerned with workers’ welfare, whether on small farms,producer co-operatives, large estates or plantations. Several respondents spoke interms of social and labour standards which are universally accepted. Examples ofsuch practice include:


O Child labour — minimum working ages which take account of local legislationand importantly, cultural tradition.

O Wages — fair reward which does not exploit workers.O Conditions — reasonable working hours and occupational health and safety

through the protection of workers from, and safe storage and labelling of, hazard-ous substances.

O Equality — equal pay for equal work and non-discriminatory working practices.O Worker organisation — freedom of association, although the perception and role

of trades unions and how in practice workers may organise remains a difficult con-cept.

O Management systems — to ensure product quality and effective control throughmonitoring and auditing of working practices.

Whilst all respondents agreed that ethical trading should incorporate such prac-tices, there were differences of emphasis. For example, the ATOs and developmentNGOs in particular supported the inclusion of all these social and labour standardsand were keen to ensure they were effectively monitored and audited. One NGOinsisted that workers themselves must have a voice in this process. These organis-ations also emphasised the structural link between ethical trading and social develop-ment, a view which was also important for a major international retailer which usesthe term ‘community trade’ to describe its fair trade sourcing policy (Body Shop,1998). The major supermarket retailers, on the other hand, were especially interestedin labour standards and were developing their own codes of practice, whilst in mostcases working with their counterparts and others (some within the ETI) to ensurethe institution of universal standards.

(ii) Environmental focus — two broad issues, centred on environmental sus-tainability, including:

O Sustainable environmental practices such as careful land use and management,sustainable use of natural resources.

O Non-degradative environmental practices such as reducing pollution caused bychemical fertilisers, pesticides and other hazardous substances, and the environ-mental cost of transporting food over long distances.

As a consumer issue, environmental standards were raised by many respondentsoperating from a variety of perspectives. As a result, different approaches were beingtaken to tackle the issue. For example, the major supermarkets took a pragmaticview suggesting that ‘integrated crop management’ was a measure that would achievesatisfactory environmental protection without the need for farmers to be fullyorganic. As would be expected, environmental sustainability issues were veryimportant to the organic movement, who strongly supported environmentalist argu-ments in general. Organic groups were concerned not only for the welfare of pro-ducers but also for consumers in terms of healthy consumption. Wholefood compa-


nies also emphasised environmental issues. Development NGOs were less concernedabout the environment, emphasising instead the importance of people-centred issues.

The issue of ‘food miles’ was raised by several respondents, particularly in theorganic movement. The issue focuses around the negative environmental impact oftransporting food over long distances from developing countries, especially when ahome-grown substitute is available. A farmers’ networking and lobby group, forexample, suggested that if food is grown and marketed locally, this is ethical evenif the food is not organic. By contrast, a retail ATO which is at the forefront ofmarketing fairly traded and organic products from overseas, viewed food miles asa dated ideological concept: they argued that since producers in developing countriesneed to trade to improve their livelihoods, it is ethical to support their efforts. Thisis a view reinforced by initiatives such as the Export Promotion of Organic Productsfrom Africa project (EPOPA), set up in 1995 by the Swedish International Develop-ment Agency (see Robins and Roberts, 1997) and by theDevelopment ThroughTrade partnerships supported by several European donors in Zimbabwe.

(iii) Animal-centred — mainly concerned with animal rights and welfare, and includ-ing:

O No animal testing of experimental substances for cosmetic or other uses.O Non-exploitative practices such as humane treatment of animals and efficient live-

stock husbandry.

In the view of the organic movement efficient livestock husbandry was inextricablytied to producer livelihoods, and animal welfare issues were therefore a high priority.Very little emphasis was given to animal welfare issues by fair trade and develop-ment organisations simply because they have hitherto traded in primary commoditiessuch as tea, coffee and cocoa. Animal welfare was however, a priority for theretailers, large and small, with the concern of the major supermarkets being led byhigh consumer awareness of this issue. Although not stated in such terms, the viewof an international retailer of cosmetics was possibly more in line with the organicmovement because it recognised the importance of animal welfare to producergroups. At the same time, it too was responding to consumer pressure.

Using the definitions given by respondents a composite, but not consensus, defi-nition of ethical trading can be given. Ethical trading is here defined as trading inwhich the relationship between the interested parties is influenced by concern forsome or all of:

O Workers’ pay and a range of rights and conditions, including health and safety,non-exploitative and non-discriminatory labour practices for men, women andchildren, and effective monitoring and auditing procedures.

O Producer livelihoods including fair prices and a commitment to social develop-ment.

O Sustainable production methods which engender sustainable environmental anddevelopmental practices.


O Animal welfare including non-exploitative practices and humane treatment.

This definition is holistic: trading organisations implementing all four componentswould, in the authors’ view, be fully ethical.

Organic production

A key question for this research is whether or not organic production can be saidto be ethical, as defined above, and how far the two concepts can or should belinked. The definition of organic production given by the United States Departmentof Agriculture (USDA) is commonly used and has been widely adopted:

A production system which avoids or largely excludes the use of syntheticcompounded fertilisers, pesticides, growth regulators, and livestock feed additives.To the maximum extent feasible, organic farming systems rely upon croprotations, crop residues, animal manures, legumes, green manures, off-farmorganic wastes, and aspects of biological pest control to maintain soil productivityand tilth, to supply plant nutrients, and to control insects, weeds, and other pests.(USDA, 1980 cited in Lampkin, 1990).

The philosophy of organic agriculture has always been to “progress towards anentire organic production chain, which is both socially just and ecologically respon-sible” (IFOAM, 1997). The International Federation of Organic Agriculture Move-ments (IFOAM), which represents the world-wide movement of organic agriculture,has aims that relate to workers’ rights, their basic needs, adequate return and satisfac-tion from their work and a safe working environment (IFOAM, 1997). They alsoaim to encourage organic farming associations to function along democratic linesand uphold the principles of division of powers. However, issues of social justiceare only now beginning to be part of IFOAM’s accreditation procedures.

In the UK, organic accreditation is underpinned by European Council RegulationNo. 2092/91 which came into force in 1991 (Soil Association, 1997) and is adminis-tered by the United Kingdom Register of Organic Food Standards (UKROFS). TheEuropean Regulation is confined to providing specific rules for the production,inspection and labelling of products, with implications for farming systems and theenvironment. Thus it does address some ethical issues, as defined above, but not all.It ensures that no harm is done to workers through the use of toxic pesticides, whichis one of the commonly mentioned ethical criteria. It does not at this stage coveranimal production or animal products. UKROFS has it own set of standards whichhas a wider scope, also covering animal production and welfare, and animal products.

Within the UK, the largest certification scheme for licensing organic food pro-duction is the Soil Association Symbol Scheme. The Soil Association SymbolScheme Standards comply with the EC regulation and UKROFS Standards as aminimum, but impose additional standards and cover a wider range ofproducts/activities, based on the IFOAM guidelines. However, The Soil AssociationStandards refer to ethical issues other than the farming system, the environment and


animal welfare only briefly, and only in respect of food processing, packing anddistribution (Soil Association, 1997). Although working conditions on organic farmstend to be fair, they do not have to be so to qualify for organic certification. Thus,“if you buy a Soil Association Symbol product today you know that animal welfareis ensured, but there is no absolute guarantee that human welfare has enjoyed thesame priority” (Quested, 1998).

In summary, organic production does not need to follow the full list of ethicalconsiderations. If the organic movement through IFOAM approves and adopts pro-posed Social Justice Minimum Requirements, the Soil Association will have toimplement them both in the UK and overseas in order to retain IFOAM accreditation.It would then follow that all organic produce certified by them would also be ethical.The inclusion of social criteria in European or national organic standards wouldensure that all organic produce in the UK was ethical, according to the holisticdefinition given here.

Current practice

Current practice in ethical and organic trading

The current practice with respect to ethical trading and organic agriculture isdetermined by the interaction of the supply of goods with the various accreditation‘labels’, demand for these products and the policy and practice of the various interestsin the supply chain. Owing to the different definitions of the two categories (despitesome overlap) and the different motivations for introducing them, they will be con-sidered separately.

Ethical trading, as explained, is, in current usage, a ‘catch-all’ concept thatincludes a range of ethical considerations which are then put into practice in differentways by different organisations. In this study, all organisations claimed to be tradingethically, or striving towards doing so. As an analytical tool the concept is not help-ful, but the term has gained credibility recently in the UK through the setting up in1998 of the Ethical Trading Initiative (see below).

Alternative trading shops (ATOs) rely on their ‘name’ to give customers a guaran-tee of ethical trade. All of the retail organisations in this sector sell accredited Fair-trade and organic produce, if it exists, but otherwise buy from wholesalers in thechain with a reputation for trading fairly. Those that sell processed or fresh foodsalso try to buy organic wherever possible. The aim of these outlets is increasinglyto offer customers a full range of products for a weekly shop, in which they knowthat ‘everything in the shop is ethical’.

Organic produce, in contrast to ‘ethical’ produce, occupies a somewhat differentmarket niche from conventional produce. A significant proportion is sold in organicshops and ATOs but multiple retailers are increasingly introducing organic produceinto their stores. One major supermarket estimated its organic food sales to be about1% of total food sales, and to be stocking almost 200 different organic lines. All ofthose interviewed reported a rapidly growing demand for organic produce. Organic


sales nationally are estimated to have doubled in the two years to 1997, and arepredicted to rise from £260 million worth of sales in 1997 to £490 million by 2001(Mintel, 1997). Consumers were said by all the organisations interviewed to be buy-ing for reasons of health rather than for environmental concerns. High profile newsstories of contaminated or unsafe conventional food, and worries over the use ofgenetically-modified (GM) foods or ingredients, are encouraging more people to turnto organic foods, not only fresh fruit and vegetables, but also meat, drinks, juices,groceries and cosmetics.

Perceptions of the ethical consumer

All of the organisations interviewed for this research that have a public constitu-ency were asked to indicate what, in their view, is the ‘ethical consumer’. As withthe concept of ethical, the ethical consumer was defined in many different ways.There was widespread agreement among the ATOs that there is a ‘hierarchy’ ofethicalness. The ‘true’ ethical consumers (suggested to be about 2% of thepopulation) will go out of their way to buy on a cause-related basis. Some 20–30% of consumers are said to be semi-ethical, or ‘armchair’ ethical: they shop atsupermarkets but will buy Fairtrade coffee or organic producesometimesbecausethey are convinced of its claims and are prepared to pay a modest premium. However,respondents suggested that 80%would beethical if there was no price premium andno special effort was required to buy ethically. The ATOs are all aware that theycater to the fully ethical ‘2%’ and that the supermarkets are capable of supplying,albeit in a modified version, the latent demand of the ‘80%’.

These figures are reinforced by a recent survey of ethical consumerism whichfound an increased willingness by respondents to shop ‘ethically’, with 7% nowclaiming to buy/use ethical products always/nearly always, almost double the figureof 1990. This is linked both to greater availability of fair trade products such as teaand coffee, now stocked in major supermarkets, as well as increased awareness ofissues such as child labour. Correspondingly, the number of consumers ‘uncon-cerned’ about ethical issues has fallen from 22% to 15% over the same time period(Mintel, 1999).

The concerns of ethical consumers identified by interviewees for this present studycan be classified into:

O Their own and their families’ health — what is in the food.O The environment — how the food is produced.O Animal welfare — humane treatment of animals.O Helping people in the developing world — not exploiting the people who produce

the food.

The balance of these four sets of motives differed according to whether the respon-dent was speaking of consumers patronising ATOs or the mainstream supermarkets.There was consensus that ideology and principle in purchasing choices have beenreplaced by concerns about health and the sustainability of the planet, and that grow-


ing awareness of these issues makes most consumers, at least passively, ethical.Several interviewees noted the importance of institutional consumers in affecting thepurchasing choices of private and public sector bodies, particularly for tea and coffee.

Willingness to pay extra for ethically traded goods is based on the knowledge thatthe premium paid for produce with a Fairtrade and/or organic symbol translates intogreatly improved producer livelihoods. In Mexico, for example, the premiumreceived by the 4800 members of a coffee growing union for organic coffee, soldto fair trade organisations, is used for a range of social and economic purposesincluding education, public transport, medical insurance and the running of pro-visions stores. Average family income since becoming organic has risen fromUS$250 to US$480 per year (Pretty, 1998, p. 182). Income generated from an organictea project in Sri Lanka, selling to a German fair trading organisation, has providedfunding for health care, cre`ches, pre-schools and a community centre and housingproject (Robins and Roberts, 1997). Organic cotton production by a farmers’ co-operative union with 7000 members in Uganda is reported to command farm-gateprices up to 60% above the price for non-organic cotton (Blowfield et al., 1998).Cafedirect, now sold in all the major UK supermarkets, buys from 14 producer organ-isations in seven developing countries in Latin America and Africa. It is estimatedthat 460,000 families in these countries benefit from this premium (Pretty, 1998).Organic and fairly traded produce thus has considerable potential for improving thewelfare of communities and adding to the stock of human capital. Consumption andproduction is linked, in consumers’ minds, by statements on product packaging whichexplain the products’ sourcing and its impact on producers and their communities.Ethical consumers can thereby be assured that their purchases are contributing tobetter environmental, health and working conditions for producers.

The ethical trading initiative

The Ethical Trading Initiative (ETI), funded by DFID and endorsed by the Depart-ment for Trade and Industry was formally launched in January 1998 (ETI, 1999). Itinvolves a range of companies, NGOs, trade unions and the UK government throughthe Department for International Development. Its aim is to “develop and encouragethe use of a widely endorsed set of standards, embodied in codes of conduct, andmonitoring and auditing methods which will enable companies to work together withother organisations outside the corporate sector to improve labour conditions aroundthe world” (ETI, 1997). The ETI does not specifically define ‘ethical’ but it is con-cerned with labour and employment conditions and implementing internationallyagreed standards endorsed by the International Labour Organisation (ILO) (ETI,1999). It has now embarked on trials of different methods of inspection, monitoringand verification in three pilot projects including wine production in South Africaand horticulture in Zimbabwe (see ETI Submission to House of Commons, 1999).Once ‘best practice’ has been identified, the expectation is that companies will wishto follow the guidelines; this will be an endorsement that these firms are tradingethically. However, the ETI is not a regulatory authority, nor a trademark.

Environmental issues, organic standards and animal welfare issues are not included


within the terms of the initiative. Within the terms of reference for this study there-fore, the ETI is not a forum that will encourage links between ethical trading andorganic agriculture, or even a debate about it. However, during the research it becameclear that the ETI is important in shaping future trading terms with suppliers in thedeveloping world, including those that are, or might become, organic producers.

The role of supermarkets

The major food retailers now sell an estimated 80% of food purchased in theUK (Christian Aid, 1996) and wield huge power over production, consumption andregulation of the UK food system (Marsden and Wrigley, 1996). Their practices andpolicies are therefore of critical importance in steering the public’s demand for ethi-cal and/or organic trading. One development agency interviewed stated that super-markets are ‘the agents of change’ in this process. Although the major retailers couldsee links between ethical and organic, they were perceived to be different, requiringdifferent marketing strategies.

All supermarkets claim to be trading ethically, although the terminology includes‘socially responsible sourcing’ or ‘sound sourcing’. Being very large and high-profileorganisations, these major retailers are sensitive to any criticism or exposure by themedia, lobby groups or from their customers. Influenced by this, and their own realis-ation of its commercial potential, they all spoke of a much increased focus on thetopic of ethical trading within their own corporations over the last two years. Allhave, or are putting in place, systems to check labour conditions and, where relevant,environmental conditions throughout their supply chain. In many cases systemsalready in place were simply being made more formal or transparent. Most hopedto achieve their goal of ‘sound sourcing’ for all their own-label product lines withinthe next five years. In one case the supermarket’s own-brand tea is now labelled as‘the tea you can trust’, because it comes only from plantations where working andliving conditions are ‘safe and decent’.

None of the major retailers wanted to see a standard or state-regulated labellingsystem for ‘ethical’ or its equivalent. Instead, the expectation was that the supermar-ket’s ‘name’ would stand for this and in most cases they felt it already did. Thesystem of self regulation, assured through contracts, codes of conduct and rigorousproduct specification, backed up by complete traceability of produce, was seen tobe preferable to regulation by the state (see Barrett et al., 1999 and Marsden andWrigley, 1996). The widely held view was that ‘ethical’, defined by private ratherthan public regulation, will become the norm, with all own-brand products being bothethical and competitively priced. However, this system of ‘private interest regulation’(Marsden, 1998) will not guarantee transparency nor the adoption of consistent ethi-cal standards, or its labelling (see House of Commons, 1999).

The supermarkets’ views on organic sales were different from those on ethicalsales. All consumers were said to be concerned about the safety of the food theybuy, but interest in organic foods was perceived to be a niche market which, becauseof higher production and certification costs and therefore a premium price, wouldalways be limited. Nevertheless, the range of organic lines was constantly being


increased in the major supermarkets and all foresaw a very rapid increase in demandover the next few years. All of the supermarkets, however, reported difficulties insecuring reliable supplies of organic lines, particularly from domestic sources. About70% of organic produce is therefore imported.

This study found that the major supermarkets are adapting very rapidly to pressurefor a more ethical trading stance and to provide more organic foods. Many respon-dents to this research perceived the supermarkets to be upgrading in both ‘ethi-calness’ and ‘organicness’ rather than going completely ethical or organic. Termssuch as ‘a bit ethical’ and ‘semi-organic’ were used to describe this. The widespreadview was that supermarkets would take ethicalness from niche to mainstream, butthat there would still be room for the ‘cutting edge’ products, carrying accreditationsymbols at a premium price.

Current links between organic production and ethical trade

Many organisations surveyed in this research see a natural link between ethicaltrade and organic production. This was particularly true of smaller organisationsdirectly in touch with suppliers (ATOs, importers and wholesalers) where, at theoperational level, some producers could be viewed as ethical and organic in all butname. All the fair trade producers interviewed now produce some brands of coffee,tea or chocolate for the UK market that carry both the Fairtrade mark and SoilAssociation organic symbol. Specialist retailers (ATOs) also saw links through cus-tomer concerns for both social justice and environmental issues, consistent with thenew consumerism.

The major supermarkets, from a consumer perspective, took a different line withmost of them seeing few links between ethical and organic. For example, one mul-tiple retailer viewed organic farming as a technical issue of production, whilst stress-ing ethical trading as being people-centred. Another saw a possible link throughcustomers’ concerns for environmental issues. One organisation, however, saw astronger conceptual link, suggesting that it is impossible to be fully ‘ethical’ withoutbeing organic and it is inconsistent to be called ‘organic’ if workers are exploited.For marketing purposes however, this retailer views ethical and organic as com-pletely separate issues.

In summary, there are various links between ethical trading and organic agricultureboth in concept and in practice. Although there are differences of view amongrespondents, in general most hold that it is possible to be ethical without beingorganic and organic without being ethical. However, there is undeniable evidence,discussed in the following section, that a convergence of ideas is taking place.

Potential links between organic production and ethical trade

Consumer theory would suggest that there is a considerable degree of overlapbetween ethical and organic, with both stemming from growing awareness of global


issues as well as concerns about environment and social justice (Bell and Valentine,1997). The ‘new consumer’ is already exercising considerable influence in the foodsystem by deliberately selecting (as in fair trade coffee) or deliberately rejecting (asin GM foods) goods seen as ethical, or unethical. ‘Fourth wave’ consumerism hasa significant influence over productionism and trade (Gabriel and Lang, 1995) withimplications for the growth of both ethical and organic, and perhaps their fusion.Several organisations interviewed for this research, including ATOs, lobby and con-sumer groups, claimed that “the same sort of people are interested in both”. Womenwere generally felt to be more concerned than men (also confirmed in businesssurveys) and, with women more likely to be responsible for food purchasing thanmen, a fusion of ethical and organic was thought to be an inevitable market trend.

There is also a potential link between ethical and organic within the regulatoryframework. Since there are no current ethical standards for accreditation, the organicmovement could set its own standards through IFOAM, simply by adding socialcriteria to the existing environmental and animal welfare criteria. If this is achieved,and sufficiently rigorous and detailed standards are taken up in the UK byaccreditation bodies such as the Soil Association, then it would be possible to saythat all organic produce is ethical according to the holistic definition given here.However, because of the legally defined status of organic produce, social criteriawould probably have to be incorporated into EU regulations and UK law to guaranteethis. Both IFOAM and the Soil Association are committed to the integration of socialstandards. At its general assembly in November 1998, IFOAM adopted the generalprinciple that social justice and social rights are an integral part of organic agricultureand processing. General standards were approved requiring IFOAM accredited certi-fication programmes to ensure that organic producers have a policy on social justice,and that organic production is not based on violations of basic human rights. It isanticipated that more detailed and universally applicable standards will graduallyevolve.

The link between organic production and fair trade is a separate issue and is thesubject of much debate (Maxted-Frost, 1997; Quested, 1998), perhaps because fairtrade is currently a more clearly defined concept than ethical trade and includes anorganised campaigning element in the same way as does organic production. Thereis certainly evidence to indicate that in the UK the fair trade and organic movementsare moving closer together (Quested, 1998). However, the growing links between theorganic and fair trade movements, while providing a forum for debate, are themselvesunlikely to result in a merging of organic and ethical production. There is littlechance that the Fairtrade Foundation will insist that all of its accredited products areorganic, although they may become more environmentally conscious about meansof production. Similarly, IFOAM could not insist that all organic produce fromdeveloping countries conforms to Fairtrade guidelines. Producers, exporters,importers, retailers and consumers will still demand organic produce that comes viaconventional trading routes. Neither possibility of change was suggested by respon-dents from these organisations during this research, although there is some evidencethat, among producer groups, the fair trade premium has been the catalyst for conver-sion to organic (Robins and Roberts, 1997, p. 38).


Constraints to links between organic production and ethical trade

Conceptual constraints

There are both conceptual and practical constraints to closer links between organicproduction and ethical trading. Conceptually, as Table 2 shows, the two practiceshave different origins, with organic farming concerned with sustainable productionsystems largely in the developed world, while ethical trading is concerned with thetrading relationship between the developed and developing worlds. The concept ofethical trading is further sub-divided. The first is development driven, seeing tradeas a means by which entering world markets can bring about development, wherebyethical trading is a development tool. The other is trade driven, seeing a need toprovide consumers with products that are not exploitative of producers. This viewis epitomised by the supermarkets and major retailers for whom ethical trading is acommercial tool. This latter group sees ethical trading as an issue of business morals(‘it is about people’), whilst organic production is said to be an issue of consumerchoice and is based on technical criteria. Respondents to this research who werefrom ATOs, development groups, fair trade producers and the organic movementwere able to see closer conceptual links between ethical and organic than were themajor retailers.

Another conceptual constraint to the link is the issue of universality of standards.Whilst organic agriculture has well developed criteria which can be universallyapplied, ethical trading, being concerned with employment, social and labour con-ditions, is more difficult to standardise world-wide. This is one of the major stum-bling blocks currently facing IFOAM in its attempts to introduce social standardsinto accreditation criteria.

Table 2Contrasts between organic production and ethical trade

Organic Ethical

As a description of trade between theAs a method of agricultural production,

Origins developed and developing worlds,originating in the 1930s

becoming widely used in the 1990sFocus on agricultural production

Focus on people’s working conditions,Focus systems that utilise biological rather

especially in the developing worldthan chemical inputsIs not a development issue butis

Is a development issue, and mayDevelopment concerned with sustainability of farming

contribute to livelihood enhancementsystems

No universal standards. Voluntary codesUniversal production standards, assured

Standards of conduct and self-regulation becomingthrough accreditation and inspection

more commonYes, based on regulation by the state. Yes for fair trade; no for ethical. No

Certification Assured by legally registered labelling legal status for ethical claims onsymbols on marketed produce marketed produce


Practical constraints

The practical constraints to linking ethical trading and organic production can beconsidered under three main themes, summarised in Table 3. Production constraintsfocus on the costs of becoming fully ethical if already organic (and vice versa)and the associated producer-based constraints of technical and market knowledge.Organisations interviewed for this study perceived the practical constraints to linkingethical trading and organic production differently, according to whether or not theysaw potential links and how closely they are in touch with their producers. Somerespondents, particularly the major supermarkets, saw few links between the two andtherefore could see few constraints. These organisations have numerous producersworld-wide and deal with them indirectly through importers and other intermediariesin a long supply chain (Barrett et al., 1999). By contrast, ATOs (particularly thosein the wholesale trade), fair trade producers and some of the accreditation bodiesperceive there to be strong links between the two, and have much closer relationshipswith suppliers and producers.

Many organisations referred to the added costs and burdens on organic producers,and those who want to become organic, of becoming fully ethical by the additionof workers’ rights and social justice criteria. This was thought to be an additionalhurdle to be overcome by farmers, many of them small scale, who already had lowprofit margins. One supermarket suggested that organic farmers needed to invest inirrigation, cooling, grading and other equipment to ensure the quality and market-ability of their produce and that the addition of social conditions would divert invest-ment from these necessary agronomic and technical improvements. A common con-cern was that the addition of ethical to organic criteria would slow down the rateof farms converting to organic, and thus restrict the supply of organic produce at atime of rapidly rising demand.

The reverse process of currently ethical or fair trade farmers, whether accreditedor ‘good name’, becoming organic was also considered to have cost constraints.Respondents both within and outside the organic movement recognised that farmers

Table 3Practical constraints to linking organic and ethical

Production Certification Regulation

Cost of converting toCost of certification National inspection framework

organic/ethicalCost of implementing social

Cost of inspection Recruiting independent inspectorswelfare criteria

Availability of technicalQuality of inspectorate

knowledgeAcceptability of inspectors to

Availability of labour and timeproducers (gender, language etc.)

Market opportunitiesInternational links


face costs and risks during the process of conversion to organic production, even ifthe long term outcome is one of good profits and environmental sustainability. Inone wholefood ATO it was felt that the additional costs to their farmers in sub-Saharan Africa of organic accreditation would pose a threat to the viability of thebusiness and the producers who depend on it. This concern was echoed by othertrading organisations who had built up long-term relationships with producer groups.Many ATOs expressed the fear that conversion to organic would be very risky andthat a ‘halfway house’ of integrated crop management was necessary to guard againstcrop failure, particularly for ‘difficult’ (pest prone) products such as fruits and veg-etables.

In fact, evidence about the costs of conversion to organic, particularly in small-scale systems where low input agriculture has been practised, is that conversion canbe relatively cheap. Blowfield et al. (1998), for example, report that conversion toorganic by horticultural producers in Uganda has been relatively easy because yearsof domestic conflict meant that farmers had little access to high input agriculture.Page (1998) suggests that many organic products coming from Africa are beingproduced in farming systems that were ‘organic by neglect’, making the transitionto organic by accreditation relatively quick.

Other practical constraints to greater links between ethical trading and organicagriculture are those of certification procedures and the related issue of the inde-pendent monitoring and auditing of a system that claimed to be both ethical andorganic (Table 3). Currently many developing country exporters of organic and/orfair trade produce receive assistance with becoming certified and finding export mar-kets by link-ups with western agencies. Developed country importers and whole-salers, some interviewed for this research, provide financial assistance for productdevelopment, as well as help with certification procedures for the organic or fairtrade label. Dried fruit exports from Uganda, edible nuts, sesame and honey fromLatin America and shea butter from Ghana were examples of products developedfor export by trading organisations interviewed for this research. A study reportedby Robins and Roberts of organic raspberries in Chile notes that organic importersin the UK, Netherlands and USA have played an important role in facilitating adramatic rise in organic fruit exports from that country and others in Latin America(Robins and Roberts, 1997, pp. 40–41).

Whilst fair trade and organic produce form only a small proportion of totaldeveloping world trade, a high level of external assistance in certification is bothnecessary and possible. However, a principle of ethical trading is that of third partymonitoring and auditing, not currently found in fair trade verification procedures.Indeed, the same organisation is often responsible for helping producers to achieveaccreditation standards, for funding, buying and finding markets, a system of “verti-cal integration…[which could] undermine the credibility of the auditing system”(Blowfield et al., 1998, p. 10). Independent inspection may therefore be necessarybefore such trade can be considered fully ethical.

If ethical and organic are to be linked by regulation, inspection will become moredemanding: organic inspectors will also have to check social and welfare criteria,potentially giving rise to two further regulatory constraints. First, the range of expert-


ise needed for inspection could be difficult to assemble. A multi-skilled team tocover organic and ethical issues would need also to take account of language, cul-tural, gender and other factors which are crucial to the credibility and efficiency ofthe process. Secondly, it may be difficult to recruit in-country inspectors who areindependent and impartial as well as acceptable to both employers and employees.This same problem is currently confronting the ETI and major supermarkets, forwhom independent auditing is also a key feature of the integrity of the tradingrelationship.

Constraints therefore exist at all levels, from producers to consumers and fromregulatory bodies to inspection. Any merging of ethical standards into already regu-lated organic standards would also have to overcome legal hurdles, probably necessit-ating changes in existing EU regulations and UK law, which must also be viewedas a constraint. The need for some form of standards for products to be marketedas ethical, by supermarkets or any other group of retail outlets, has to be seen as avital step in order to avoid further confusion, but is unlikely to be achieved otherthan by private regulation.

Conclusions

There is potential for organic production to be ethical, using the holistic definition,by the addition of social criteria to the standards of the organic regulatory authorities.Many respondents think this could begin to happen soon. Organic consumers arewidely perceived to be ethical, although their motivations for buying organic aresaid to be based on health and environmental criteria rather than on workers’ welfare.Nevertheless, the inclusion of social criteria is perceived to be an ethical bonus forthe organic movement and its consumers. The authors of this paper do not think thatthe addition of social criteria will accelerate the rate of increase in consumer demandfor organic produce. This will happen anyway. However, insistence on social stan-dards may slow down the process of farms converting to organic, putting a brakeon the supply and maintaining higher prices.

Whilst organic can become ethical, the converse is also possible. Fairtrade criteriainclude some limited environmental aspects, and an increasing number of Fairtradeproducts, notably coffee, tea and cotton, are also becoming accredited as organic.The strict standards required for organic produce are achieved through a combinationof external advisory services, the Fairtrade premium and a growing awareness amongproducers of the potential for organic sales. There is also a strong lobby amongdevelopment/environment-conscious consumer groups, backed up by consumertheory, for the fusion of organic and ethical issues, reflecting the moral sensibilitiesof the ‘new consumer’. However, the ethical trading concept, as perceived by themajor supermarkets and the ETI, does not include organic standards, nor would mostof those lobbying for it wish to. Ethical trading does not prioritise environmentalissues, but nor can it ignore them. The dialogue linking organic to ethical is thereforeasymmetrical: the organic movement is positively seeking links but the ethical lobbyhas less commitment to organics. Development NGOs, and DFID, view organicfarming as one possible avenue for achieving sustainable rural livelihoods.


Due to their market dominance, supermarkets have a major role in influencing thedemand for ethically traded and organic goods. The current moves towards a higherlevel of ethicalness for everything that is sold, steered by the ETI but predating it,will ensure that the majority of consumers in the UK will soon be buying goods (ifthey are not already) that are described as ethically traded. Ethical trading, as definedby supermarkets, will become mainstream trading. By advertising and promotion,consumers will be assured that they are buying ethically in their local supermarketeven though the regulatory and inspection framework may not, in the short term, beindependently audited.

The move towards ethical as mainstream is unlikely to detract from organic sales.Demand for organic produce is said to be growing fast, and many respondents expectthe UK to catch up with other European countries and the USA where organics havea much larger market share. Ethical trading is now becoming mainstream tradingand, whether in the certification rules or not, internationally traded organic producewill need to be seen to be as ethical as conventional goods. In this sense there is astrong link between ethically traded and organic produce. It will therefore be neces-sary for developing world organic producers to show that they can conform to theholistic definition of ethical trading given in this report.

Acknowledgements

Since the paper was accepted for publication Richard Wallace has sadly died. Hisinvaluable contribution to this piece of research is acknowledged with gratitude byall the team. This research was funded by the Department for International Develop-ment of the United Kingdom. However, the Department for International Develop-ment can accept no responsibility for any information provided or views expressed.

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