Food Policy 25 (2000) 6989 www.elsevier.

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Organic production and ethical trade: denition, practice and links

A.W. Browne a,*, P.J.C. Harris a,b, A.H. Hofny-Collins b, N. Pasiecznik b, R.R. Wallace a
b a African Studies Centre, Coventry University, Priory Street, Coventry CV1 5FB, UK 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 and trade. This has evolved from concerns about fair trade, safe working conditions for producers and employees and sustainable and environmentally safe natural resource management. The principles of organic agriculture are wide ranging and include concerns for safe food production, for the environment, for animal welfare and for issues of social justice. A working denition of ethical trading, and an assessment of the links between organic production and ethical trading were obtained from 34 organisations in the UK involved in ethical or fair trading or organic agriculture. Interviewees were from major supermarkets, independent and multiple retailers, alternative trading organisations, importers, wholesalers, accreditation bodies, non-governmental development agencies and lobby groups. A denition of ethical trading based on the interviewees responses is developed and discussed. The paper examines current practice in ethical and organic trading and assesses the role of the Ethical Trading Initiative and major supermarkets. Current and potential links between organic production and ethical trade are explored. Constraints to linking the two concepts more fully, both conceptual and practical, are evaluated. There is potential for organic production to be ethical, using the holistic denition given here, by the addition of social criteria to the standards of the organic regulatory authorities. Ethical trading is now becoming mainstream trading and internationally traded 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 consumer

* Corresponding author. Tel.: +44-(0)1203-838444; fax: +44-(0)1203-838447. E-mail address: a.browne@coventry.ac.uk (A.W. Browne)
0306-9192/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 6 - 9 1 9 2 ( 9 9 ) 0 0 0 7 5 - 5

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Introduction In recent years there has been growing concern about ethical aspects of production and trade, particularly of renewable natural resources from the developing world. One response to this, the concept of fair trading, has been lobbied for effectively and gained ground in recent years, both in the UK and continental Europe, especially for food and beverage items from tropical developing countries. Fair trade is mainly concerned with producers and workers treatment within farming systems. It does not guarantee animal welfare or environmentally benign production methods, but it does include other social and environmental criteria not normally associated with conventional trade. In effect, the opposite of fair trade is not unfair trade but conventional 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 trade agreements, safe working conditions for disadvantaged producers and employees, and sustainable and environmentally safe natural resource management. The development and growth of ethical trading have in many cases been supported, and to some extent driven, by the commercial sector, often in collaboration with NGOs and lobby groups (Wells and Jetter, 1991; Barratt Brown, 1993; Christian Aid, 1996). The growing interest in organic and ethical production and trade has been both consumer driven and trade driven. Consumer theory places ethical consumerism in a fourth wave of consumerism, which seeks to reafrm the moral dimension of consumer choice (Gabriel and Lang, 1995, p. 166). Like the rst wave, the UK cooperative movement, ethical consumerism emphasises the links between production and consumption, locally and globally. Issues such as fair trade, worker exploitation and environmental impacts in Third World producer countries are therefore central concerns of ethical consumerism (Wells and Jetter, 1991). Consumer theory would suggest a synergy between ethical and organic, both being consumption responses that arise from similarly global concerns (Bell and Valentine, 1997). Coinciding with the fourth wave of consumer activism, there has been a growing debate about the morals and ethics of international trade. Just as Gabriel and Lang have identied a fourth wave of alternative consumerism, so Michael Barratt Brown (1993) drew attention to the considerable and growing network of alternative trading organisations, seeking deliberately to establish a more equal basis of exchange between the rst and third worlds (op. cit., p. 156). With the establishment of the World Trade Organisation, successor to the General Agreement on Tariffs and Trade (GATT), the debate about the impact of unrestricted world trade on developing countries has highlighted the absence from the trade agenda of issues of sustainable resource management, the regulation of commodity markets, and poverty reduction strategies (Watkins, 1995, p. 110). Such concerns, articulated by Christian Aid in their Global Supermarket report (1996), in the Oxfam Poverty Report (Watkins, op. cit.) and by the World Development Movement in their People before Prots campaign, have pushed forward the debate on ethical trading, which has now become a signicant issue for business, particularly retail corporations marketing goods ident-

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iable as Third World products. The establishment in 1998 of an Ethical Trading Initiative (ETI) by a group of large British companies, non-governmental organisations (NGOs) and trades unions, funded by the Department for International Development (DFID), marked a signicant step in building dialogue between business and development organisations and in raising the prole of the ethical agenda (see Christian Aid, 1997 and House of Commons, 1999). In its recent White Paper on international development (DFID, 1997) the UK Government has set out the importance that it attaches to ethical trade. This stance has been conrmed by government support for the Ethical Trading Initiative, which has the aim of helping to make substantial improvements to the lives of poor working people around the world by encouraging companies to adopt codes of conduct laying out 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 context of the pervading goal of poverty eradication (Carney, 1998, p. 3). Ethical trading is seen as an important component in building sustainable livelihoods, although by itself is not an answer to sustainability (NRI, 1998). Within this context DFID utilises, as a framework for analysis, a livelihood strategy that identies ve different types of assets upon which individuals draw to build their livelihoods: natural, social, human, physical and nancial capital. Potentially, the improvement in trading relationships through ethical trading, reinforced by organic concepts of production, contributes to the accumulation of both natural and social capital, through greater sustainability of natural resources and increased access by producer groups to networks of production and trade (Pretty, 1995). As the paper will show, livelihoods are considerably improved in communities growing fairly traded and/or organic produce and there is much evidence that this is translated into the enhancement of human capital (Pretty, 1998; Robins and Roberts, 1997). However, as a recent study points out, participation by producers in ethical and organic production may be limited by the availability of skills, labour and time (human capital) and land tenure (social capital) (Bloweld 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 certied organic produce has been available since the early 1970s. Organic standards apply to both crop and animal production and also to the production of processed foods. The principles of organic agriculture are wide ranging and include concerns for safe food production, for the environment, for animal welfare and for issues of social justice. With the current exception of social justice, these principles have been incorporated into UK and European legislation and to some extent are also regulated by international voluntary accreditation. Sustainability and organics are also closely linked. Many of the goals of sustainable agriculture correspond closely to those of organic agriculture, organic farming being one form of sustainable agriculture with a maximum reliance on selfregulating agro-ecosystems (Pretty, 1995). Lampkin (1994) uses the term sustainability in a wider sense, encompassing the conservation of non-renewable

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resources and issues of environmental and social sustainability, and states that sustainability lies at the heart of organic farming. Thus, increasingly, ethical and organic trading are beginning to overlap. An increasing number of fairly traded goods are also organic and the organic movement is 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 certication to include more ethical issues, then there would be considerable implications for the volume of trade, the ability of producers in developing countries to meet the requirements, and for the working conditions and livelihoods of producers. However, there has been no systematic attempt to examine the overlap between these concepts or to explore the implications, or the potential and constraints, of their integration. This paper therefore aims to produce a working denition of ethical trading; to assess 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 attitudes and practices of UK-based organisations with an interest in, or commitment to, ethical or fair trade or organic agriculture. The methodology adopted was therefore qualitative, utilising the expertise of key informants by means of interviews. The survey target groups included the major supermarkets, independent and multiple retailers, alternative trading organisations (ATOs), importers, wholesalers, accreditation bodies, non-governmental development agencies (NGOs) and lobby groups. All of the groups consulted are to varying degrees involved in international trading, either commercially, developmentally or through lobbying or regulation. The research focus was on agricultural and horticultural crops produced on smallholdings, co-operatives and plantations in developing countries: commodities which are, or could become, organically produced and traded internationally. The product groups for which information was sought included fresh and processed foods, beverages, textiles and, to some extent, craft items and cosmetics. Thirty key organisations were targeted for face-to-face interviews, as this was considered to be the most effective method of gaining detailed information. Of the 30 organisations targeted, one opted for a telephone interview and 27 were visited and interviewed. This represents a positive response rate of 93%. A list of the subject areas for discussion was sent to the interviewees in advance. Two researchers were present at each interview, which was held with the operational director or technical manager of the organisation. The interviews were conducted during a three-month period in 1998. A postal questionnaire was sent to a further 23 organisations from which six were returned completed, a response rate of 26%. In total, therefore, 34 organisations provided information (Table 1).

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Table 1 Organisations which provided information for this study Multiple retailers Major supermarket chain ASDA Stores Ltd a Boots Group plc Major retail chemist Body Shop International International retail company, specialising in cosmetics Co-operative Wholesale Society Major supermarket chain Marks & Spencer Major food and clothing retailer J. Sainsbury plc Major supermarket chain Waitrose Ltd Major supermarket chain Retail alternative trading organisations Equal Exchange Organic/fair trade produce importer Fair trade retail outlet Gateway World Shopa Out Of This World Organic/fair trade supermarket chain Oxfam Trading Fair trade importer/retailer, the trading arm of Oxfam Planet Organic Organic/fair trade supermarket Traidcraft Exchange Fair trade crafts/food importer and retailer Retail alternative trading organisation Tumi Craftsa Richard Adams Founder of Traidcraft, Out Of This World, and freelance ethical trade adviser Wholesale alternative trading organisations Wholesaler of organic and vegetarian foods Green City Wholefoodsa Fair trade/organic and whole food wholesaler/retailer Rainbow Wholefoodsa Suma Wholefoods Organic food wholesaler Tropical Wholefoods Importer of African dried fruits TWIN Trading Organic/fair trade produce importer Accreditation/research organisations Fairtrade Foundation Fair trade accreditation body and lobby group Henry Doubleday Research Organic agriculture/horticulture research and advisory organisation Association International Federation of A support and lobby group for organic organisations in over 100 Organic Agriculture Movements countries New Economics Foundation Independent economic think tank, and secretariat to the Ethical Trading Initiative Soil Association Organic accreditation body and lobby group United Kingdom Register of Food standards regulator within the Ministry of Agriculture, Organic Food Standards Fisheries and Food Fair trade producers Cafedirect A consortium of fair trade organisations, producing a brand of fair trade coffee Clipper Teas Organic/fair trade tea importer Green & Blacks Organic/fair trade chocolate importer Development/charitable organisations Christian Aid A relief and development agency New Consumer Charitable Trusta A lobby group for consumer related development issues Umbrella groups National Federation of Womens Consumer organisation and lobby group for Womens Institutes Institutes Farmers World Network Farmers educational and lobby group International Federation of A support body and lobby group for fair trade/alternative trading Alternative Traders organisations
a

Postal return.

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Concepts and denitions Ethical trading The research indicated that no strict denition of ethical trading exists. Every respondent had a view of what they thought ethical trading was, but unlike fair trade, which many respondents could dene clearly, and organic which is dened by strict technical criteria, the concept of ethical meant different things and its denition was determined by the different perspectives of the respondents. Of the 34 companies and organisations surveyed, the range of denitions of ethical trading varied widely. While some had clear denitions and company policy, most gave a general statement on what is, or is not, ethical trading. For example, TWIN stated that ethical was the same as their policy of socially and environmentally responsible production and trading. IFOAM and IFAT offered similar denitions, respectively no exploitation of resources or people and concerning the well-being of people and the environment as well as prot, while Rainbow Wholefoods dened ethical trade as that which had social and/or environmental considerations. There was a general view that ethical meant more than fair trade, but the denition also depended on the particular perspective of the organisation, ranging from consumerled to development-led. The term is not tied to an accreditation standard (unlike the Fairtrade mark or organic symbols), although several respondents applied their own internal codes of practice to support their buying policies. This was true in particular of the major supermarkets, two of which had their own terminology for ethical: sound sourcing and socially responsible sourcing. Their ethical criteria include protection of children, working hours, occupational health and safety, equal opportunity, freedom of association and fair remuneration. One major retailer said its wellknown brand label was itself synonymous with ethical standards. Another supermarket chain dened ethical not just in terms of safe and decent working conditions but also the provision for social benets 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 totally ethical. This meant that not only must the tea be ethically produced in terms of workers pay and conditions and their rights to certain social benets, but that these principles should also apply to their UK workers. Moreover, the paper used for the tea-bags and the product packaging must be ethically sourced. In short, their view was that there is no point in maintaining high people-focused standards if their environmental practices are socially detrimental. Although denitions and degrees of ethicalness varied, certain dening principles were identied 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 in terms of social and labour standards which are universally accepted. Examples of such practice include:

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Child labour minimum working ages which take account of local legislation and importantly, cultural tradition. Wages fair reward which does not exploit workers. Conditions reasonable working hours and occupational health and safety through the protection of workers from, and safe storage and labelling of, hazardous substances. Equality equal pay for equal work and non-discriminatory working practices. Worker organisation freedom of association, although the perception and role of trades unions and how in practice workers may organise remains a difcult concept. Management systems to ensure product quality and effective control through monitoring and auditing of working practices. Whilst all respondents agreed that ethical trading should incorporate such practices, there were differences of emphasis. For example, the ATOs and development NGOs in particular supported the inclusion of all these social and labour standards and were keen to ensure they were effectively monitored and audited. One NGO insisted that workers themselves must have a voice in this process. These organisations also emphasised the structural link between ethical trading and social development, a view which was also important for a major international retailer which uses the term community trade to describe its fair trade sourcing policy (Body Shop, 1998). The major supermarket retailers, on the other hand, were especially interested in labour standards and were developing their own codes of practice, whilst in most cases working with their counterparts and others (some within the ETI) to ensure the institution of universal standards. (ii) Environmental focus two broad issues, centred on environmental sustainability, including: Sustainable environmental practices such as careful land use and management, sustainable use of natural resources. Non-degradative environmental practices such as reducing pollution caused by chemical fertilisers, pesticides and other hazardous substances, and the environmental cost of transporting food over long distances. As a consumer issue, environmental standards were raised by many respondents operating from a variety of perspectives. As a result, different approaches were being taken to tackle the issue. For example, the major supermarkets took a pragmatic view suggesting that integrated crop management was a measure that would achieve satisfactory environmental protection without the need for farmers to be fully organic. As would be expected, environmental sustainability issues were very important to the organic movement, who strongly supported environmentalist arguments in general. Organic groups were concerned not only for the welfare of producers but also for consumers in terms of healthy consumption. Wholefood compa-

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nies also emphasised environmental issues. Development NGOs were less concerned about the environment, emphasising instead the importance of people-centred issues. The issue of food miles was raised by several respondents, particularly in the organic movement. The issue focuses around the negative environmental impact of transporting food over long distances from developing countries, especially when a home-grown substitute is available. A farmers networking and lobby group, for example, suggested that if food is grown and marketed locally, this is ethical even if the food is not organic. By contrast, a retail ATO which is at the forefront of marketing fairly traded and organic products from overseas, viewed food miles as a dated ideological concept: they argued that since producers in developing countries need to trade to improve their livelihoods, it is ethical to support their efforts. This is a view reinforced by initiatives such as the Export Promotion of Organic Products from Africa project (EPOPA), set up in 1995 by the Swedish International Development Agency (see Robins and Roberts, 1997) and by the Development Through Trade partnerships supported by several European donors in Zimbabwe. (iii) Animal-centred mainly concerned with animal rights and welfare, and including: No animal testing of experimental substances for cosmetic or other uses. Non-exploitative practices such as humane treatment of animals and efcient livestock husbandry. In the view of the organic movement efcient livestock husbandry was inextricably tied 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 development organisations simply because they have hitherto traded in primary commodities such as tea, coffee and cocoa. Animal welfare was however, a priority for the retailers, large and small, with the concern of the major supermarkets being led by high consumer awareness of this issue. Although not stated in such terms, the view of an international retailer of cosmetics was possibly more in line with the organic movement because it recognised the importance of animal welfare to producer groups. At the same time, it too was responding to consumer pressure. Using the denitions given by respondents a composite, but not consensus, denition of ethical trading can be given. Ethical trading is here dened as trading in which the relationship between the interested parties is inuenced by concern for some or all of: Workers pay and a range of rights and conditions, including health and safety, non-exploitative and non-discriminatory labour practices for men, women and children, and effective monitoring and auditing procedures. Producer livelihoods including fair prices and a commitment to social development. Sustainable production methods which engender sustainable environmental and developmental practices.

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Animal welfare including non-exploitative practices and humane treatment. This denition is holistic: trading organisations implementing all four components would, in the authors view, be fully ethical. Organic production A key question for this research is whether or not organic production can be said to be ethical, as dened above, and how far the two concepts can or should be linked. The denition of organic production given by the United States Department of Agriculture (USDA) is commonly used and has been widely adopted: A production system which avoids or largely excludes the use of synthetic compounded fertilisers, pesticides, growth regulators, and livestock feed additives. To the maximum extent feasible, organic farming systems rely upon crop rotations, crop residues, animal manures, legumes, green manures, off-farm organic wastes, and aspects of biological pest control to maintain soil productivity and 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 an entire organic production chain, which is both socially just and ecologically responsible (IFOAM, 1997). The International Federation of Organic Agriculture Movements (IFOAM), which represents the world-wide movement of organic agriculture, has aims that relate to workers rights, their basic needs, adequate return and satisfaction from their work and a safe working environment (IFOAM, 1997). They also aim to encourage organic farming associations to function along democratic lines and uphold the principles of division of powers. However, issues of social justice are only now beginning to be part of IFOAMs accreditation procedures. In the UK, organic accreditation is underpinned by European Council Regulation No. 2092/91 which came into force in 1991 (Soil Association, 1997) and is administered by the United Kingdom Register of Organic Food Standards (UKROFS). The European Regulation is conned to providing specic rules for the production, inspection and labelling of products, with implications for farming systems and the environment. Thus it does address some ethical issues, as dened above, but not all. It ensures that no harm is done to workers through the use of toxic pesticides, which is one of the commonly mentioned ethical criteria. It does not at this stage cover animal production or animal products. UKROFS has it own set of standards which has a wider scope, also covering animal production and welfare, and animal products. Within the UK, the largest certication scheme for licensing organic food production is the Soil Association Symbol Scheme. The Soil Association Symbol Scheme Standards comply with the EC regulation and UKROFS Standards as a minimum, but impose additional standards and cover a wider range of products/activities, based on the IFOAM guidelines. However, The Soil Association Standards refer to ethical issues other than the farming system, the environment and

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animal welfare only briey, and only in respect of food processing, packing and distribution (Soil Association, 1997). Although working conditions on organic farms tend to be fair, they do not have to be so to qualify for organic certication. Thus, if you buy a Soil Association Symbol product today you know that animal welfare is ensured, but there is no absolute guarantee that human welfare has enjoyed the same priority (Quested, 1998). In summary, organic production does not need to follow the full list of ethical considerations. If the organic movement through IFOAM approves and adopts proposed Social Justice Minimum Requirements, the Soil Association will have to implement them both in the UK and overseas in order to retain IFOAM accreditation. It would then follow that all organic produce certied by them would also be ethical. The inclusion of social criteria in European or national organic standards would ensure that all organic produce in the UK was ethical, according to the holistic denition given here.

Current practice Current practice in ethical and organic trading The current practice with respect to ethical trading and organic agriculture is determined 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 interests in the supply chain. Owing to the different denitions of the two categories (despite some overlap) and the different motivations for introducing them, they will be considered separately. Ethical trading, as explained, is, in current usage, a catch-all concept that includes a range of ethical considerations which are then put into practice in different ways by different organisations. In this study, all organisations claimed to be trading ethically, or striving towards doing so. As an analytical tool the concept is not helpful, but the term has gained credibility recently in the UK through the setting up in 1998 of the Ethical Trading Initiative (see below). Alternative trading shops (ATOs) rely on their name to give customers a guarantee of ethical trade. All of the retail organisations in this sector sell accredited Fairtrade and organic produce, if it exists, but otherwise buy from wholesalers in the chain with a reputation for trading fairly. Those that sell processed or fresh foods also try to buy organic wherever possible. The aim of these outlets is increasingly to offer customers a full range of products for a weekly shop, in which they know that everything in the shop is ethical. Organic produce, in contrast to ethical produce, occupies a somewhat different market niche from conventional produce. A signicant proportion is sold in organic shops and ATOs but multiple retailers are increasingly introducing organic produce into their stores. One major supermarket estimated its organic food sales to be about 1% of total food sales, and to be stocking almost 200 different organic lines. All of those interviewed reported a rapidly growing demand for organic produce. Organic

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sales nationally are estimated to have doubled in the two years to 1997, and are predicted 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 buying for reasons of health rather than for environmental concerns. High prole news stories of contaminated or unsafe conventional food, and worries over the use of genetically-modied (GM) foods or ingredients, are encouraging more people to turn to 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 constituency were asked to indicate what, in their view, is the ethical consumer. As with the concept of ethical, the ethical consumer was dened in many different ways. There was widespread agreement among the ATOs that there is a hierarchy of ethicalness. The true ethical consumers (suggested to be about 2% of the population) 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 at supermarkets but will buy Fairtrade coffee or organic produce sometimes because they are convinced of its claims and are prepared to pay a modest premium. However, respondents suggested that 80% would be ethical if there was no price premium and no special effort was required to buy ethically. The ATOs are all aware that they cater to the fully ethical 2% and that the supermarkets are capable of supplying, albeit in a modied version, the latent demand of the 80%. These gures are reinforced by a recent survey of ethical consumerism which found an increased willingness by respondents to shop ethically, with 7% now claiming to buy/use ethical products always/nearly always, almost double the gure of 1990. This is linked both to greater availability of fair trade products such as tea and coffee, now stocked in major supermarkets, as well as increased awareness of issues such as child labour. Correspondingly, the number of consumers unconcerned about ethical issues has fallen from 22% to 15% over the same time period (Mintel, 1999). The concerns of ethical consumers identied by interviewees for this present study can be classied into: Their own and their families health what is in the food. The environment how the food is produced. Animal welfare humane treatment of animals. 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 respondent was speaking of consumers patronising ATOs or the mainstream supermarkets. There was consensus that ideology and principle in purchasing choices have been replaced by concerns about health and the sustainability of the planet, and that grow-

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ing awareness of these issues makes most consumers, at least passively, ethical. Several interviewees noted the importance of institutional consumers in affecting the purchasing 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 that the premium paid for produce with a Fairtrade and/or organic symbol translates into greatly improved producer livelihoods. In Mexico, for example, the premium received by the 4800 members of a coffee growing union for organic coffee, sold to fair trade organisations, is used for a range of social and economic purposes including education, public transport, medical insurance and the running of provisions stores. Average family income since becoming organic has risen from US$250 to US$480 per year (Pretty, 1998, p. 182). Income generated from an organic tea project in Sri Lanka, selling to a German fair trading organisation, has provided ` funding for health care, creches, pre-schools and a community centre and housing project (Robins and Roberts, 1997). Organic cotton production by a farmers cooperative union with 7000 members in Uganda is reported to command farm-gate prices up to 60% above the price for non-organic cotton (Bloweld et al., 1998). Cafedirect, now sold in all the major UK supermarkets, buys from 14 producer organisations in seven developing countries in Latin America and Africa. It is estimated that 460,000 families in these countries benet from this premium (Pretty, 1998). Organic and fairly traded produce thus has considerable potential for improving the welfare of communities and adding to the stock of human capital. Consumption and production is linked, in consumers minds, by statements on product packaging which explain the products sourcing and its impact on producers and their communities. Ethical consumers can thereby be assured that their purchases are contributing to better environmental, health and working conditions for producers. The ethical trading initiative The Ethical Trading Initiative (ETI), funded by DFID and endorsed by the Department for Trade and Industry was formally launched in January 1998 (ETI, 1999). It involves a range of companies, NGOs, trade unions and the UK government through the Department for International Development. Its aim is to develop and encourage the use of a widely endorsed set of standards, embodied in codes of conduct, and monitoring and auditing methods which will enable companies to work together with other organisations outside the corporate sector to improve labour conditions around the world (ETI, 1997). The ETI does not specically dene ethical but it is concerned with labour and employment conditions and implementing internationally agreed standards endorsed by the International Labour Organisation (ILO) (ETI, 1999). It has now embarked on trials of different methods of inspection, monitoring and verication in three pilot projects including wine production in South Africa and horticulture in Zimbabwe (see ETI Submission to House of Commons, 1999). Once best practice has been identied, the expectation is that companies will wish to follow the guidelines; this will be an endorsement that these rms are trading ethically. However, the ETI is not a regulatory authority, nor a trademark. Environmental issues, organic standards and animal welfare issues are not included

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within the terms of the initiative. Within the terms of reference for this study therefore, the ETI is not a forum that will encourage links between ethical trading and organic agriculture, or even a debate about it. However, during the research it became clear that the ETI is important in shaping future trading terms with suppliers in the developing 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 the UK (Christian Aid, 1996) and wield huge power over production, consumption and regulation of the UK food system (Marsden and Wrigley, 1996). Their practices and policies are therefore of critical importance in steering the publics demand for ethical and/or organic trading. One development agency interviewed stated that supermarkets are the agents of change in this process. Although the major retailers could see links between ethical and organic, they were perceived to be different, requiring different marketing strategies. All supermarkets claim to be trading ethically, although the terminology includes socially responsible sourcing or sound sourcing. Being very large and high-prole organisations, these major retailers are sensitive to any criticism or exposure by the media, lobby groups or from their customers. Inuenced by this, and their own realisation of its commercial potential, they all spoke of a much increased focus on the topic of ethical trading within their own corporations over the last two years. All have, or are putting in place, systems to check labour conditions and, where relevant, environmental conditions throughout their supply chain. In many cases systems already in place were simply being made more formal or transparent. Most hoped to achieve their goal of sound sourcing for all their own-label product lines within the next ve years. In one case the supermarkets own-brand tea is now labelled as the tea you can trust, because it comes only from plantations where working and living conditions are safe and decent. None of the major retailers wanted to see a standard or state-regulated labelling system for ethical or its equivalent. Instead, the expectation was that the supermarkets name would stand for this and in most cases they felt it already did. The system of self regulation, assured through contracts, codes of conduct and rigorous product specication, backed up by complete traceability of produce, was seen to be preferable to regulation by the state (see Barrett et al., 1999 and Marsden and Wrigley, 1996). The widely held view was that ethical, dened by private rather than public regulation, will become the norm, with all own-brand products being both ethical and competitively priced. However, this system of private interest regulation (Marsden, 1998) will not guarantee transparency nor the adoption of consistent ethical standards, or its labelling (see House of Commons, 1999). The supermarkets views on organic sales were different from those on ethical sales. All consumers were said to be concerned about the safety of the food they buy, but interest in organic foods was perceived to be a niche market which, because of higher production and certication costs and therefore a premium price, would always be limited. Nevertheless, the range of organic lines was constantly being

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increased in the major supermarkets and all foresaw a very rapid increase in demand over the next few years. All of the supermarkets, however, reported difculties in securing reliable supplies of organic lines, particularly from domestic sources. About 70% of organic produce is therefore imported. This study found that the major supermarkets are adapting very rapidly to pressure for a more ethical trading stance and to provide more organic foods. Many respondents to this research perceived the supermarkets to be upgrading in both ethicalness and organicness rather than going completely ethical or organic. Terms such as a bit ethical and semi-organic were used to describe this. The widespread view was that supermarkets would take ethicalness from niche to mainstream, but that there would still be room for the cutting edge products, carrying accreditation symbols at a premium price.

Current links between organic production and ethical trade Many organisations surveyed in this research see a natural link between ethical trade and organic production. This was particularly true of smaller organisations directly in touch with suppliers (ATOs, importers and wholesalers) where, at the operational level, some producers could be viewed as ethical and organic in all but name. 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 Soil Association organic symbol. Specialist retailers (ATOs) also saw links through customer concerns for both social justice and environmental issues, consistent with the new consumerism. The major supermarkets, from a consumer perspective, took a different line with most of them seeing few links between ethical and organic. For example, one multiple retailer viewed organic farming as a technical issue of production, whilst stressing ethical trading as being people-centred. Another saw a possible link through customers concerns for environmental issues. One organisation, however, saw a stronger conceptual link, suggesting that it is impossible to be fully ethical without being organic and it is inconsistent to be called organic if workers are exploited. For marketing purposes however, this retailer views ethical and organic as completely separate issues. In summary, there are various links between ethical trading and organic agriculture both in concept and in practice. Although there are differences of view among respondents, in general most hold that it is possible to be ethical without being organic 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 overlap between ethical and organic, with both stemming from growing awareness of global

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issues as well as concerns about environment and social justice (Bell and Valentine, 1997). The new consumer is already exercising considerable inuence in the food system by deliberately selecting (as in fair trade coffee) or deliberately rejecting (as in GM foods) goods seen as ethical, or unethical. Fourth wave consumerism has a signicant inuence over productionism and trade (Gabriel and Lang, 1995) with implications for the growth of both ethical and organic, and perhaps their fusion. Several organisations interviewed for this research, including ATOs, lobby and consumer groups, claimed that the same sort of people are interested in both. Women were generally felt to be more concerned than men (also conrmed in business surveys) and, with women more likely to be responsible for food purchasing than men, 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 regulatory framework. Since there are no current ethical standards for accreditation, the organic movement could set its own standards through IFOAM, simply by adding social criteria to the existing environmental and animal welfare criteria. If this is achieved, and sufciently rigorous and detailed standards are taken up in the UK by accreditation bodies such as the Soil Association, then it would be possible to say that all organic produce is ethical according to the holistic denition given here. However, because of the legally dened status of organic produce, social criteria would probably have to be incorporated into EU regulations and UK law to guarantee this. Both IFOAM and the Soil Association are committed to the integration of social standards. At its general assembly in November 1998, IFOAM adopted the general principle that social justice and social rights are an integral part of organic agriculture and processing. General standards were approved requiring IFOAM accredited certication 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 is anticipated that more detailed and universally applicable standards will gradually evolve. The link between organic production and fair trade is a separate issue and is the subject of much debate (Maxted-Frost, 1997; Quested, 1998), perhaps because fair trade is currently a more clearly dened concept than ethical trade and includes an organised campaigning element in the same way as does organic production. There is certainly evidence to indicate that in the UK the fair trade and organic movements are moving closer together (Quested, 1998). However, the growing links between the organic and fair trade movements, while providing a forum for debate, are themselves unlikely to result in a merging of organic and ethical production. There is little chance that the Fairtrade Foundation will insist that all of its accredited products are organic, although they may become more environmentally conscious about means of production. Similarly, IFOAM could not insist that all organic produce from developing countries conforms to Fairtrade guidelines. Producers, exporters, importers, retailers and consumers will still demand organic produce that comes via conventional trading routes. Neither possibility of change was suggested by respondents from these organisations during this research, although there is some evidence that, among producer groups, the fair trade premium has been the catalyst for conversion to organic (Robins and Roberts, 1997, p. 38).

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Constraints to links between organic production and ethical trade Conceptual constraints There are both conceptual and practical constraints to closer links between organic production and ethical trading. Conceptually, as Table 2 shows, the two practices have different origins, with organic farming concerned with sustainable production systems largely in the developed world, while ethical trading is concerned with the trading relationship between the developed and developing worlds. The concept of ethical trading is further sub-divided. The rst is development driven, seeing trade as a means by which entering world markets can bring about development, whereby ethical trading is a development tool. The other is trade driven, seeing a need to provide consumers with products that are not exploitative of producers. This view is epitomised by the supermarkets and major retailers for whom ethical trading is a commercial 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 consumer choice and is based on technical criteria. Respondents to this research who were from ATOs, development groups, fair trade producers and the organic movement were able to see closer conceptual links between ethical and organic than were the major retailers. Another conceptual constraint to the link is the issue of universality of standards. Whilst organic agriculture has well developed criteria which can be universally applied, ethical trading, being concerned with employment, social and labour conditions, is more difcult to standardise world-wide. This is one of the major stumbling blocks currently facing IFOAM in its attempts to introduce social standards into accreditation criteria.
Table 2 Contrasts between organic production and ethical trade Organic Ethical

Origins

Focus

Development

Standards

Certication

As a description of trade between the As a method of agricultural production, developed and developing worlds, originating in the 1930s becoming widely used in the 1990s Focus on agricultural production Focus on peoples working conditions, systems that utilise biological rather especially in the developing world than chemical inputs Is not a development issue but is Is a development issue, and may concerned with sustainability of farming contribute to livelihood enhancement systems No universal standards. Voluntary codes Universal production standards, assured of conduct and self-regulation becoming through accreditation and inspection more common Yes, based on regulation by the state. Yes for fair trade; no for ethical. No Assured by legally registered labelling legal status for ethical claims on symbols on marketed produce marketed produce

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Practical constraints The practical constraints to linking ethical trading and organic production can be considered under three main themes, summarised in Table 3. Production constraints focus 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 linking ethical trading and organic production differently, according to whether or not they saw potential links and how closely they are in touch with their producers. Some respondents, particularly the major supermarkets, saw few links between the two and therefore could see few constraints. These organisations have numerous producers world-wide and deal with them indirectly through importers and other intermediaries in a long supply chain (Barrett et al., 1999). By contrast, ATOs (particularly those in the wholesale trade), fair trade producers and some of the accreditation bodies perceive there to be strong links between the two, and have much closer relationships with 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 addition of workers rights and social justice criteria. This was thought to be an additional hurdle to be overcome by farmers, many of them small scale, who already had low prot margins. One supermarket suggested that organic farmers needed to invest in irrigation, cooling, grading and other equipment to ensure the quality and marketability of their produce and that the addition of social conditions would divert investment from these necessary agronomic and technical improvements. A common concern was that the addition of ethical to organic criteria would slow down the rate of farms converting to organic, and thus restrict the supply of organic produce at a time of rapidly rising demand. The reverse process of currently ethical or fair trade farmers, whether accredited or good name, becoming organic was also considered to have cost constraints. Respondents both within and outside the organic movement recognised that farmers
Table 3 Practical constraints to linking organic and ethical Production Cost of converting to organic/ethical Cost of implementing social welfare criteria Availability of technical knowledge Availability of labour and time Market opportunities International links Certication Cost of certication Cost of inspection Regulation National inspection framework Recruiting independent inspectors Quality of inspectorate Acceptability of inspectors to producers (gender, language etc.)

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face costs and risks during the process of conversion to organic production, even if the long term outcome is one of good prots and environmental sustainability. In one wholefood ATO it was felt that the additional costs to their farmers in subSaharan Africa of organic accreditation would pose a threat to the viability of the business and the producers who depend on it. This concern was echoed by other trading organisations who had built up long-term relationships with producer groups. Many ATOs expressed the fear that conversion to organic would be very risky and that a halfway house of integrated crop management was necessary to guard against crop failure, particularly for difcult (pest prone) products such as fruits and vegetables. In fact, evidence about the costs of conversion to organic, particularly in smallscale systems where low input agriculture has been practised, is that conversion can be relatively cheap. Bloweld et al. (1998), for example, report that conversion to organic by horticultural producers in Uganda has been relatively easy because years of domestic conict meant that farmers had little access to high input agriculture. Page (1998) suggests that many organic products coming from Africa are being produced in farming systems that were organic by neglect, making the transition to organic by accreditation relatively quick. Other practical constraints to greater links between ethical trading and organic agriculture are those of certication procedures and the related issue of the independent monitoring and auditing of a system that claimed to be both ethical and organic (Table 3). Currently many developing country exporters of organic and/or fair trade produce receive assistance with becoming certied and nding export markets by link-ups with western agencies. Developed country importers and wholesalers, some interviewed for this research, provide nancial assistance for product development, as well as help with certication procedures for the organic or fair trade label. Dried fruit exports from Uganda, edible nuts, sesame and honey from Latin America and shea butter from Ghana were examples of products developed for export by trading organisations interviewed for this research. A study reported by Robins and Roberts of organic raspberries in Chile notes that organic importers in the UK, Netherlands and USA have played an important role in facilitating a dramatic rise in organic fruit exports from that country and others in Latin America (Robins and Roberts, 1997, pp. 4041). Whilst fair trade and organic produce form only a small proportion of total developing world trade, a high level of external assistance in certication is both necessary and possible. However, a principle of ethical trading is that of third party monitoring and auditing, not currently found in fair trade verication procedures. Indeed, the same organisation is often responsible for helping producers to achieve accreditation standards, for funding, buying and nding markets, a system of vertical integration[which could] undermine the credibility of the auditing system (Bloweld et al., 1998, p. 10). Independent inspection may therefore be necessary before such trade can be considered fully ethical. If ethical and organic are to be linked by regulation, inspection will become more demanding: organic inspectors will also have to check social and welfare criteria, potentially giving rise to two further regulatory constraints. First, the range of expert-

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ise needed for inspection could be difcult to assemble. A multi-skilled team to cover organic and ethical issues would need also to take account of language, cultural, gender and other factors which are crucial to the credibility and efciency of the process. Secondly, it may be difcult to recruit in-country inspectors who are independent and impartial as well as acceptable to both employers and employees. This same problem is currently confronting the ETI and major supermarkets, for whom independent auditing is also a key feature of the integrity of the trading relationship. Constraints therefore exist at all levels, from producers to consumers and from regulatory bodies to inspection. Any merging of ethical standards into already regulated organic standards would also have to overcome legal hurdles, probably necessitating changes in existing EU regulations and UK law, which must also be viewed as a constraint. The need for some form of standards for products to be marketed as ethical, by supermarkets or any other group of retail outlets, has to be seen as a vital step in order to avoid further confusion, but is unlikely to be achieved other than by private regulation. Conclusions There is potential for organic production to be ethical, using the holistic denition, 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 are widely perceived to be ethical, although their motivations for buying organic are said 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 for the organic movement and its consumers. The authors of this paper do not think that the addition of social criteria will accelerate the rate of increase in consumer demand for organic produce. This will happen anyway. However, insistence on social standards may slow down the process of farms converting to organic, putting a brake on the supply and maintaining higher prices. Whilst organic can become ethical, the converse is also possible. Fairtrade criteria include some limited environmental aspects, and an increasing number of Fairtrade products, notably coffee, tea and cotton, are also becoming accredited as organic. The strict standards required for organic produce are achieved through a combination of external advisory services, the Fairtrade premium and a growing awareness among producers of the potential for organic sales. There is also a strong lobby among development/environment-conscious consumer groups, backed up by consumer theory, for the fusion of organic and ethical issues, reecting the moral sensibilities of the new consumer. However, the ethical trading concept, as perceived by the major supermarkets and the ETI, does not include organic standards, nor would most of those lobbying for it wish to. Ethical trading does not prioritise environmental issues, but nor can it ignore them. The dialogue linking organic to ethical is therefore asymmetrical: the organic movement is positively seeking links but the ethical lobby has less commitment to organics. Development NGOs, and DFID, view organic farming as one possible avenue for achieving sustainable rural livelihoods.

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Due to their market dominance, supermarkets have a major role in inuencing the demand for ethically traded and organic goods. The current moves towards a higher level 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 (if they are not already) that are described as ethically traded. Ethical trading, as dened by supermarkets, will become mainstream trading. By advertising and promotion, consumers will be assured that they are buying ethically in their local supermarket even though the regulatory and inspection framework may not, in the short term, be independently 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 expect the UK to catch up with other European countries and the USA where organics have a much larger market share. Ethical trading is now becoming mainstream trading and, whether in the certication rules or not, internationally traded organic produce will need to be seen to be as ethical as conventional goods. In this sense there is a strong link between ethically traded and organic produce. It will therefore be necessary for developing world organic producers to show that they can conform to the holistic denition of ethical trading given in this report. Acknowledgements Since the paper was accepted for publication Richard Wallace has sadly died. His invaluable contribution to this piece of research is acknowledged with gratitude by all the team. This research was funded by the Department for International Development of the United Kingdom. However, the Department for International Development can accept no responsibility for any information provided or views expressed. References
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