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"Making Globalization Work for the Poor"

An Interview with Paul Rice,
Founder TransFair USA

(First published in The Stanford Daily, 4/19/2005)

Have you ever seen a “Fair Trade Certified” logo on a bag of coffee? If you have, then you already know the work of this week’s social entrepreneur, Paul Rice. In 1998, Paul Rice founded TransFair, the only independent certifier and promoter of Fair Trade products in the US. He has been awarded an Ashoka Fellowship for Social Entrepreneurship for his work on the behalf of farmers in the developing world.

The Daily: You founded TransFair in 1998 to certify and promote Fair Trade products. What is the big idea behind Fair Trade?

Paul Rice: Right now, everyone from activist organizations to the World Bank itself is showing us data that globalization has lead to a dramatic rise in trade and increased wealth.

But the questions is, who is getting that wealth? There are still 3 billion people that are surviving on $2 a day. Globalization is not solving that problem. Some people even believe that it’s worsening that problem.

The big idea behind fair trade is that you can actually make globalization work for the poor. We help communities that are currently victims of the market to become competitive, profitable players in the market.

The Daily: In order to get Fair Trade certification, companies must show that farmers have been paid a fair price, among other things. Doesn’t this raise the cost for consumers?

Paul Rice: Fair trade does cost companies who are getting certified. From a business perspective, the only way Fair Trade will work is if they can pass that extra cost onto the consumer. At the end of the day, fair trade will live or die by the consumer.

Consumers in this country are like a sleeping giant. They are not indifferent to world poverty—they just don’t know about it or what to do to change things.

Fair trade is not a boycott. Its more like a buy-cott. Let’s buy from companies who are trying to do the right thing. Let’s buy from companies who have been independently audited and certified to guarantee that their product comes from farmers who got a fair price.

The Daily: Fair Trade requires not only labor standards, but also environmental standards. What does Fair Trade do for the environment?

Paul Rice: Fair trade products are typically certified organic. We have very strong environmental stewardship criteria within the fair trade standard.

If you want to get certified, you cannot cut down your forest. We require conservation and reforestation. Farmers also have to protect their soils and streams, as well as monitor how chemicals are used, worker safety and health, and pest management.

Fair trade and the environmentalist movement go hand in hand. You cannot save the trees unless you help the people under the trees find another option.

The Daily: You graduated from college in 1983. How did you go from there to founding TransFair in 1998?

Paul Rice: I studied economics and political science as an undergraduate, and was really interested in poverty and underdevelopment. Two months out of college, I went to Nicaragua to stay for a year and get some hands-on experience in international development.

I ended up staying for eleven years. During those years, I worked on several different development projects, survived the war, and lost a lot of friends in the war. And this became my life.

After four years of working on fair trade in Nicaragua, I decided that the most important thing I could do with my life was to come back to the states and put Fair Trade on the map.

I went to get an MBA at Berkeley, and wrote the business plan for TransFair while I was there. I spent a few years raising the money, then launched it in 1998.

The Daily: Lots of students want to make the world a better place. What advice do you have for them?

Paul Rice: Go live your dream. Don’t let student loans stop you, and don’t take “no” for an answer. Use your youth and the relative freedom of that to explore.

For those of us who dream of a more sustainable world, we should explore the possibility that business and markets aren’t the enemies.

In our era, the challenge is to find ways to make business work for the poor—not to just opt out. Our challenge is to figure out how the system works, and find a way to enrich the lives of the poor, develop those communities, and make it all work.

Wow, great interview. How can I read them all?

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