Consumer willingness to pay for domestic ‘fair trade’: Evidence from the United States P.H. Howard 1, * and P. Allen 2 1 Department of Community, Agriculture, Recreation and Resource Studies, Michigan State University, East Lansing, MI 48824, USA. 2 Center for Agroecology and Sustainable Food Systems, University of California, Santa Cruz, CA 95064, USA. *Corresponding author: howardp@msu.edu Accepted 20 March 2008; First published online 30 June 2008 Research Paper Abstract The success of fair trade labels for food products imported from the Global South has attracted interest from producers and activists in the Global North. Efforts are under way to develop domestic versions of fair trade in regions that include the United States, Canada and the United Kingdom. Fair trade, which is based on price premiums to support agricultural producers and workers in the Global South, has enjoyed tremendous sales growth in the past decade. Will consumers also pay a price premium to improve the conditions of those engaged in agriculture closer to home? To address this question, consumer willingness to pay for food embodying a living wage and safe working conditions for farmworkers was assessed with a national survey in the United States. The question format was a discrete choice (yes/no) response to one of four randomly selected price premiums, as applied to a hypothetical example of a pint of strawberries. Multilevel regression models indicated that respondents were willing to pay a median of 68% more for these criteria, with frequent organic consumers and those who consider the environment when making purchases most willing to pay higher amounts. Although the results should be interpreted with caution, given the well-known gap between expressed attitudes and actual behaviors, we conclude that there is a strong potential market opportunity for domestic fair trade. Key words: fair trade, domestic, willingness to pay, consumers, ecolabels Introduction Introduced in Europe in 1988, fair trade is a food-labeling scheme designed to support social justice and ecological sustainability in the Global South. Fair trade was brought to the USA a decade later, first for coffee and then for tea, chocolate, tropical fruits, rice and spices. High interest in fair trade is indicated by an increase in sales and the expansion of locations where fair trade products are sold. For example, the sales of coffee increased approximately 75% annually from 2001–2005, with similar growth rates for newer products 1 , and distribution has expanded to the point that fair trade coffee is available at some McDonald’s and many Dunkin’ Donuts locations 2 . Currently, fair trade applies only to imported food products from the Global South. However, the issues that fair trade principles address—fair price, fair labor conditions, direct trade, democratic and transparent organ- izations, community development and environmental sustainability 3 —are also relevant to the Global North. Are consumers as willing to pay a price premium for these principles in their own countries? In other words, does domestic fair trade have the same market potential as international fair trade? Academic studies of consumers have found a willingness to pay a price premium for fair trade coffee 4 , but no comparable research exists for domestic fair trade 5 . To address the question of consumer support for domestic fair trade, we studied consumer willingness to pay premiums for a domestic product (strawberries) if it embodied basic fair trade principles of a living wage and safe working conditions for farmworkers. In this paper, we review the history of domestic fair trade, describe the research and explain the results, which indicate the level of potential consumer support for domestic fair trade. Domestic Fair Trade Fair trade core business principles originated with a domestic focus on postwar European recovery and, as an alternative to free trade, was later developed as a model for improving the lives of workers in impoverished nations 6 . Since this time, fair trade has come full circle, with many Renewable Agriculture and Food Systems: 23(3); 235–242 doi:10.1017/S1742170508002275 # 2008 Cambridge University Press