In a coffee-scented conference room near Lake Geneva, Ramon Esteve, a sixth-generation commodities trader, sits amid his father’s collection of centuries-old grinders and explains why he’s helping impoverished farmers grow more coffee, cotton and cocoa.

He’s embracing a goal, first laid out by fair-trade activists, so he can secure more sustainable supplies for his company and clients such as Nestle, the world’s largest food company, and Starbucks, the biggest coffee-shop operator.

“For us it was survival,” said Esteve, 56, chairman of Pully, Switzerland-based Ecom Agroindustrial Corp., one of the largest coffee traders. “We’re not philanthropists. We’re businessmen.”

Esteve’s blunt acknowledgement shows how a mission-driven movement is transforming into a corporate push for productivity and profit. The cause begun in the 1980s by a Dutch priest and his activist-acolyte to help coffee farmers in the southern Mexican state of Oaxaca now includes some of the world’s biggest sellers of coffee (Nestle), lingerie (Limited Brands), chocolate (Kraft Foods’s Cadbury unit) and bananas (Wal-Mart Stores Inc.), to name a few.

New research has quantified the benefits to the bottom line: In a study released earlier this year, researchers at the Massachusetts Institute of Technology, Harvard University and the London School of Economics found they could boost bulk coffee sales by 10 percent just by adding a fair-trade label on the packages. Sales of goods approved by Fairtrade International, the world’s largest certifier of such products, soared 27 percent in 2010 to more than $5.7 billion.

The push to increase sales of goods deemed to be free of child labor and other practices has divided the movement, raised questions of whether going mainstream will undermine the cooperative farmers it was created to help and, most of all, strained the integrity of the certification systems that vouch for the fair-trade stamps that allow companies to charge consumers more.

“The fair-trade movement has profoundly lost its way,” said Aidan McQuade, who has advised Cadbury on cocoa buying as director of Anti-Slavery International, a human rights organization in London founded in 1839. “Its focus on volume – unless they have got all their systems in place to address fundamental issues like ethical trade, child labor and child slavery – is problematic.”

The strains are evident in the work of Fairtrade International, a Bonn-based network of 25 organizations that certifies more than 100 products from cotton to gold around the globe. The labeling group approved cotton in a Burkina Faso program that Bloomberg News recently found is using child labor. That program supplies fiber to Limited Brands’ Victoria’s Secret division, which said it is investigating the issue.

Fairtrade also signed off on soccer balls made in Pakistan by suppliers that violated fair-trade standards, according to an International Labor Rights Forum report last year by the Washington non-profit. Over the years, Fairtrade’s auditors have found breaches of standards in the industry that led to the suspension of certification until the necessary corrective action was taken, said Barbara Crowther, spokeswoman for the Fairtrade Foundation, a non-profit that licenses use of the Fairtrade brand in Britain.

Fairtrade International took a year and a half to commission an independent review after BBC disclosures in March 2010 that children harvested Ghanaian cocoa certified by the group for suppliers to Cadbury and other companies, McQuade said.

“It has taken longer than we originally planned to get this under way,” Crowther said of the independent review, which she described as not just a response to the BBC report, but “an assessment of Fairtrade’s whole approach to tackling child labor in cocoa in the region.”

The problems illustrate the difficulty in broadening the reach of ethical commerce.

“To spread the benefits of fair trade, we have to mainstream. It’s challenging, but we are determined to do that with integrity,” Crowther said. “We have done a huge amount to improve and strengthen and professionalize the certification system, and we are still working on it.”

The group’s struggles to police its own system come as the number of ethical labels has mushroomed. The creation of 202 new ones in the past decade boosted the total tracked by Ecolabel Index to 424. That includes those created by companies, such as Starbucks’ own stamp for its producers, CAFE Practices.

The growth has thrown into question the very definition of fair trade and exposed rifts between the movement’s founders.

What evolved into Fairtrade International began in 1985 when the Dutch missionary priest, Frans van der Hoff, and a trade-campaigner friend, Nico Roozen, met in Utrecht in the Netherlands. In a local supermarket, they discussed how to bring coffee grown by Mexican cooperative farmers to consumers.

“Our coffee belongs on these shelves,” Roozen recalls van der Hoff telling him.

The pair developed a system where farmers were guaranteed a minimum price and a social premium to be used for projects such as health clinics and schools. They dubbed their label Max Havelaar, after the idealistic Dutch colonial officer in a 19th-century novel about the coffee trade.

Fairtrade International still uses their model, paying farmers premiums totaling $164 million from 2007 to 2010. Fairtrade estimates 1.15 million farmers and workers were in the system last year.

Today, van der Hoff and Roozen are at odds over how best to help producers amid the surge in demand for fair-trade goods.

“The two founding fathers of the movement are taking different positions,” said Roozen, 58, the son of a tulip farmer. “He is criticizing fair trade because it is making compromises with big companies like Nestle. And I am criticizing fair trade because they haven’t taken the lead in mainstreaming fair trade.”

Farmers must be trained to partner with major corporations so they can boost volume, said Roozen, director of the Dutch nonprofit Solidaridad. He works with Ecom, where Esteve’s chief adviser on sustainability issues, David Rosenberg, considers Roozen a mentor. They say they can offer farmers better prices and help in boosting yields without a formal fair-trade system.

Van der Hoff and his allies say corporations will offer those prices only until fair-trade cooperatives wither and die.

“It just ends in fair-washing and smokescreens,” said van der Hoff, 72, who still lives with the Oaxaca farmers he started helping three decades ago. “They are deceiving themselves.”

Fair trade is increasingly becoming a marketing strategy where the farmers’ poverty is a necessary ingredient to make consumers feel good about themselves, said Bill Fishbein, who founded Coffee Kids in 1988 to provide health and education services to poor coffee growers.

“We are way overpromising and underdelivering,” Fishbein said.

Different companies use different terms – fair trade, sustainability, shared value. They say they’re working toward a similar goal: improving the quality of farmers’ products and lives.

Nestle announced a plan last year to double purchases of coffee from growers for its Nescafe brand to help guarantee supply and boost quality.

“We are trying to buy more coffee directly from farmers because then we can track where it comes from and give technical assistance,” said Nestle spokeswoman Melanie Kohli. “We want to build long-term trust.”

Ecom is expanding programs to help farmers improve their harvests because it has seen its supply base dwindle when growers don’t make enough money.

“What do you do to keep them on the land? You train them,” said Esteve, a Spanish national who was born in Dallas and lives in Switzerland. “These people could easily, easily double their yields by enrolling in these programs and following the best practices we are trying to promote.”

Esteve said he understands the concerns of Mexican farmers and advocates such as van der Hoff. In the 1990s, fewer growers were selling beans to Ecom’s buyers because they weren’t paid enough money by independent middlemen, known as coyotes, who were “probably a usurer in some cases,” he said.

To establish trust, Esteve said, he hired some of the coyotes and trained them as agronomists, who teach the science and economics of better crop production. Agronomists now outnumber traders at Ecom, whose Mexican unit, Agroindustrias Unidas de Mexico, is certified to buy and sell Fairtrade coffee.