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How fair is Fairtrade?

Established for almost twenty years, Fairtrade products are moving from niche markets to the mainstream. In the UK alone, the market grew last year by 40 per cent, whilst the range of goods has grown in the past two years by 80 per cent to over 1,500 products, including not only foods, but also cotton, clothing and footballs. According to the certification body Fairtrade Labelling Organisations International, more than one million producers, workers and their families in 50 countries benefit from Fairtrade.

Yet despite increasing consumer demand, there are concerns over the premium pricing of Fairtrade products in some supermarkets, and criticism from others that the food giant Nestlé has been granted Fairtrade status for its Partners Blend Coffee. Some also believe that Fairtrade certification, which requires farmers to pay annual fees for inspection, is expensive. In this edition of New Agriculturist, we provide a selection of these points of view.

What do farmers and communities get from Fairtrade?

Our members have greatly benefited from the profits Fairtrade has generated. On top of that, we are now getting technical and financial support that enables us to continue our tradition of excellence. Therefore, Fairtrade membership is very important to our organisation and its members.
Tadesse Meskela, General Manager, Oromia Coffee Farmers' Co-operative Union in Ethiopia

With world market prices as low as they are right now, we see that a lot of farmers cannot maintain their families and their land anymore. We need Fairtrade now more than ever.
Jerónimo Bollen, Director of Manos Campesinas, a Fairtrade coffee cooperative in Guatemala

Through Fairtrade we have been able to change our agricultural techniques to improve the quality and quantity of our teas. But we have also opened new access roads which have benefited all in the community.
Silver Kasaro-Atwoki from the Mabale Growers Tea Factory in Uganda, quoted by Terry Macalister in The Guardian, Wednesday March 8, 2006

Local markets are important but the best price for our produce lies in countries far from here. Getting a Fairtrade deal for apricot farmers in these remote valleys is a lifeline.
Sher Ghazi, Hunza Valley, Pakistan

The majority of coffee is grown by independent small farmers... For these producers, receiving a fair price for their beans is more important than any other aspect of fair trade. Most tea, however, is grown on estates. The concern for workers on tea plantations is fair wages and decent working conditions. Fairtrade criteria address this by using two sets of producer standards... The first set applies to smallholders organized in cooperatives or other organisations with a democratic, participative structure. The second set applies to organised workers, whose employers pay decent wages, guarantee the right to join trade unions and provide good housing and safety as well as environmental standards.
John Madeley, A People's World, published by Zed Books

Is the Fairtrade price a good one?

For growers, Fairtrade means prices that always cover the cost of production and allow for sustainable livelihoods, no matter how low the world price goes for their crops. Importantly the Fairtrade price also includes an additional social premium so that growers can invest in their communities and businesses.
Co-operative supermarket information leaflet on Fairtrade

Fairtrade certification helps stabilise the price year after year for farmers rather than leave them to fend for themselves in a volatile market. But these farmers are a long way away from having a decent standard of living with the Fairtrade prices.
Tim Schilling, Director, Partnership for Enhancing Agriculture in Rwanda through Linkages (PEARL), which focuses on coffee production

In Brazil, $1.26 per pound for coffee is a fortune. In the forest in the mountains of Mexico, the money barely is enough to justify doing it.
Kevin Knox, a coffee consultant in Boulder, Colorado

In today's market the Fair Trade commitments we make to the farmers through livable prices and access to credit are essential to keeping the farm communities on the land, feeding their families, and providing us with great coffee at home.
Dean Cycon, Dean's Beans Organic Coffee Company, in Making a Difference: The Real Impact of Fair Trade

Who buys Fairtrade, and why?

We want to create a fair trade network in Latin America. There is an increasing awareness among people in the South and they want to reflect that in their consumption habits.
Rafael Vizcarra, Maquita Comercializando como Hermanos (MCCH) Ecuador, quoted in the New Internationalist, April, 2006

Some people assume that it's a middle-class preoccupation, but that is slightly arrogant I would say... I visited a homeless project where they are selling 100% Fairtrade coffee because they say 'we know what it's like for those farmers and we want to play our part in making a difference'... As we see with the Co-op and Asda it is people across the spectrum who are ready to buy Fairtrade.
Harriet Lamb, Executive Director, Fairtrade Foundation, quoted by Terry Macalister in The Guardian, Wednesday March 8, 2006

The problem here is that consumers are inherently unethical. On the one hand organic is growing, Fairtrade is entering the mainstream and shoppers are rediscovering farmers' markets. On the other hand we're value shoppers who want the best deal on everything. We'll buy a new Honda hybrid one week, then hop on an easyJet flight for a minibreak. If the price is right, we're happy not to question the provenance of a product at all.
Julian Hunt, editor of The Grocer, quoted in The Sunday Times, April 2nd, 2006

Premium prices for consumers, but where does the money go?

Critics say that fair trade will never lift a country out of poverty; indeed, it may keep it there, because the money generated from sales goes almost in its entirety to rich countries which promote the products. Only about 5% of the sale price of a fair trade chocolate bar (which retails for £1.73 in the UK shops) may actually go to the poor country.
John Vidal & Paul Brown, Feel-good factor: But will it save the planet? The Guardian, May 20th, 2005

Our Fairtrade bananas earn us a social premium which we can spend on what we like in the community. Let's say a poor farmer's house gets burned, we can help. We can buy protective wear. We're thinking of pension schemes for our old farmers and healthcare. Our big purchase has been a 29 seater school bus to get the children safely to secondary school.
Deles Warrington, Chair of Calibishi Farmers' Group, Dominica

The supermarkets...sell Fairtrade as premium lines, with margins to match. Any intelligent person will ask themselves a simple question: should I pay up to 80p more for my bananas when only 5p will end up with the grower; or should I just buy the regular ones and give the difference to a decent development charity?
Philip Oppenheim, The Spectator, November, 2005

Fair Trade is automatically considered to be much more expensive, but is rarely compared with quality brands. The real cost lies in our logistics, sourcing from villages in the majority world, coupled with the sourcing of environmentally friendly materials. We pay producers 50% in advance, which means we have extra costs of financing these loans. Most customers are not prepared to pay for this, so our team has to work really efficiently. The way forward is to build greater sales volume.
Safia Minney, Managing Director, People Tree, fair trade clothing company

The challenge of going mainstream

Fairtrade now faces the dilemma the organic movement had to face 10 years ago. If it wants to go mainstream, it has no choice but to deal with the big supermarkets because they have such a stranglehold on the market. If it does deal with them, it has to bow to the methods of production they impose. If supermarkets double the orders for Mother's Day, then Fairtrade will have to run shifts as long as needed to fulfil them... The Fairtrade movement will have to confront the possibility that organising labour across a whole sector to face up to these sorts of pressures may do more good than singling out individual producers and asking consumers to pay more.
Felicity Lawrence, Why I won't be giving my mother Fairtrade flowers, Saturday March 5, 2005, The Guardian

Fulfilling the buyers' demands has been a challenge. There are tough, regular audits. We had to up-scale banana production otherwise they would walk away from the deal. If one island falls short, another can supply extra fruit to meet the gap. It takes a lot of co-ordination. We have to do whatever it takes to fill the order each week.
Marcella Harris, Windward Island Farmers Association

Is fair trade a way in which Nestlé can sanitize its image? Or is it serious? How do we know? Only 0.02 per cent of its production is fair trade. Our concern is that standards are becoming diluted, that consumers will become confused and fair trade has a tarnished image.
Claribel David, International Fair Trade Association, quoted in the New Internationalist, April, 2006

One challenge to mainstreaming Fair Trade is to keep the standards high. It is easy to go to Dhaka, find the most skilled workers, pay 30% more and call it a day. However, Fair Trade means going to the villages and working on capacity and organisation. With Fair Trade, business requires investment in the producers.
Safia Minney, Managing Director, People Tree, fair trade clothing company

Fairtrade is not enough

Despite consumers increasingly choosing to buy fair trade products, there is only so much that can be achieved when global economic conditions are such that small farmers in developing countries continue to have a hard time accessing global markets.
Zarrin Caldwell, OneWorld US, The Fair Trade Movement: A Closer Look

We don't for one minute think the solution to all problems in world trade is Fairtrade. What we want to create is a situation where it is no longer acceptable to do nothing, where every company, and every individual, has to do something to make the world fairer.
Harriet Lamb, Executive Director, Fairtrade Foundation

It is unsurprising that Marks & Spencer, Sainsbury's, Asda and Top Shop are all jumping on the Fairtrade bandwagon. While this represents a positive shift, as consumer demand forces corporations to supply ethically sourced goods, a token Fairtrade range simply demonstrates how unethical other products are... We need a committed stance on the ethical sourcing of all products.
Keith Taylor, Principal Speaker, Green Party, in a letter to the Guardian, Tuesday, March 7, 2006

Instead of the orthodox free-market model, where the returns earned by the primary producer are kept low and the profits are reaped by those higher in the value chain, the fair-trade model guarantees producers a premium above the world market price, as well as stable returns and good working conditions. A reconfiguration of trade according to this positive model would address the chronic problem of plunging commodity prices and declining terms of trade for the poorest countries and communities."
John Hilary, War on Want quoted in "A People's World, published by Zed Books

Date published: May 2006


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