What is Fairtrade?

Fairtrade was set up in the 1980s by development agencies e.g. Oxfam, who recognised the important role that consumers could play to improve the situation of poor producers in developing countries who have difficulty accessing markets in developed countries and who tend to be marginalised by conventional trading structures.

By definition, "Fairtrade is an alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising anf by campaigning."

What this means for the Producer

Many farmers in developing countries have to contend with fluctuating prices that may not even cover the costs to produce their crop. Fairtrade involves buying from farmers at guaranteed prices, which cover production costs, helps them to strengthen their business, and allows them to market their produce directly to the consumers. Typically Fairtrade focuses on small-scale producers, although this depends on the particular commodity. For example, Fairtrade coffee producers are generally small, family-owned farms working through co-operatives for marketing and export, while tea more usually originates from estates where employment practices, environmental management and worker participation structures meet international Fairtrade standards.

In addition to the guaranteed price paid to farmers, a separate payment is made to the co-operatives which is designated for social and economic development in the communities. The farmers and co-operatives themselves decide how these funds are to be spent. It is generally used for improvements in health, education or other social facilities. However, as many small producers find it difficult to obtain finance and often have to pay very high interest rates, the premium may also be used for certain development projects to enable growers to improve productivity, to make their products available for export or reduce their reliance on single commodities. Fairtrade also encourages importers to place orders well in advance so that producers can plan their business with some security.

Furthermore, most coffee is bought through the world commodity markets, which means that the buyer and seller never meet, that buyers do not know who the growers are, how much they receive for their beans, or what conditions the producers work in. By bypassing these commodity markets and buying direct from farmers or co-operatives, Fairtrade ensures the growers are more personally involvment with all aspects of their business and receive the financial and intrinsic rewards for their labour.

Fairtrade producers must also be able to demonstrate that they can meet market requirements for quality, consistency and continuity of supply as well as the capacity to process orders for export. The focus on these issues goes some way to answer the concern that the Fairtrade movement values social issues more than the quality of the tea and coffee. Furthermore, with extensive tastings showing that Fairtrade coffee and tea are equitable in quality and character to a comparable range of conventionally traded coffee and tea, and given that the brokers and roasters have their own quality control procedures, the quality of Fairtrade coffee, tea and hot chocolate is now beyond question.

Fairtrade Growth

Fairtrade is no longer a niche phenomenon, but is now a mainstream trading movement. A recent MORI survey shows that the Fairtrade mark is now recognised by half of the UK population, and that its appeal has broadened with the Fairtrade Mark now reaching younger and more diverse audiences. The highest recognition is now among the 25-34 age group, showing that people in this group are now just as likely as older age groups to buy Fairtrade products regularly.

Harriet Lamb, Director of the Fairtrade Foundation, says "[Fairtrade] growth holds great promise for the future...it shows that we are widening the appeal of Fairtrade and enabling more and more new consumers to join this growing trend. Consumers clearly place great value on the Mark's independent guarantee that producers receive a better deal. Our Mark gives people the confidence to put these products in their shopping baskets knowing they are playing their part in creating a fairer world and helping to 'Make Poverty History'. Companies should take note that the public are more canny and caring than they are often given credit for. Price is emphatically not their only concern when they go shopping - they do want the reassurance that farmers in developing countries receive a better deal."

Environmental Impact

The Fairtrade movement works hard to ensure that farmers use eco-friendly farming practices, which means that you get products that are responsibly grown and healthy for you and the environment. Specifically, Fairtrade movement helps in the following four ways;

Bio Diversity

By keeping traditional small scale coffee, tea and cocoa farmers in business, the Fairtrade movement helps maintain diverse forested eco-systems - one of the most threatened environments in the world. Farmers who participate in the Fairtrade movement implement additional soil and water conservation measures such as composting, terracing and reforestation.

Shade Grown

Most Fairtrade coffee and cocoa is shade grown. Growing crops under the shade of the natural forest canopy preserves crucial habitats for a diverse array of plants, animals, insects and migratory birds.

Sustainability

The Fairtrade movement encourages farmers to use sustainable post-harvest processing. For example, many co-operatives compost coffee pulp rather than dumping it into local waterways and some co-ops have environmentally friendly processing mills that greatly reduce natural resource use.

Organic

Although many farmers can not afford the cost of official organic registration most coffee, tea and cocoa farmers use organic practices, something which the Fairtrade movement actively encourages. Such farmers use integrated pest management systems, which emphasize non-chemical methods of production.

 
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