Click on one of the questions below to see the answers to some of the most frequently asked questions about Fairtrade
- How does Fairtrade work?
- What Fairtrade Products can you buy?
- What is a Fairtrade Town?
- Why are Fairtrade Products more expensive than their non-Fairtrade equivalents?
- Do you have to be a ‘Town’ to win Fairtrade Status?
- Is the Foundation the only Supporter of Fairtrade?
- Is it mostly Food Products that are available via Fairtrade?
- Is there a case for extending Fairtrade system beyond the Third World?
- By interfering with the Market, Fairtrade may do more harm than good. In particular, it encourages farmers to grow more (especially coffee) and contribute to global over-supply and low prices.
- How can the consumer be sure that the premium paid on Fairtrade produce actually goes to the grower?
In 1994 a joint initiative by CAFOD, Christian Aid, Oxfam, Traidcraft and others set up the Fairtrade Foundation in the UK (later joined by the WI). Other countries in Europe have their own similar organizations. It does not produce or market anything itself. It lays down conditions of fairness between small farmers who are growing the raw product and the businesses that are buying them. Companies sourcing products from the Third World who comply with the Foundation’s conditions are awarded the Fairtrade Mark for that product.
These standards stipulate that a trader must:
- Pay a fair price to the primary producer that covers the costs of sustainable production and living.
- Pay a premium that producers can invest in development – the social premium.
- Make partial advance payments when reasonable requests are made by producers
- Sign decent-length contracts so that farmers can rely on the income and make longer-term plans.
This is not a charity. In return, the farmer has to:
- Produce high quality crop
- In amounts stipulated
- At the right time
- In environmentally sustainable way.
The additional and more reliable income doesn’t just provide a better standard of living for the farmers but enables them to invest in improving their farm or smallholding. People with confidence in the future are more likely to treat the environment sensitively and develop better farming and business practices.
The Foundation audits its accredited products regularly to ensure that they continue to meet the standards.
There are an estimated 1 million farmers directly in Fairtrade. In addition, millions more people benefit indirectly from investment of the social premium in their communities.
The first Fairtrade product to hit the selves in 1994 was Green & Black Maya Gold Chocolate, to be followed by Clipper Fairtrade tea and Café Direct coffee. Since then the market has diversified into a wide range of tropical products including bananas, mangoes, sugar, rice & fruit juices, as well as a much wider range of teas and coffees to suit all tastes.
Some established household names have now started producing Fairtrade lines, and some of the big supermarkets now have their own brands.
Fairtrade is now branching out into other lines:
- Shoppers can now buy Fairtrade wines from South African and South America.
- Cut flowers are now available in leading supermarkets.
- Textiles esp. cotton are a key issue but a difficult one to crack because of the complications of the supply chain, but a start is being made. Fairtrade cotton goods have been available from specialist retailers for a number of years, but recently Marks & Spencer announced that it was marketing a range of Fairtrade cotton tee shirts in its High Street stores.
- Metals & precious stones. We have a local interest here. Greg Valerio, the owner of Cred the Jewellers in South Street is playing a leading role in the attempt to create a Fairtrade mark for precious metals and stones.
In March 2007 sales of Fairtrade products in the UK reached £300m, and 15% of the roast and ground coffee sold in Britain now comes under the Fairtrade label. Over 3,000 Fairtrade products are currently available in UK.
A Fairtrade Town is a community which has made a commitment to support Fairtrade in their local area as a practical means of enabling producers from poor countries to receive a better deal. To become a Fairtrade Town, the community has to fulfil 5 conditions set down by the Fairtrade Foundation.
- The local council must adopt a resolution supporting Fairtrade and agree to serve Fairtrade tea and coffee in its offices and canteens.
- A range of at least 2 Fairtrade products must be readily available in a proportion of the local shops, cafes and restaurants, so that people can find them easily as they do their everyday shopping. The Fairtrade Foundation suggests a target percentage of qualifying retail outlets per head of population.
- Fairtrade products must be used in a percentage of local businesses and community organizations. Again, there is a target percentage.
- A campaign must be run to attract media coverage and popular support for the scheme. There is no point in having Fairtrade products available if no one buys them.
- A Steering Committee must be set up to ensure that the conditions which won the town Fairtrade status in the first place continue to be met and to organize educational and promotional activities such as the Fairtrade Fortnight, held each year in March.
Chichester achieved Fairtrade City status in November 2006. Other Fairtrade towns on the South Coast include Arundel (in August 2004 they were the first Sussex town to achieve this), Southampton, Portsmouth and Brighton. Portsmouth University is a Fairtrade University. Both Portsmouth Dioceses (Church of England & Roman Catholic) have recently achieved Fairtrade Diocese status). Chichester University is working towards Fairtrade University status.
The low prices in the shops for some brands of tea, coffee, chocolate, bananas etc have been achieved at the expense of the living standards of the farmers who grow the products. Fairtrade lines will always be more expensive than the cheapest brands because of the fair price paid to the grower and the social premium.
However, it is also true that in the past some Fairtrade products have been more expensive than they need be. This was because the marketing firms and the retailers tended to put an enhanced mark-up on Fairtrade products, confident that they were appealing to a ‘niche’ market, which would bear the extra cost. This is similar to the situation with Organic produce. In some cases, the commercial mark-up accounted for 75% of the price difference with equivalent non-Fairtrade goods. As more people buy Fairtrade, however, and more products appear within each commodity range, then competition will drive the mark-up down. This is already happening with products like coffee, tea and bananas. The gap will never disappear entirely, because the primary producers are being paid more, but it will narrow as Fairtrade becomes more popular.
We should also be aware that Fairtrade goods make up only a small part of our weekly shopping basket. While for some people price always has to be the most important consideration, many of us could afford to pay a little extra on just a few products without breaking the household budget.
You don’t have to be a ‘town’ to qualify. A group of villages or urban neighbourhoods can get together to become a ‘Fairtrade Zone’, if that is more appropriate. There are also ‘Fairtrade’ islands, dioceses, universities and schools.
Some businesses have developed their own systems for giving primary producers a fairer deal. You will come across these under slogans like ‘sustainable development’ or ‘commitment to origins’. The Body Shop has traditionally taken great care over how its products are sourced and produced, and the Lush chain is now doing the same. In Chichester Montezuma’s Chocolates have their own ethical standards.
Many of these schemes are excellent. But the Fairtrade Foundation’s system is by far the largest, and when you buy goods carrying their logo, you can be sure of the commitment to the primary producer. With others, unless you go and research for yourself, you cannot automatically be sure.
Also Fairtrade certification is not borne by producers but by the licensee of the mark, who passes it on to the consumer or absorbs it in reduced profits. This allows the economically marginalised to get involved without upfront capital, which can be a problem with other ethically driven schemes.
On the other hand, there are many commodities not yet covered by the Fairtrade mark – for example, cosmetics and personal care products. If you care about buying Fairtrade, then it is better to buy these from outlets with a commitment statement than one without.
Fairtrade started with foodstuffs and these still make up the bulk of Fairtrade lines in the shops. But there are many other products that are grown or manufactured in the Developing World, where the terms of trade between rich and poor countries are very unequal. These include cotton clothing, rubber and precious metals and stones. These are much more difficult to crack because of the more complicated supply line. A cotton tee shirt, for example, does not just depend on the farmer who grows the cotton but also on the working conditions in the factories that make the garment up.
But work is being done in all sorts of areas to bring more products under the Fairtrade umbrella. The film’ Blood Diamond’ has drawn attention to
human and environmental issues surrounding the sourcing of gold and precious stones, and a campaign is currently under way to bring a Fairtrade mark to high-value commodities. For more information look up Cred Jewellers on the 'Local Links' page
There is a case to be made that small farmers in the West, who sell to large multiples, suffer many of the same problems as their counterparts in the Third World, and this issue has been carefully considered by the Fairtrade Foundation. In 2003 there was even a proposal market Fairtrade organic food grown in UK. However, it was decided in the end that such a move would dilute the Fairtrade message by confusing the absolute poverty’ of Third World farmers with the ‘relative’ poverty suffered by some farmers in the West, where there are health and social security systems to fall back on. It was also argued that better-educated and more politically informed Western producers were better placed to band together and protect themselves.
As with most economic issues, there is no simple answer to this but the overall answer is ‘no:
- Fairtrade fits into the free market. There is no government control or interference. No one is forced to do anything. It starts with a voluntary agreement between farmers and wholesalers to pay a fair price that will ensure farmers’ livelihoods. It finishes with the consumer, who chooses to buy a Fairtrade product rather than its non-Fairtrade equivalent. In this respect it is no different from choices that consumers make all the time, when they choose one brand over another because they prefer, the taste, presentation, convenience or whatever. Only with Fairtrade, the choice is based on an ethical preference.
- This might encourage Fairtrade farmers to grow more, but the evidence seems to indicate that oversupply, especially of coffee, is caused mainly by government subsidies and export policies, and, paradoxically by the desperation of very small farmers outside the Fairtrade system. As the price falls, desperate growers will try to make up for the drop in income by increasing output, often at the expense of quality and the environment.
- Evidence indicates that Fairtrade growers, whose livelihood is more certain, are less inclined to overproduce but are bolder and more innovative. They may invest in improving the quality of their crops, develop specialised markets and even diversify to reduce their dependency on one commodity.
Fairtrade is not a perfect system. No economic or trading system is. But is provides one of the best means for many farmers to work their way out of poverty into a dignified living.
People who give to charity are often worried that most of what they give does not go to the intended recipient but ends up in the pockets of corrupt officials and politicians. Fairtrade has the great advantage of dealing directly with the grower, thus ensuring that the premium has a good chance of ending up where it is intended. In many areas small farmers have set up local co-operatives to negotiate with the buyers and to distribute the proceeds in the interests of the community. The recently-released film ‘Black Gold, shows this happening in a Fairtrade coffee co-operative in Ethiopia, where the farmers meet together and decide to spend the latest premium on education in the local villages.
It is not going to work perfectly all the time but there is ample evidence that Fairtrade has been of enormous benefit to many Third World communities.
And do remember. It is not a charity. It gives small farmers the opportunity to earn a dignified living and support their families by their own efforts.