by Barbara Crowther, Director of Policy and Communications, Fairtrade Foundation
To launch the start of Fairtrade Fortnight, BBC breakfast interviewed Dalibor Rohac of the Legatum Institute who made a number of claims about why he thinks fair trade does not work. Here’s what he claimed, and what I would have said, if I’d had the chance!
“Fairtrade locks poor people into agriculture, producing the same crops”
Fairtrade works with many small farmers whose families have produced the same crops for generations. If you are struggling to survive, it can also be hard to access the knowledge or investment resources to diversify into doing something else. Fairtrade supports farmers’ organisations to invest in their own priorities for the future – in many cases farmers are investing in education for their children, so they can have more choices than they have had themselves. In some cases farmers have used premiums to establish revolving loan schemes, credit unions and diversification projects, such as the Indian cashew or Sri Lankan tea growers who now also produce and sell rubber and spices, the Caribbean banana farmers who now own their own fruit processing plant or the Paraguayan Fairtrade sugar producers who have invested in building their own mill.
“Fairtrade is not effective, as only 5% of the price of a product we buy trickles back to farmers in developing countries”
Dalibor’s fact could be applied to any traded products. There are many factors which affect the percentage of the final price that reaches a farmer (whether a UK farmer or a farmer in a developing country), and it varies hugely from one type of product to another. We believe what matters most is whether the price paid to the farmers is fair in comparison to the costs of production, and contributing to a better sustainable livelihood. Fairtrade aims to increase the actual value received by farmers organisations from the sale of their products, which is why every Fairtrade product sold earns an additional premium, over and above the market or Fairtrade minimum price.
“Fairtrade doesn’t make people better off, but forces them into less efficient farming”
Quite the contrary. Developing country farmers are highly entrepreneurial when given the opportunity. What really keeps them farming ‘less efficiently’ is a lack of access to finance and knowledge. These are exactly the problems where Fairtrade can play a role. In Mali, for example, organic cotton farmers have improved the quality of their cotton production and are earning up to 80% more selling on organic Fairtrade terms than they can get on the mainstream market. In Belize, sugar growers have upgraded their harvesting and loading processes and improved the sugar yield from their cane by 30%. In Kenya, Ndumberi used Fairtrade premiums to hire an agronomist and have increased yields per tree from as little as 1kg to 12kg They have also increased their production of premium grade coffee from 45% to 75%.
“Fairtrade doesn’t target the poorest, the majority of beneficiaries are in countries like Mexico.”
Simply untrue. Of the 63 countries where Fairtrade is present, the largest numbers of smallholders in the Fairtrade system are in Tanzania, Kenya, Ethiopia and Ghana. In recent years, Fairtrade has worked to expand its operations in some of the poorest countries of the world including Afghanistan, Cote d’Ivoire, Malawi or Democratic Republic of Congo. However, according to the Institute for Development Studies, three quarters of the world’s poorest people live in middle income countries. There are more people living on less than $2 per day in India than in the whole of sub-Saharan Africa, and so it is right that Fairtrade should also work there, with both small farmers and workers on plantations.
“Farmers must pay $2-4,000 to get certified, so only the richer ones can afford to join.”
All certification programmes cost money, as it requires professional people to go and check that rules are being followed. The figures quoted are not for one farmer, but would be typical for a cooperative of anything from 50-100 farmers (at the lower end) to more than 1000 farmers (at the upper end). Fairtrade operates a Producer Certification Fund, which offers up to 75% of the cost of the certification fee, and often trading partners or development NGOs work with poorer organisations to help them achieve certification. You can find out more about certification at http://www.flo-cert.net/flo-cert/33.html
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