As I sat bleary-eyed in the staff restaurant at CABI drinking a morning cup of coffee today, was I simply having a shot of caffeine to keep me going after an early start. Or, as it was Fairtrade coffee I was drinking, was I making a real contribution to improved livelihoods of small farmers in some of the poorest parts of the world?
It is currently ‘Fairtrade Fortnight’ in the UK, when campaigners try to raise consumer awareness of Fairtrade goods and highlight their claimed benefits in helping producers in developing countries get a fairer price for their goods and improve their standard of living. The message seems to be getting through in the UK, where consumers have recently overtaken the Swiss to become the world’s biggest Fairtrade consumers. Compared with the overall size of the UK grocery market the proportion of Fairtrade goods is still tiny, but the value is increasing rapidly each year – from £195 million in 2005 to around £300 million last year. The largest market is in Fairtrade coffee, followed by bananas (for a breakdown of major products and sales trends over the last few years, click this link). Britain’s second largest food retailer, Sainsbury, recently announced plans to switch all it’s banana sales to Fairtrade, as has the supermarket chain Waitrose. The battle by supermarkets to show their ethical credentials is highlighted in this article published last Sunday in the Observer newspaper.
But how does Fairtrade work, and does it really benefit poor farmers?
Producer organisations that produce Fairtrade goods are inspected and certified by Fairtrade Labelling Organisations International. They have to meet certain standards, and are guaranteed a price that covers the costs of sustainable production and living, plus a ‘premium’ that producers can invest in development. Just as importantly, traders must sign contracts that allow for long-term planning and sustainable production practices. In a world of highly volatile commodity prices, this guarantees a price to producers that may only give a small premium when commodity prices are high, but is much more important if the world market price crashes, as happened with coffee in 2001.
Fairtrade is not without its critics. In coffee, Fairtrade only rewards growers of high quality coffee, and making small coffee farmers in poor countries capable of meeting those standards requires a high outlay in terms of development aid spending on training and quality improvement. The market, although growing, is still limited, and an article in the Economist (see here for a link to a copy, and some responses to it) last year suggested that Fairtrade may make some non-fair-trade farmers poorer by encouraging more farmers to enter the market, thus increasing overproduction and depressing prices. But what Fairtrade does do is bring an awareness of issues surrounding the food trade to the attention of a growing number of consumers, and the move of supermarkets to stock more Fairtrade goods, and for multinationals like Nestle and Kraft (owner of coffee brands Kenco and Maxwell House) to respond by launching their own Fairtrade or ‘Sustainable Development’ brands is a response to this awareness that may in the long-term lead to much more coffee being bought at a price that may provide a living wage. So although Fairtrade is certainly not the answer to the problems of all small farmers, it at least is a start. And as Britain’s largest supermarket is fond of telling us in its advertising, ‘every little helps’.
CABI has a research programe in coffee that aims to help all producers by controlling major pests and diseases. See the CABI website for a research project on controlling coffee wilt disease in Africa, and for details of a number of publications on coffee and cocoa. Subscribers to the CAB Direct database can access references to over 200 articles on Fairtrade by conducting the search "fairtrade or fair trade or ethical trading" – combining this search with the word "coffee" finds 52 papers on coffee and Fairtrade. Two of the abstacts are given below.
Fair-trade coffee in Nicaragua and Tanzania: a comparison.
Pirotte, G. ; Pleyers, G. ; Poncelet, M. ;
Development in Practice, 2006, 16, 5, 441-451, 8 ref.
Fair-trade activities in the South have tended to be studied in relation to the internal aims of the fair-trade organizations themselves. This article argues that it is also critical to consider the wider fair-trade ‘arena’ or set of interactions. It focuses on fair-trade coffee in Tanzania and Nicaragua and studies the role of four key actors: small-scale producers, co-operatives, development partners, and public authorities. Using comparative data from field studies conducted in 2002-03, the article identifies key national and international issues affecting local producers. Illustrating how fair trade evolves differently according to context, the article examines how the co-operative movement in Nicaragua has been strengthened by fair-trade production, in contrast to the situation in Tanzania. It concludes by discussing some of the challenges faced by fair trade, including how to reconcile the demands of the market with building solidarity.
Confronting the coffee crisis: can fair trade, organic, and specialty coffees reduce small-scale farmer vulnerability in northern Nicaragua?
Bacon, C. ;
World Development (Oxford), 2005, 33, 3, 497-511, many ref.
This paper links changing global coffee markets to opportunities and vulnerabilities for sustaining small-scale farmer livelihoods in northern Nicaragua. Changing governance structures, corporate concentration, oversupply, interchangeable commodity grade beans, and low farm gate prices characterize the crisis in conventional coffee markets. In contrast, certified Fair Trade and organic are two alternative forms of specialty coffee trade and production that may offer opportunities for small-scale producers. A research team surveyed 228 farmers to measure the impact of sales on organic and Fair Trade markets. The results suggest that participation in organic and Fair Trade networks reduces farmers’ livelihood vulnerability.