One and half million farmers and workers round the world are benefiting from increased sales of Fairtrade products, according to a new report . Latest figures show producers received an estimated €105 million in Fairtrade Premium to invest in business and social projects – a 14 percent increase on the year before.
The Fairtrade International report for 2014-15 – “Global Change, Local Leadership” – highlights the benefits enjoyed by 1.5 million Fairtrade producers in 74 countries. The report points to the introduction of new ways of sourcing Fairtrade gold and increased sales of established products such as cotton and cocoa as the main factors behind the global success story.
“When Fairtrade burst onto farmers’ fields and shop shelves 25 years ago, it was bold. Today we still nurture that innovative energy to ensure that Fairtrade is responding to the ever-growing challenges that small-scale farmers and workers face,” says Harriet Lamb, Chief Executive of Fairtrade International.
In 2014, consumers spent €5.9bn on products carrying the FAIRTRADE Mark, driving increased incomes for Fairtrade producers and consequently reducing their vulnerability. 2014 saw significant increases in retail sales volumes in key product categories; cotton (28%), cocoa (24%) with the Fairtrade Sourcing Programs driving almost half of the increase in volume sold, and gold (259%) largely due to a revised model enabling goldsmiths to purchase more Fairtrade gold.
According to Fairtrade’s recent satisfaction survey, 93 percent of Fairtrade producers are happy with the support services they receive. This supports findings by the independent certification body, FLOCERT, which reported that producers scored Fairtrade an average of 9 out of 10 indicating positive impact for small-scale producers and workers.
The satisfaction survey also highlighted producers’ need for increased support in accessing markets for their products. One way to address this is by building opportunities for producers to sell their Fairtrade products in local markets. In 2015, Brazil became the fourth producer country to launch a Fairtrade Marketing Organization and consumers there can now purchase home-grown Fairtrade coffee and honey.
“Global Change, Local Leadership” also reports that Fairtrade has helped connect small producer organizations with the services they need to strengthen their businesses. In 2014, the Fairtrade Access Fund loaned €11.1m to small producer organizations. To ensure that this increased access to finance drives impact, Fairtrade supported cooperatives with mentoring and training on financial management.
Cooperatives are also encouraged to drive their own initiatives. Kibinge Coffee Cooperative has invested part of their Fairtrade Premium in to developing a credit union so farmers based in this remote area of Uganda can take out loans. “Now the farmers have access to financial services on their doorstep, they can open accounts and get credit facilities,” says David Lukwata, general manager of Kibinge Coffee Cooperative. “They can save money with us and get a loan – for personal or business use.”
Conditions for many of the world’s farmers remain challenging, however. “The problems faced by poor farmers and workers result from centuries of marginalization and exploitation,” says Harriet Lamb. “Fairtrade can help narrow the gap between rich and poor, and to change a global food system that exploits both people and planet, but there are no quick-fix solutions. Real change will only happen when the voices of smallholder farmers and workers are heard – and acted upon – at the highest levels of government and commerce.”
Fairtrade continues to improve conditions for workers, collaborating with trade unions, other certifiers, companies and governments to achieve a living wage for workers on plantations. Alongside this work, Fairtrade International is driving forward in new focus areas – they have recruited a Senior Advisor for Gender to implement a strategy for achieving gender equality in Fairtrade organizations. Later this year, the Fairtrade Climate Standard will be launched; enabling farming communities to access the carbon market and receive become more resilient to the effects of climate change.
- A 2014 literature review in the ‘Journal of Economic Perspectives’ concluded that Fairtrade farmers receive higher prices on average and have greater access to credit, leading to an increase in their financial stability.
- In 2014, small-scale producer organizations spent almost half their Fairtrade Premium on strengthening their organizations.
- Fairtrade products are available in more than 125 countries.
- Fairtrade has recently revised their Generic Trade Standard (now called the Trader Standard). One of the key changes producers will benefit from is the requirement for buyers to either offer or facilitate pre-financing for the producer organizations they source from.