Fairtrade’s revised standard is ‘creative’ says industry

By Joyeeta Basu contact

- Last updated on GMT

Long-term contracts between traders and producers would be a major step forward, said a representative at Divine Chocolate
Long-term contracts between traders and producers would be a major step forward, said a representative at Divine Chocolate

Related tags: Finance, Fair trade

The inclusion of new voluntary best practices in the organisation’s revised trader standard is an “interesting” element, said a representative at Voice Network.

The first full revision of Fairtrade International’s trader standard since 2009 was a result of a consultation process with 400 stakeholders, including more than 100 producers, over 170 traders and input from workshops held in six countries, it said.

Key changes included more clarity on which operator type each requirement applied to; the inclusion of ‘Voluntary Best Practices’ in addition to its core requirements; and a compliance with labour rights and environmental protection laws.

Voice Network (an association of European NGOs and trade unions) managing director Antonie Fountain said the addition of the voluntary practises was an interesting element in what was otherwise a “standard revision with marginal differences​”.

The voluntary conditions mainly related to support for producers in terms of capacity building, financial support and improved market-access information.  In addition, it also covered “sourcing plans throughout the supply chain, long-term commitment, tripartite contracts, and reducing environmental impact​”, said the report.

Fountain said it was a good step forward as “by recommending without requiring anyone to follow it, it had looked creatively at what a standard can or can’t do​”, he said.

It was also “good news​” that it was striving to stimulate long-term relationships between traders and producers.  “The idea of traders trying to engage in longer term contracts with farmers is necessary as farmers tend to be vulnerable,​” he said.

Managing director of Divine Chocolate (a Fairtrade chocolate company that is 45% owned by cocoa farmers) Sophi Tranchell agreed it would be "a major step forward​", if traders had to commit to long-term contracts. "[It would allow] producer organisations to plan ahead and manage cash flow, and thereby build their businesses.​” 

Access to pre-finance and sourcing plans - that remained a part of the core elements of the standard - was also a step in the right direction as it had put the onus of offering financial help to farmers, on traders said Fountain. “A lot of farmers in the commodity supply change need to invest to improve productivity and they can’t do that unless they have access to credit and finance. To put it as a responsibility to traders is a good step forward.

“So farmers don’t really need to ask for it, traders needs to offer it​,” he said.

The issue of poverty

Though the core requirements remained focused on fairer trading relations -- including transparent contracts, proper payment of Fairtrade premiums and minimum prices -- it still has not tackled the problem of poverty, said Fountain.

Most farmers within cocoa industries in Ghana and the Ivory Coast as well as those in other industries are still living in poverty even though they have been certified by the foundation. Fairtrade needs to look at the issue and how it can make a real difference to them.​”

In response to the comment that Fairtrade did not do enough to reduce poverty, a statement from the organisation said that independent research had shown otherwise. Research in Uganda had found that “household living standards for Fairtrade coffee farmers had risen by 30%​”, while a separate research in Colombia had found that “smallholder banana farmers ​had increased their household income by 34% on average under Fairtrade​”.

"There is still a long way to go to make all trade fair globally as only about 1% of sugar and 1.2% of cocoa was sold on Fairtrade terms, and less than 10% of tea. To make a greater impact for farmers and workers, we need to enable producers to sell more of their produce on Fairtrade terms,” ​it said.

The organisation also referred to the Fairtrade Sourcing Programs that was rolled out last year which allows companies to bulk buy a single commodity as Fairtrade, thereby increasing the scope of more farmers to be involved in Fairtrade. Previously, companies had to source all ingredients for a brand on Fairtrade terms.

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