The Fairtrade Foundation

Last updated

The Fairtrade Foundation
Company type Charitable organisation
Founded1992;32 years ago (1992)
Headquarters London, E1
United Kingdom
Key people
Mike Gidney (Chief Executive)
Website www.fairtrade.org.uk

The Fairtrade Foundation is a charity based in the United Kingdom that aims to help disadvantaged producers in developing countries by tackling injustice in conventional trade, in particular by promoting and licensing the Fairtrade Mark, a guarantee that products retailed in the UK have been produced in accordance with internationally agreed Fairtrade standards. The foundation is the British member of FLO International, which unites FLO-CERT, 25 National Fairtrade Organisations and 3 Producer Networks across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand.

Contents

The organisation is an independent non-profit organisation that licenses use of the Fairtrade Mark on products in the UK in accordance with internationally agreed Fairtrade standards.

Areas of activity

Its four key areas of activity include:

How it works

The marketing system for Fairtrade and non-Fairtrade products is identical in the consuming countries, using mostly the same importing, packing, distributing and retailing firms. Some independent brands operate a virtual company, paying importers, packers and distributors and advertising agencies to handle their brand, for cost reasons. [2] In the producing country Fairtrade is marketed only by Fairtrade certified cooperatives, however if there is not enough market demand, those products are sold onto the conventional market at market prices, marketed by Fairtrade certified cooperatives (as uncertified), by other cooperatives and by ordinary traders. [3]

This mode of operation has led to criticism of the foundation. [4] It is argued that, because retailers and cafes in the rich countries can sell Fairtrade coffee at any price they like, nearly all the extra price paid by consumers, 82% to 99%, is kept in the rich countries as increased profit. There is evidence that dishonest importers do not pay the full Fairtrade price, so an even smaller proportion reaches the Third World. [5] Fairtrade operates a system whereby such allegations are reported to FLOCert for investigation.

Cooperative traders and exporters can only sell produce on Fairtrade terms if they meet the set of standards set by Fairtrade International that demand minimum requirements to criteria such as pricing and terms of trade. Farmers pay FLOCERT a certification and inspection fee. Other administration costs and production costs are incurred to meet these standards. Commodity prices can drop when the world market is oversupplied. A minimum price, which is paid to producers, acts as a safety net for farmers at times when world markets fall below a sustainable level. An additional sum of money, called the Fairtrade Premium, is paid to farmers for products sold on Fairtrade terms. Some cooperatives can sell only a third of their output as Fairtrade, because of lack of market demand, and sell the rest at world prices. [6] As the additional costs are incurred on all production, not just that sold as Fairtrade, cooperatives sometimes lose money on their Fairtrade membership. [7] After the certification fees have been subtracted from the overall income earned on Fairtrade terms, the rest goes into a communal fund for workers and farmers to use as decided democratically within the farmers' organisation, or by a workers' committee on a plantation. The additional sum (Fairtrade Premium) is invested in ‘social projects’ such as clinics, women's groups and baseball pitches.

Critics therefore argue that farmers do not get any of the higher price under Fairtrade. [8] Nor is there any evidence that they get higher prices as a result of better marketing: the cooperatives sometimes pay farmers a higher price than farmers do, sometimes less, but there is no evidence on which is more common. [9] Farmers do, however, incur extra costs in producing Fairtrade, so they certainly do lose money from Fairtrade membership in some cases. There is little or no research on the extra costs incurred, or the effect of Fairtrade membership on the income of farmers. However, research by Overseas Development Institute found that a "wide variety of qualitative studies have found positive effects of Fairtrade certification on the incomes of producers". [10]

Other economists have argued that the existence of a fair trade marketing route benefits producers by raising producer prices generally, [11] and there is evidence of such an effect at least among coffee producers; [12] [13] according to Podhorsky, the critics of the Fairtrade Foundation err by assuming that fair trade producers receive the world price for coffee, when that is in general not so.

To become certified Fairtrade producers, the primary cooperative and its member farmers must operate to certain Fairtrade standards, set by the organisation. [14] FLO-CERT, the for-profit side, handles producer certification, inspecting and certifying producer organisations in more than 50 countries in Africa, Asia, and Latin America. [15] In the Fair trade debate there are many complaints of failure to enforce these standards, with Fairtrade cooperatives, importers and packers profiting by evading them. [16]

The foundation was established in 1992 by CAFOD, Christian Aid, New Consumer, Oxfam, Traidcraft and the World Development Movement. These organisations were later joined by the Women's Institute, Britain's largest women's organisation, and other organisations including Banana Link, Methodist Relief and Development Fund, Nicaragua Solidarity Campaign, People & Planet, SCIAF, Shared Interest Foundation, Soroptimist International, Tearfund and the United Reformed Church. [17]

Promotion

The Fairtrade Foundation organises and coordinates promotional campaigns and events every year, such as the Fairtrade Fortnight (typically in February/March). The foundation also coordinates the Fairtrade Town campaign, which designates areas and towns committed to the promotion of Fairtrade certified goods.

The Fairtrade Foundation's current campaign aims to highlight the goal of achieving living incomes for cocoa farmers in West Africa.

Public reception

Since The Co-operative Food became the first supermarket to sell a Fairtrade product (Cafedirect coffee) in 1992, both the range and total sales of Fairtrade certified products in UK supermarkets has grown extensively. [18] [19] In 2013, there were over 4000 Fairtrade products available in the UK with estimated sales of over £1.7bn. [20]

In 2014, Fairtrade certified sales in the United Kingdom amounted to an estimated retail value of £1.68 billion, up from £273 million in 2006. [21] Volumes of Fairtrade banana sales grew by 3% in 2014, generating an estimated £7.9 million of Fairtrade premium. [22] One in three bananas bought in the United Kingdom carries the Fairtrade label. [23] Fairtrade sales of coffee, which remains Fairtrade's best known product, rose 9% generating an estimated £5 million of Fairtrade premium in 2014. [24]

It was estimated in 2014 that approximately 77% of British adults could identify the Fairtrade Certification Mark, [20] [25] up from 25% in 2003, 39% in 2004, 50% in 2005 and 57% in 2007. [26] In 2008, an estimated two in three UK households regularly bought at least one Fairtrade-labelled product. [27]

Where it takes place

AfricaAsiaAustralasiaCaribbeanCentral AmericaSouth America
TanzaniaIndiaPapua New GuineaSaint LuciaCosta RicaColombia
UgandaSri LankaDominican RepublicNicaraguaBolivia
MalawiVietnamMexicoPeru
GhanaGuatemalaArgentina
EthiopiaBelizeParaguay
KenyaHonduras
Côte d'Ivoire
South Africa

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FLOCERT is one of the world’s leading social auditing and verification bodies and the global certifier for Fairtrade. With a vision of combating poverty and securing sustainable livelihoods for farmers in developing countries, FLOCERT's focus lies on auditing global supply chains and guaranteeing compliance with Fairtrade Standards.

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References

  1. ↑ "Who we are | Fairtrade Foundation". www.fairtrade.org.uk. Retrieved 2016-10-13.
  2. ↑ Davies, I.A. and A Crane, ‘Ethical Decision Making in Fair Trade Companies’, Journal of Business Ethics 45: 79–92, 2003. P84
  3. ↑ Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.; Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.; Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.; Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems.; Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October.
  4. ↑ Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011(DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at "Why Fair Trade isn". Archived from the original on 2013-09-25. Retrieved 2013-12-08., J., Haaparanta, P., & Niemi, N. (2010). “Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers.” Journal of Business Ethics, 97:257-270. Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research, 59(3), 322–330.Mendoza, R., & J. Bastiaensen, J. (2003). “Fair Trade and the Coffee Crisis in the Nicaraguan Segovias.” Small Enterprise Development, 14(2), 36–46.
  5. ↑ Raynolds, L. T. (2009). Mainstreaming Fair Trade Coffee: from Partnership to Traceability. World Development, 37 (6) 1083-1093, p. 1089; Valkila, J., Haaparanta, P., & Niemi, N. (2010). Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers. Journal of Business Ethics, 97:257-270 p. 264, Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics, 68 3018-3025, pp. 3022-3; Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics, 86:3-26, p. 12; Barrientos, S., Conroy, M. E., & Jones, E. (2007). Northern Social Movements and Fair Trade. In L. Raynolds, D. D. Murray, & J. Wilkinson, Fair Trade: The Challenges of Transforming Globalization (pp. 51–62). London and New York: Routledge. Quoted by Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics, 86:3-26, p. 21.;de Janvry, A., McIntosh, C., & Sadoulet, E. (2010). Fair Trade and Free Entry: The Dissipation of Producer Benefits in a Disequilibrium Market. Retrieved December 24, 2012, from http://are.berkeley.edu/~alain/workingpapers.html.
  6. ↑ Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.; Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.; Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.; Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October; Renard, M. C. and V. P. Grovas (2007), ‘Fair Trade coffee in Mexico: at the center of the debates’, ch. 9 in D. Murray, L. Raynolds and J. Wilkinson (eds), Fair Trade: The Challenges of Transforming Globalisation, London: Routledge. Pp 38-9; Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems; Bacon, C. (2005), ‘Confronting the coffee crisis: can Fair Trade, organic and speciality coffee reduce small-scale farmer vulnerability in northern Nicaragua?’, World Development, 33(3): 497–511; Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.
  7. ↑ Weber, J. (2006). Rationing in the Fair Trade Coffee Market: Who enters and How? International colloquium on fair trade and sustainable development. Montreal: Ecole des Sciences de la Gestion, Universite du Quebec.; de Janvry, A., McIntosh, C., & Sadoulet, E. (2010). Fair Trade and Free Entry:The Dissipation of Producer Benefits in a Disequilibrium Market. Retrieved December 24, 2012, from "Archived copy". Archived from the original on 2013-12-15. Retrieved 2013-12-08.{{cite web}}: CS1 maint: archived copy as title (link), C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.
  8. ↑ Fairtrade International (FLO). (2011). Explanatory Document for the Fairtrade Standard for Small Producer Organizations. Retrieved 1 15, 2013, from "Archived copy" (PDF). Archived from the original (PDF) on 2013-05-02. Retrieved 2013-02-06.{{cite web}}: CS1 maint: archived copy as title (link); Fairtrade International (FLO). (2011). Fairtrade Standard for Coffee for Small Producer Organizations version: 01.04.2011. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-01_EN_SPO_Coffee.pdf; Fairtrade International. (2011). Explanatory Document for the Fairtrade Trade Standard. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2011-12-29_Explan_Doc_GTS_EN.pdf Archived 2013-05-02 at the Wayback Machine ; Fairtrade Labelling Organizations International e.V. (2011). Fairtrade Standard for Small Producer Organizations, version: 01.05.2011_v1.1. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-07-11_SPO_EN.pdf; Fairtrade Labelling Organizations International e.V. (2011). Generic Fairtrade Trade Standard. Retrieved 1 15, 2013, from "Archived copy" (PDF). Archived from the original (PDF) on 2013-05-02. Retrieved 2013-01-15.{{cite web}}: CS1 maint: archived copy as title (link)
  9. ↑ Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011(DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm
  10. ↑ Darko, Emily; Lynch, Alainna; Smith, William (31 August 2017). "The impact of Fairtrade: a review of research evidence 2009–2015". Overseas Development Institute. Retrieved 8 July 2019.
  11. ↑ Podhorsky, A. (2015). A positive analysis of Fairtrade certification. Journal of Development Economics, 116, 169-185. doi:10.1016/j.jdeveco.2015.03.008
  12. ↑ Imhoff, S., Lee, A., 2007. Assessing the potential of Fair Trade for poverty reduction and conflict prevention: a case study of Bolivian coffee producers. Working Paper. Europainstitut, University of Basel.
  13. ↑ Ruben, R., Fort, R., Zuniga-Arias, G., 2009. Measuring the impact of fair trade on development. Dev. Pract. 19, 777–788.
  14. ↑ "Fairtrade International (FLO): Our standards". www.fairtrade.net. Retrieved 2017-01-04.
  15. ↑ FLO-CERT (2008). FLO-CERT Archived 2009-09-18 at the Wayback Machine . URL accessed on August 1, 2008.
  16. ↑ Raynolds, L. T.: 2009, ‘Mainstreaming Fair Trade Coffee: from Partnership to Traceability’, World Development, 37 (6) p1089.; Valkila, J., Haaparanta, P., & Niemi, N.: 2010, ‘Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers’, Journal of Business Ethics, 97, p264.; Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3018-3025.; Utting, K.: 2009, ‘Assessing the impact of Fair Trade Coffee: Towards an Integrative Framework’, Journal of Business Ethics, 86, p139.; Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3022-3023.; Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, pp 12, 21.; Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs. (e.g. p67); Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October. Jacquiau, C. ( 2006 ). Les Coulisees du Commerce Équitable. Paris: Mille et Une Nuits.; Jacquiau, C. (2007). Max Havelaar ou les ambiguïtés du commerce équitable: Pourquoi le Sud rue dans les brancards. Monde Diplomatique September.; Hamel, I.: 2006, ‘Fairtrade Firm Accused of Foul Play’, Swiss Info http://www.swissinfo.ch/eng/Fair_trade_firm_accused_of_foul_play.html?cid=5351232 23/12/2009.; Weitzman, H. (2006, August 9). ‘Fair’ coffee workers paid below minimum wage. Financial Times .; Weitzman, H. (2006, September 9). ‘'Ethical-coffee’ workers paid below legal minimum. Financial Times .; Weitzman, H.: 2006, The bitter cost of ‘Fair Trade’ coffee. Financial Times, September 8.; Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, p12.; Moore, G., Gibbon, J., & Slack, R.: 2006, ‘The mainstreaming of Fair Trade: a macromarketing perspective’, Journal of Strategic Marketing, 14, 329-352.
  17. ↑ "The Fairtrade Foundation". Fairtrade Foundation . Archived from the original on August 31, 2008. Retrieved September 3, 2023.
  18. ↑ T: +44 (0)20 7405 5942; F: +44 (0)20 7977 0101; mail@fairtrade.org.uk, E. "Cooperative commitment to Fairtrade remains strong". www.fairtrade.org.uk. Retrieved 2019-08-27.{{cite web}}: CS1 maint: numeric names: authors list (link)
  19. ↑ "Ethical trading". www.coop.co.uk. Retrieved 2019-08-27.
  20. 1 2 T: +44 (0)20 7405 5942; F: +44 (0)20 7977 0101; mail@fairtrade.org.uk, E. "FAIRTRADE SALES HOLD STEADY DESPITE SUPERMARKET PRICE WARS". www.fairtrade.org.uk. Retrieved 2019-08-27.{{cite web}}: CS1 maint: numeric names: authors list (link)
  21. ↑ "Annual report for the year ended 31 December 2014" (PDF).
  22. ↑ "Annual report for the year ended 31 December 2014" (PDF).
  23. ↑ "Buying Fairtrade bananas | Fairtrade Foundation". www.fairtrade.org.uk. Retrieved 2016-10-13.
  24. ↑ "Annual report for the year ended 31 December 2014" (PDF).
  25. ↑ Just-food (2008). [UK: Awareness of fairtrade symbol rises to 70% http://www.just-food.com/article.aspx?id=102331]
  26. ↑ House of Commons International Development Committee (June 5, 2007) Fair Trade and Development. URL accessed on June 20, 2007.
  27. ↑ Sunday Mirror . URL accessed on February 24, 2008.
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