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Fair Trade—A Continuous Journey
05/29/2014 - 10:32 AM

Learnings from SOAS, and a call to action for all


Over 2 billion people live on less than $2 a day, and 65% of them work in agriculture. The challenge at hand is great.

As we strive to create a more equitable system of trade and grow the market for sustainably-sourced products, Fair Trade USA places great value on all those working to learn more about the impacts of trade, poverty, and certification in rural agricultural communities. Academic and origin-based research is critical to our model of continuous improvement. To this end, we thank SOAS for their new report “Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda”, which points out that more work must be done to ensure the benefits of Fair Trade go deeper and reach more people. We couldn’t agree more.

Though the report does not assess the long-term, multi-faceted impact of Fair Trade, there are valuable lessons to be learned. Most notably, how do we ensure that Fair Trade reaches not just smallholder farmers and farm workers on estates (for whom there are Fair Trade standards), but also a historically invisible population of hired laborers who do not always fall within the scope of certification? How do we ensure that the most marginalized individuals in the most challenging regions are able to earn better wages and build sustainable livelihoods over time?

Fair Trade Has Real Impact

At the same time, we are disheartened to see how some findings within the report have been generalized and sensationalized in the media. There are also some methodological inconsistencies, for example, the use of evidence from an estate that is no longer part of Fair Trade. This has unfortunately created an unfair indictment of Fair Trade in its entirety. There is always room for improvement, but to discredit the decades of positive impact created through Fair Trade across the globe does a tremendous disservice to all those who worked to build it—particularly farmers and workers.

Fair Trade has a long and proven track record of enabling sustainable livelihoods, supporting environmental best practices, and building strong supply chains, and there is a growing body of research and information to support it. For example:

  • A 2013 study in Uganda by Gottingen University found that “Fairtrade certification increases household living standards by 30% and significantly reduces the prevalence and depth of poverty.”
  • Another study from the International Cocoa Organization found that Fair Trade certification delivered more money into the hands of farmers than other models of trade, specifically in Ghana and the Ivory Coast.  

Fair Trade producers have also seen direct benefit from the Fair Trade Minimum Price (which acts as a safety net when the market is too low), Community Development Premiums, democratic participation, and access to finance and higher prices based on quality.

  • In the first half of 2013, when the coffee market dropped to historic lows, Fair Trade producers earned an average of $0.84-$0.89 per pound above the New York market price.
  • Since 1998, farmers and workers across categories have earned over $153 million in Fair Trade Premiums, with the last 2 years alone representing half of these gains.

Opportunities Ahead

We’re proud of this work, but also recognize that there are still billions in agriculture struggling under the crushing hand of poverty. For this reason, we recently developed the first standards to include farm workers employed on coffee estates, a vulnerable population that has been left out of the sustainability conversation to date. We've also developed standards for independent smallholders, that do have wage requirements for any hired laborers. As pointed out by SOAS, wage workers and migrant laborers on small to medium sized farms, certified or not, are a group that must be focused on, especially in some of the most challenging and impoverished regions on the planet (like Uganda and Ethiopia).

This is actually one of the reasons we’re now reevaluating and strengthening our standards and audit processes to ensure that all kinds of farmers and workers are included in Fair Trade. We've also developed a new Impact Management System, to begin collecting real time data at the farm and system wide level around all elements of Fair Trade—including individual farmer income. And we’re using new technologies to get there, including mobile platforms that revolutionize the way we collect, assess, and share impact information on a large scale. 

Working Together for Tangible Change

Fair Trade is a continuous journey, not an overnight solution that can be solved by any one group alone. At the end of the day, we hope this new dialogue serves as a wakeup call to everyone, including businesses and consumers. We know that today coffee producers vote to use around 50% of their Premiums to improve quality and attract buyers. But they aren't always being rewarded. We still face a downward pressure as people demand cheaper goods, the weight of which falls on the backs of the most vulnerable. Until we are willing to place more value on the people who work so hard to grow our food, increasing prices and wages for the poorest of the poor will be nearly impossible. If we want to see farming communities not only survive, but thrive, we all need to play an active, collaborative role in getting there.