Dear colleagues and campaigners,
You may well have seen some worrying headlines in recent days questioning the effectiveness of Fairtrade in tackling rural poverty. I’d like to reassure you that the Fairtrade movement you have helped to build is making a very tangible difference to 1.4 million poor farmers and workers in 70 countries across the world, their families and communities.1
It’s also important at this point to share the other side of the story that has been lost in the sensational headlines.
Where has the story come from?
The media stories follow the release of a research study titled ‘Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda’ by the School for African and Oriental Studies (SOAS), UK.2 The study focuses on wage workers (those who don’t own land but use wage labour in agricultural farms to earn a living) – their wages and working conditions and asks if Fairtrade makes a difference for them. The scope of the research was only in two countries – Ethiopia and Uganda and the study only looked at four Fairtrade certified organisations (one large flower plantation that was decertified during the study itself, one tea smallholder group and two coffee small farmer cooperatives) out of over 1,000 worldwide.
What is the Fairtrade Foundation’s response?
Fairtrade has an open policy to academic research and learning and over the last five years we have commissioned several studies that highlight both benefits and limitations of Fairtrade. We know that such research helps us improve our work, our focus and make sure Fairtrade delivers for marginalised rural communities where we work. In this spirit, we have welcomed the focus of the SOAS study on wage workers and the difficult questions it has asked. However, we strongly disagree with the generalised, sweeping conclusions criticising Fairtrade as a whole – in fact many statements that have made media headlines are not evidenced in the report.
Harriet Lamb, CEO of Fairtrade International has written this blog published in the Huffington Post which I would encourage you to read, and James Mwai, Director of Programmes at Fairtrade Africa (who you may remember from last year’s Supporter Conference) has written this letter to you.
As Harriet says, Fairtrade is a work in progress, committed to tackling injustice and poverty brought about by a deeply unfair international trading system. It is making a real difference towards this aim, as numerous academic studies have shown – including one from the University of Göttingen which found that in Uganda itself farmer incomes on Fairtrade certified farms had risen 30%,3 and another from the Natural Resources Institute in Africa, Asia and Latin America highlighting the particular benefits felt by women and children from Fairtrade premium investments.4
So, as said earlier, whilst the focus of this research is useful, and its findings sobering for all concerned with fighting poverty, we believe the critical headlines the report has received in the media are inaccurate and flawed. The limited scope of the study doesn’t allow for such broad brush and sweeping criticisms of Fairtrade as a whole. Partly because the study doesn’t actually seek to assess the impact of Fairtrade (SOAS themselves state this in their report) – the certification model or how the Fairtrade premium is used by producer organisations – in fact the word ‘Fairtrade’ didn’t appear in any of the questionnaires used by the research team to compile their results. But also, because the study looks at four producer organisations out of a possible 1000+ worldwide, in two countries out of a possible 70, and compares small family farms with large scale commercial plantations.
To read more, please see the Fairtrade Foundation’s response, and a more detailed Q&A on Fairtrade International’s site. A list of links to further research and evidence is at the bottom of the email for your interest and investigation
We welcome constructive debate about the approach Fairtrade takes in overcoming poverty through trade, and we welcome your input to it. Fairtrade will continue its work to tackle these highly complex and important structural issues of poverty. It is only with the collective action of each of us, and the wider movement for social justice, that we will make real progress towards a fairer and more just world.
As ever, don’t hesitate to get in touch with any questions or comments.
Some links and further reading
1 ‘Monitoring the Scope and benefits of Fairtrade preview’ Fairtrade International, 2014
‘In 2011-12, the period of SOAS research 54% of the Fairtrade Premium earned by Fairtrade plantations globally was directly invested in services for workers and their families (such as housing, education and loans) and a further 25% in services for the wider community (including water supply, healthcare and environmental services)’
2 Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda’ by the School for African and Oriental Studies (SOAS), 2014
3 Food standards, certification, and poverty amongst coffee farmers in Uganda, University of Göttingen, 2013
4 Assessing the poverty impact of sustainability standards, Natural Resources Institute, 2013
The Processes and Practices of Fair Trade: trust, ethics and governance, Dine, Granville and Telford, 2013
Studying wine production in South Africa, Granville and Telford (2013) survey 381 Fair Trade and conventional workers. They find that Fair Trade workers are more likely to make more than minimum wage and as a result they are also able to save more of their income. Consistent with this, when surveyed 91% of Fair Trade workers believed that Fair Trade (and their membership in the joint body) was responsible for improving in their living standards. In particular, 95% of workers reported that their joint body provided help with education and/or health (which 51% reported being helped with both).
The impact of Fairtrade, Evidence, shaping factors, and future pathways, Nelson & Martin, 2012
‘Evidence suggests that the non-income impacts of Fairtrade are at least as important as income benefits for smallholder farmers. Some studies find only small or non-existent income differentials (e.g. Jaffee, 2007) although many studies also point to other important types of impact (e.g. capacity building, stability of income, market information and access, self-confidence, access to credit, national representation etc.) as being important for tackling poverty.’
The Economics of Fairtrade, Journal of Economic Perspectives, 2013
Independent, peer reviewed article by Harvard economists points out limitations, but also concludes: ‘The existing empirical evidence, based primarily on conditional correlations, suggests that Fair Trade does achieve many of its intended goals. Studies generally find that Fair Trade farmers receive higher prices, have greater access to credit, perceive their economic environment as being more stable, and are more likely to engage in environmentally friendly farming practices. Fair Trade, if it is implemented successfully, holds the possibility of being a market-based tool that can improve the welfare of consumers, the lives of producers, and the local environment.’
Harriet Lamb interview for Al Jazeera, 26/5/2014