Fair trade certification

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Certification logo of Fairtrade International Fairtrade-logo.jpg
Certification logo of Fairtrade International

A fair trade certification is a product certification within the market-based movement of fair trade. The most widely used fair trade certification is FLO International's, the International Fairtrade Certification Mark, used in Europe, Africa, Asia, Australia and New Zealand. Fair Trade Certified Mark is the North American equivalent of the International Fairtrade Certification Mark. As of January 2011, there were more than 1,000 companies certified by FLO International's certification and a further 1,000 or so certified by other ethical and fairtrade certification schemes around the world. [1]

Contents

The Fairtrade International certification system covers a wide range of products, including banana, coffee, cocoa, cotton, cane sugar, flowers and plants, honey, dried fruit, fruit juices, herbs, spices, tea, nuts and vegetables. [2]

How it works

Fair trade is a strategy for poverty alleviation and sustainable development. It aims to create greater equity in the international trading system. It creates social and economic opportunities through trading partnerships with marginalised farmers and craftspeople in developing countries so that more customers are accessible to their products and they receive a favorable deal. [3] In return, the producers must comply with the standards set by the certifying authority.

Packers in developed countries pay a fee to the Fairtrade organisation for the right to use the Fairtrade certification logo. Importers of Fairtrade certified products must pay exporters a price higher than the market price for non-Fairtrade certified products to cover additional costs borne by Fairtrade certified firms in marketing and inspection. Any surplus after paying these costs must be used for local[ clarification needed ] social, environmental, and economic projects. [4]

Fairtrade standards

A T-shirt made from Fairtrade certified cotton FairtradeCertifiedCottonTShirt.jpg
A T-shirt made from Fairtrade certified cotton

Fairtrade develops private standards that aid the sustainable development of some smaller producers and agricultural workers in third world countries. In order to become certified Fairtrade producers, the cooperatives and their farmers have to comply with private standards set by Fairtrade International. [5] FLO-CERT inspects and certifies producer organizations in more than 70 countries in Europe, Asia, Africa, and Latin America.

The standards set for different stakeholders are as follows:

Small producer organizations

Hired labour

Trade standards

Fairtrade pricing

The Fairtrade system consists of two types of pricing: the Minimum Price and the Premium. These are paid to the exporters according to the proportion of output companies are able to sell with the brand 'Fairtrade Certified', typically ranging from 17% to 60% of their turnover.

How fairtrade measures its impact

The Fairtrade system committed to a programme of Monitoring, Evaluation and Learning (MEL), which aims at generating recommendations and analysis in support of greater effectiveness and impact. Ongoing market progress[ clarification needed ] is monitored by market-facing organizations present in countries where Fairtrade certified products are sold; market data is consolidated by Fairtrade International on an annual basis. These data form a basis for understanding the dynamics of how certification is developing, and how the impacts of Fairtrade are being distributed between producer organizations, geographies and products. [10]

Fairtrade's governance bodies also review key results and evaluate regularly in order to improve strategy and decision-making. These results are publicised within the Fairtrade system and among relevant stakeholders for further discussion of findings and recommendations.

Criticisms

Little money reaches the farmers

The Fairtrade Foundation does not monitor how much of the premium paid to exporters reaches farmers. As the cooperatives incur heavy fees on inspection, certification and marketing, only a small amount of money is retained for the farmers. [11] In general, Fairtrade producers are only able to sell 18% to 37% of their output as Fairtrade certified while the rest is sold as uncertified at market prices.

Fairtrade helps the rich to a larger extent

Fair Trade is profitable for traders in rich countries rather than those in poor countries. In order to qualify as Fairtrade producers, cooperatives must meet the strict standards set by certifiers which implies that their constituent farmers must be quite skillful and educated. However, these farmers are predominantly from the poorest countries and lack the leverage to bargain with the cooperatives. Corruption even occurs in some cases. [12]

Inefficient marketing system

Fairtrade certified products sold through a monopsonist cooperative may be inefficient and prone to corruption. Fairtrade farmers should have the right to choose the buyer who offers the best price, or switch when their cooperatives are going bankrupt. [13] A monopsonist cooperative in charge of Fairtrade certification may try to grow the fair trade industry for profit and not so much for the lives of the small farmers. At this point[ may be outdated as of March 2022 ] they are trying to increase the supply of fair trade when the supply is already far beyond the demand. [14]

Not fit for purpose

Concerns around Fairtrade certification were raised by the Institute for Multi-Stakeholder Initiative Integrity, with conclusions from their "Not Fit for Purpose" report that private sector led multi-stakeholder initiatives adopt weak or narrow standards that better serve corporate interests than rights holder interests. [15] Fairtrade responded to explain private standards are no substitute for public regulation. [16]

Other certification and product labelings

Related Research Articles

<span class="mw-page-title-main">Fair trade</span> Sustainable and equitable trade

Fair trade is a term for an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and environmental standards. The movement focuses in particular on commodities, or products that are typically exported from developing countries to developed countries but is also used in domestic markets, most notably for handicrafts, coffee, cocoa, wine, sugar, fruit, flowers and gold.

<span class="mw-page-title-main">Fairtrade International</span> Group promoting a living income for farmers

Fairtrade International, or Fairtrade Labelling Organizations International E.V. is a product-oriented multistakeholder group aimed at promoting the lives of farmers and workers through trade. Fairtrade's work is guided by a global strategy focused on ensuring that all farmers earn a living income, and agricultural workers earn a living wage. Fairtrade works with farmers and workers of more than 300 commodities. The main products promoted under the Fairtrade label are coffee, cocoa, banana, flowers, tea, and sugar.

<span class="mw-page-title-main">The Fairtrade Foundation</span> Charity promoting and licensing Fairtrade certification in the United Kingdom

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.

<span class="mw-page-title-main">Rainforest Alliance</span> International sustainable agriculture organization

The Rainforest Alliance is an international non-governmental organization (NGO) with staff in more than 20 countries and operations in more than 70 countries. It was founded in 1987 by Daniel Katz, an American environmental activist, who serves as the chair of the board of directors. The NGO states that its mission is "to create a more sustainable world by using social and market forces to protect nature and improve the lives of farmers and forest communities." Its work includes the provision of an environmental certification for sustainability in agriculture. In parallel to its certification program, the Rainforest Alliance develops and implements long-term conservation and community development programs in a number of critically important tropical landscapes where commodity production threatens ecosystem health and the well-being of rural communities.

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.

<span class="mw-page-title-main">International Fairtrade Certification Mark</span> Certification mark

The 'International Fairtrede Certification Mark is an independent certification mark used in over 69 countries. It appears on products as an independent guarantee that a product has been produced according to Fairtrade political standards.

<span class="mw-page-title-main">Fair Trade USA</span>

Fair Trade USA, formerly "TransFair USA", is a 501(c)(3) non-profit organization that sets standards, certifies, and labels products that promote sustainable livelihoods for farmers and workers and protect the environment.

<span class="mw-page-title-main">Fairtrade Canada</span> National non-profit certification and public education organization

Fairtrade Canada, formerly TransFair Canada, is a national non-profit certification and public education organization promoting Fairtrade certified products in Canada to improve the livelihood of developing world farmers and workers. It is the Canadian member of FLO International, which unites 24 fair trade producer and certification initiatives across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand.

<span class="mw-page-title-main">Stichting Max Havelaar</span> Dutch member of Fairtrade International

Fairtrade Nederland formerly known as Max Havelaar StichtingArchived 2022-08-16 at the Wayback Machine is the Dutch member of Fairtrade International, which unites 23 Fairtrade certification producer and labelling initiatives across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand.

The fair trade movement has undergone several important changes like the operation for ten thousand villages to open their businesses since early days following World War II. Fair trade, first seen as a form of charity advocated by religious organizations, has radically changed in structure, philosophy and approach. The past fifty years have witnessed massive changes in the diversity of fair trade proponents, the products traded and their distribution networks.

The fair trade debate concerns the ethics and economic implications of fair trade, a term for an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The benefits of fair trade for farmers and workers can vary considerably and the social transformation impacts also vary around the world. However the main concerns from critics is that fair trade may give an unfair advantage to some producers over others.

<span class="mw-page-title-main">UTZ Certified</span> Program for sustainable farming, now merged with the Rainforest Alliance

UTZ, formerly called UTZ Certified, is a program and a label for sustainable farming. The organization was founded as a non-profit in the Netherlands in 2002. The UTZ label is featured on more than 10,000 product packages in over 116 countries. In 2014, UTZ was reported to be the largest program for sustainable farming of coffee and cocoa in the world. The UTZ program addresses agricultural practices, social and living conditions, farm management, and the environment. In January 2018, UTZ officially merged with the Rainforest Alliance in response to the increasing challenges of deforestation, climate change, systemic poverty, and social inequity.

<span class="mw-page-title-main">Max Havelaar-Stiftung (Schweiz)</span>

The Max Havelaar Foundation is a non-profit certification and public education organization promoting Fairtrade products in Switzerland to improve the livelihood of developing world farmers and workers. The Max Havelaar Foundation is the Swiss member of FLO International, which unites 23 Fairtrade producer and labelling initiatives across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand. Several of these corresponding organizations in other European countries also use the Max Havelaar name. The Swiss Max Havelaar organization was founded in 1992 by the Third World aid organisations Brot für alle, Caritas, Fastenopfer, HEKS, Helvetas and Swissaid.

<span class="mw-page-title-main">Fair trade coffee</span> Coffee certified as produced to fair trade standards

Fair trade coffee is coffee that is certified as having been produced to fair trade standards by fair trade organizations, which create trading partnerships that are based on dialogue, transparency and respect, with the goal of achieving greater equity in international trade. These partnerships contribute to sustainable development by offering better trading conditions to coffee bean farmers. Fair trade organizations support producers and sustainable environmental farming practices and prohibit child labor or forced labor.

Direct trade is a form of sourcing practiced by certain coffee roasters, chocolate makers, tea sellers, gemologists and more who build direct relationships with the farmers, artisanal miners and processors who sell their products. There is no single set of direct trade standards, and specific trade practices vary as a reflection of business and ethical priorities of the roaster or maker. Generally speaking, however, direct trade practitioners view their model as one of mutually-beneficial and transparent trade relationships.

<span class="mw-page-title-main">Union of Indigenous Communities of the Isthmus Region</span>

The Union of Indigenous Communities of the Isthmus Region is a farmer's cooperative in the state of Oaxaca, Mexico. It was established in 1982 to assist in production, marketing and distribution of locally produced coffee and other products. UCIRI was a pioneer of organic coffee production and one of the first fair trade suppliers.

Sustainability standards and certifications are voluntary guidelines used by producers, manufacturers, traders, retailers, and service providers to demonstrate their commitment to good environmental, social, ethical, and food safety practices. There are over 400 such standards across the world.

<span class="mw-page-title-main">Fair trade cocoa</span> Cocoa harvested under a certified process

Fair trade cocoa is an agricultural product harvested from a cocoa tree using a certified process which is followed by cocoa farmers, buyers, and chocolate manufacturers, and is designed to create sustainable incomes for farmers and their families. Companies that use fair trade certified cocoa to create products can advertise that they are contributing to social, economic, and environmental sustainability in agriculture.

Fairtrade bananas was a marketing initiative which focused on increasing the price paid to small banana growers and the wages of agricultural workers. This is not a commercial brand, but a marketing strategy. Fair trade is based on higher prices paid by consumers that allow an equitable distribution of gains from trade over the chain partners.

The Federación Campesina del Cauca is a non-profit, member-owned federation of coffee grower associations based in the Cauca Department of Colombia. It was found in 1971 as a congress of farmers, but has since formalized into a cooperative serving the interests of 630 coffee farmers from six local sub-groups. The federation was licensed FLO Cert in 2004, and has since acquired certification for producing both conventional and organic coffee.

References

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  2. Elliot, K. (2012). "Is my Fair Trade coffee really fair? Trends and Challenges in Fair Trade certification." Center for Global Development, Policy Paper, pp. 17.
  3. Fairtradefederation.org, (2014). Fair Trade Federation: What is Fair Trade?. (Accessed 19 Oct. 2014).
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  6. "Fairtrade Standard for Small Producer Organizations" (2005). Bonn, Germany: Fairtrade International, pp. 7.
  7. Strong Producers, Strong Future (2014). Bonn, Germany: Fairtrade International, pp. 8.
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  9. "Fairtrade Minimum Price And Fairtrade Premium Table." (2014). Bonn, Germany: Fairtrade International, pp. 3.
  10. Fairtrade.org.uk, (2014). How Fairtrade monitors and measures impact (Accessed 24 Oct. 2014)
  11. The Globe and Mail, (2014). "Fairtrade coffee fails to help the poor, British report finds." (Accessed 27 Oct. 2014)
  12. Sylla, N. (2014). "Fairtrade is an unjust movement that serves the rich" The Guardian (Accessed 26 Oct. 2014)
  13. Mendoza, R., & J. Bastiaensen, J. (2003). "Fair Trade and the Coffee Crisis in the Nicaraguan Segovias." Small Enterprise Development, 14(2), pp. 42
  14. Cole, Nicki Lisa; Brown, Keith (2014). "The Problem with Fair Trade Coffee". Contexts. 13: 50–55. doi: 10.1177/1536504214522009 . S2CID   62222709.
  15. Not Fit-for-Purpose The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance. San Francisco: Institute for Multi-Stakeholder Initiative Integrity: MSI Integrity. July 2020.
  16. "Fit for purpose?". Fairtrade International. 2020. Archived from the original on 2021-05-11.
  17. Conroy, Michael (2007). Branded! p. 252
  18. "Counter Culture Coffee website". Counter Culture Coffee. 22 March 2022. Retrieved 30 October 2023.
  19. Alyce Lomax (2 April 2007). "Fair's Fair at Whole Foods". The Motley Fool. Accessed 29 October 2023.