About Sugar

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Why smallholder cane farmers need support...

Around 80% of the world’s sugar is derived from sugar cane, grown by millions of small-scale farmers and plantation workers in developing countries. Sugar cane is a tall, bamboo-like grass that grows to a height of 20 feet in tropical countries. The remaining 20% of the world’s sugar supply comes from sugar beet – a root vegetable grown mainly in the temperate zones of the North. In general, the costs of producing sugar from sugar cane are lower than for sugar beet.

The global sugar industry is vast and complex and smallholder farmers who need to sell their cane sugar often struggle to influence this system. Traditionally, the international trade laws that govern sugar imports have made it difficult for smallholder farmers to access the more lucrative markets of North America and Europe. They are then forced to compete with more powerful, wealthy countries that have greater financial resources to dedicate to sugar production and greater political power to subsidize and promote their sugar industries. 

The price that smallholder farmers receive for sugar cane rarely covers the costs of production, leaving them in a debt trap and with little capital to reinvest in farms. This affects the entire community, as sugar cane farmers often rely heavily on their families for help, limiting people’s opportunities for education and perpetuating the cycle of poverty. This also means that cane producers do not receive the support they need to meet the challenges of new market conditions, including access to funding to invest in improving productivity (such as fertilizer and transport), agricultural training, and new and improved technology. 

How is Fairtrade making things better?

Fairtrade sugar was initially launched in Canada in 1998, in order to improve the position of small-scale sugar cane growers and their dependent communities, which were being undervalued by the global sugar market. Through Fairtrade certification, and by working in partnership with sugar cane processors, sugar cane farmers can get improved access to international markets and develop the necessary business skills and technical capacity to be more competitive in the global market. Currently, 100 sugar cane farmer organizations, representing 62,700 farmers, are Fairtrade Certified. These co-operatives are found mainly in Africa, and Central and South America, in countries such as Belize, Paraguay, Malawi and Zambia.

Compared to many other products, there is no Fairtrade Minimum Price for sugar. A stakeholder review of the sugar standards in 2009 highlighted the complexities of price setting in the sugar sector; which is characterized by structural differences in sugar supply chains, government-set prices and international trade regimes. The conclusion was that it would be more effective for sugar prices to be negotiated between producers and traders rather than through the minimum price mechanism. This means that the Fairtrade Premium is the main economic benefit for farmers who receive $60 per metric ton of sugar ($80 per metric ton for certified organic sugar) in addition to the negotiated price. In 2012-13, Fairtrade sugar producers received $14.7 million in Premium income of which 48% was invested in direct support to farming families. This included access to agricultural inputs, credit services, in-kind support and cash payments to help with living costs and needs. 

Fairtrade’s work with smallholder sugar farmers is having significant positive impact. Fairtrade sugar farmers in Malawi, for example, have used the Fairtrade Premium to benefit their community, through the building of schools, clean water facilities and by bringing electricity to villages. The premium has also provided household items and maize to farmers’ families.

In Belize, the impact has been transformational. Fairtrade Standards have ensured that the farmer’s association functions democratically and represents its 5,400 members. Investments of the premium in a Quality Improvement Program and integrated pest management have boosted production after 2011 by 30%, resulting in a 42% increase in the cane price received by farmers. Watch this video for a look at Fairtrade’s impact in Belize.

Fairtrade’s support goes beyond individual farmer stories. For cane farmers of the Manduvira cooperative in Paraguay, April 2014 was a milestone as they became the proud owners of a sugar mill ensuring that they are now able to capture more value from the sugar supply chains. This $15 million project was funded through a combination of national and international loans, contributions from the Fairtrade Premium, and the Fairtrade Access Fund.

What’s next?

Fairtrade sugar has seen remarkable growth in Canada and this impact is being felt by cane farming families. But a formidable challenge remains in the coming years with changes to international sugar trade laws. In 2017, legislative changes will make life harder still for smallholders in countries that export to Canada. These smallholders will, more than ever, need support from Fairtrade.

Many of the farmers we work with would like to sell more sugar on Fairtrade terms, and there are still millions more we haven’t reached. Today, less than 1% of the world’s cane sugar is Fairtrade. Meanwhile, more and more companies are making commitments to source their sugar sustainably. Let’s make sure consumers are responding by choosing Fairtrade sugar!