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Why doesnt Fairtrade certify large coffee plantations?

Around 70% of the world’s coffee farmers are small-scale growers, and they face particular disadvantages in the market place. Fairtrade’s mission is to make trade work for marginalised or disadvantaged producers, and therefore there is a global agreement that the system should offer champion purchase of sustainable coffee from organisations of small coffee farmers explicitly. Read our fairtrade_and_coffee_plantations (22.25KB) (PDF) to find out more.

Why doesnt the FAIRTRADE Mark apply to UK farmers?

The FAIRTRADE Mark was established specifically to support the most disadvantaged producers in the world by using trade as a tool for sustainable development. We do recognise that many farmers in the UK face similar issues as farmers elsewhere, not least ensuring that they get a decent return for upholding social and environmental standards in their production. However there are also some major differences. For example, farmers in developing countries often have little infrastructural support, social security systems or other safety nets available if they cannot get a fair price for their products. Our Fairtrade standards, and our expertise, are specifically focused on enabling producers in developing countries tackle poverty through trade. If the Foundation diverted its own attention from this mission, this could potentially end up diluting the benefits of Fairtrade for the very farmers and workers we were established to support. We agree that the principles behind fair trade may provide useful insight into the debate on improving the situation for UK producers. However, the Foundation is not convinced, that a labelling scheme is the right solution to the problems affecting UK farmers. A plethora of similar sounding labelling initiatives could result in confusion for consumers and undermine both the local cause and the global situation we care so deeply about. Rather than yet another label, the Foundation believes a more rigorous investigation by government and the industry itself is needed. This should look into the causes behind the problems being experienced by domestic producers, so that more robust and wide reaching policy tools can be identified – to benefit all affected farmers, and to reassure all concerned shoppers.

Why isnt the Fairtrade price calculated as a percentage of the retail price?

We are often asked how much farmers receive from the retail price of a product sold on Fairtrade terms compared to the same product sold on conventional terms. While this type of comparison may appear to be a simple way to demonstrate the impact of Fairtrade from the consumer’s perspective, it doesn’t actually address the real inequities in typical conventional market arrangements. For producers, the value of Fairtrade is not about the relationship of their selling price to that of the finished product, but to their costs of production and the conventional market price. There are also many complex and variable factors to take into account in comparing different elements of the final price paid by consumers which can be misleading. For example, the price received by a cocoa or coffee producer selling to the conventional market depends on many factors including: - fluctuating international market prices - the producer ‘cut’ from a chocolate bar will vary according to the international price of cocoa at the time of sale and the percentage cocoa content of the bar - whether the producer is an independent smallholder or a plantation worker - whether the smallholder/co-operative/plantation carries out processing or other value-added operations - whether a smallholder sells directly to a local buyer or is a member of a co-operative - whether the co-operative sells to local traders or to auction, or exports the product on behalf of its members - local trading conditions – these can vary greatly within a country let alone within different continents e.g. whether the industry has been liberalised or is state-regulated - the varying costs of production from country to country. Once the primary product is sold to a certified Fairtrade importer, the costs are similar to those for a conventional product – transport and export costs; shipping and insurance; import licences and taxes; ripening or processing; packing; warehousing and distribution; marketing and promotion and; retailer overheads. The Fairtrade Foundation has no control or influence over commercial costs or margins. And because the major costs of the finished product are incurred after the producer has sold the commodity, the return to the producer will inevitably make up a relatively small percentage of the retail price.

Why do some products claim to be fair trade but do not carry the FAIRTRADE Mark?

Some organisations, also called Alternative Trading Organisations (ATOs), are purely dedicated to trading fairly and have been doing so for many years before Fairtrade certification was established. You can find these organisations listed at WFTO or BAFTS. It can take a long time to agree new international Fairtrade standards, and for many of the products these organisations sell, there may not yet be standards available for their products.   However some other companies make their own ‘fair trade’ claims without having the independent scrutiny of the FAIRTRADE Mark, or being part of a recognised network such as WFTO. You need to ask what these claims are based upon. If you want to be sure that farmers and workers are receiving the better deal offered by Fairtrade, always look for the FAIRTRADE Mark.

Who is responsible for setting Fairtrade standards?

All Fairtrade standards, including minimum prices and premiums are set by the Standards Unit at Fairtrade International and the minimum prices and premiums for each product are included in the product-specific standards available on their website. The process for agreeing international Fairtrade standards follows the ISEAL Code of Good Practice for Social and Environmental Labelling, where stakeholders (including producers, traders, NGOs) participate in the research and consultation process and final decision making.

Why are some Fairtrade prices set worldwide and others set for countries or regions?

There are worldwide prices for some products such as nuts, cocoa and juices, but most products have country-specific or regional prices. This is because production costs vary greatly around the world and prices for new products and origins have been set on a case-by-case basis. As the demand for new prices grows, the Fairtrade International Standards Unit is increasingly using regional rather than country-specific prices. This means new prices cover as many farmers/workers as possible and avoid the need for new research into pricing for the same product every time a new producer group is identified in a new country. If production costs vary significantly in a region a consensus is reached between the farmers/workers and other stakeholders, in order to set a price that is acceptable for the whole region.

Why arent handicrafts Fairtrade certified?

Fairtrade certification and pricing were designed for commodity products. It is hard to adapt the Fairtrade model of standardised minimum pricing to crafts and other products made by small-scale artisans, which are unique, made of varied materials and have highly varied production processes and costs. However, Fairtrade International is working with WFTO to explore whether we could certify these products in the future.

Can buying Fairtrade products help to tackle climate change?

Farmers/workers must meet environmental standards as part of certification. Producers are required to work to protect the natural environment and make environmental protection a part of farm management. They are also encouraged to minimise the use of energy, especially from non-renewable sources. By choosing Fairtrade, shoppers in the UK are ensuring that farmers and workers receive a Fairtrade premium to invest in economic, social and environmental products of their own choice. It means they can implement a range of environmental protection programmes which contribute to the range of solutions needed to address climate change and ultimately benefit us all.  To give two examples, tea workers in India have invested some of their Fairtrade Premium into replacing the traditional wood-burning heating with a solar-panelled system. Coffee farmers in Costa Rica have used the premium to replant trees to prevent soil erosion and have invested in environmentally friendly ovens, fuelled by recycled coffee hulls and the dried shells of macadamia nuts. This means that they no longer need to cut forest trees and so can preserve the rainforest and the oxygen they produce. By choosing Fairtrade products, you can help farmers and workers preserve their own environment and allow them to have a positive social benefit in their community. Climate change hits the poorest in developing countries hardest. This includes people whose livelihoods depend on agriculture. Through the Fairtrade Premium farmers and workers have a little extra to use when harvests fail, or if they need to change to growing a different crop if the climate becomes unsuitable for the way they currently farm.   You can read more about Fairtrade and climate change in our Why the climate revolution must be a fair revolution here.

Can I put the FAIRTRADE Mark on my website or promotional materials?

If your company or organisation is selling or expressly promoting Fairtrade certified products you can put the FAIRTRADE Mark on your website and promotional materials in accordance with our guidelines in our Promotional Materials Manual. Find out more about using the FAIRTRADE Mark here.

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