Fairtrade certification
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- Fairtrade (one word) redirects here. For the more general article on this approach to trade, see fair trade (two words).
Fairtrade certification (usually simply Fairtrade or Fair Trade Certified™ in the United States) is a product certification system designed to allow consumers to identify products which meet agreed environmental, labour and developmental standards. Overseen by a standard-setting body, FLO International, and a certification body, FLO-CERT, the system involves independent auditing of producers to ensure the agreed standards are met. Companies offering products that meet the Fairtrade standards may apply for licences to use the Fairtrade Certification Mark for those products.
The FLO International Fairtrade certification system covers a growing range of products, including bananas, honey, oranges, cocoa, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea and wine.
In 2005, Fairtrade-certified sales amounted to approximately €1.1 billion worldwide, a 37 % year-to-year increase.[1] Sales are further expected to grow significantly in the upcoming years: according to the 2005 Just-Food Global Market Review, Fairtrade sales should reach US$ 9 billion in 2012 and US$ 20-25 billion by 2020.[2]
As per October 2006, 586 producer organizations in 58 developing countries were FLO-CERT Fairtrade-certified.[3]
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[edit] History
Although many attempts to market Fairtrade products were observed in the 1960s and 1970s, Fairtrade sales only really took off with Fairtrade labelling in the late 1980s.
Fairtrade sales prior labelling initiatives were contained to relatively small world shops (also called charity shops), operated by alternative trading organizations (ATOs) such as Oxfam and Traidcraft. Many felt that these world shops were too disconnected from the rhythm and the lifestyle of contemporary developed societies. The inconvenience of going to them to buy only a product or two was too high even for the most dedicated customers. The only way to increase sale opportunities was to start offering Fairtrade products where consumers normally shop, in the large distribution channels. The problem was to find a way to expand distribution without compromising consumer trust in Fairtrade products and in their origins.
At the initiative of Mexican coffee farmers, the first Fairtrade labelling initiative, Stichting Max Havelaar, was launched in the Netherlands on November 15, 1988 by Nico Roozen, Frans van der Hoff and Dutch ecumenical development agency Solidaridad. The initiative offered disadvantaged coffee producers following various social and environmental standards as well as an above market price, for their crop. The coffee, originating from the UCIRI cooperative in Mexico, was imported by Dutch company Van Weely, roasted by Neuteboom, sold directly to worldshops and, for the first time, to mainstream retailers across the Netherlands.
The initiative was groundbreaking as for the first time Fairtrade coffee was being offered to a larger consumer segment. Fairtrade labelling also allowed consumers and distributors alike to track the origin of the goods to confirm that the products were really benefiting the farmers at the end of the supply chain.
The initiative was a great success and was replicated in several other markets: in the ensuing years, similar non-profit Fairtrade labelling organizations were set up in other European countries and North America, called “Max Havelaar” (in Belgium, Switzerland, Denmark, Norway and France), “Transfair” (in Germany, Austria, Luxemburg, Italy, the United States, Canada and Japan), or carrying a national name: “Fairtrade Mark” in the UK and Ireland, “Rättvisemärkt” in Sweden, and "Reilu Kauppa" in Finland.
| Retail Value Global Fairtrade Sales[4] |
||
|---|---|---|
| Year | Sales Value | |
|
|
||
| 2005 | € 1 141 570 191 | |
| 2004 | € 831 523 066 | |
| 2003 | € 554 766 710 | |
| 2002 | € 300 000 000 | |
| 2001 | € 248 000 000 | |
| 2000 | € 220 000 000 | |
Initially, the Max Havelaars and the Transfairs each had their own Fairtrade standards, product committees and monitoring systems. In 1994, a process of convergence among the labelling organizations – or “LIs” (for “Labelling Initiatives”) – started with the establishment of a TransMax working group, culminating in 1997 in the creation of Fairtrade Labelling Organizations International. FLO is an umbrella organization whose mission is to set the Fairtrade standards, support, inspect and certify disadvantaged producers and harmonize the Fairtrade message across the movement.
In 2002, FLO launched a new International Fairtrade Certification Mark, effectively replacing most previous Max Havelaar and TransFair certification marks. The goals of the launch were to improve the visibility of the Mark on supermarket shelves, facilitate cross border trade and simplify export procedures for both producers and exporters.
The Fairtrade Certification Mark harmonization process is still under way – today, all but three Labelling Initiatives (namely Transfair USA, TransFair Canada and Max Havelaar Switzerland) have adopted the new International Fairtrade Certification Mark. Full transition to the new Fairtrade Mark should become reality as it gradually replaces the old certification marks at various speeds in various countries. The appeal of the single guarantee-mark approach to major retailers has been most dramatically illustrated in the UK where 2006 saw sales of €450 million of labelled products, mainly through the dominant companies in the grocery retail sector.
In January 2004, Fairtrade Labelling Organizations International was divided into two independent organizations: FLO International, which sets Fairtrade standards and provides producer business support, and FLO-CERT, which inspects and certifies producer organizations. The aim of the split was to ensure the impartiality, the independence of the certification process and compliance with ISO 65 standards for product certification bodies.
At present, over 20 Labelling Initiatives are members of FLO International. There are now Fairtrade Certification Marks on dozens of different products, based on FLO’s certification for coffee, tea, rice, bananas, mangoes, cocoa, cotton, sugar, honey, fruit juices, nuts, fresh fruit, quinoa, herbs and spices, wine and footballs etc.
[edit] Fairtrade standards
Given the development focus of Fairtrade, FLO International standards contain minimum requirements that all producer organisations must meet to become certified as well as progress requirements in which producers must demonstrate improvements over time.
There are two types of Fairtrade standards for disadvantaged producers: standards for small farmers' organizations and for hired labour situations. Fairtrade standards for small farmers' organizations include requirements for democratic decision making, ensuring that producers have a say in how the Fairtrade Premiums are invested etc. They also include requirements for capacity building and economic strengthening of the organization.
Fairtrade standards for hired labour situations ensure that workers receive decent wages and enjoy the freedom to join unions and bargain collectively. Fairtrade-certified plantations must also ensure that there is no forced or child labour and that health and safety requirements are met. In a hired labour situation, Fairtrade standards require a “joint body” to be set up with representatives from both management and workers. This joint body decides on how Fairtrade premiums will be spent to benefit plantation workers.
For some products, such as coffee, only Fairtrade standards for small farmers' organizations are applicable. For others, such as tea, both small farmers' organizations and plantations can be certified.
Fairtrade standards and procedures are approved by the FLO International Standards Committee, an external committee comprising all FLO stakeholders (labelling initiatives, producers and traders) and external experts. Fairtrade standards are set by FLO International in accordance to the requirements of the ISEAL Code of Good Practice in standard setting and are in addition the result of a consultation process, involving a variety of stakeholders: producers, traders, external experts, inspectors, certification staff etc.[5]
[edit] Fairtrade inspection and certification
Fairtrade inspection and certification are carried by FLO-CERT, an independent body created by FLO in 2004. FLO-CERT ensures that both producers and traders comply with the FLO International Fairtrade Standards and that producers invest the benefits received through Fairtrade in their development.
FLO-CERT works with a network of 72 independent inspectors that regularly visit producer and trade organizations and report back to FLO-CERT. All certification decisions are then taken by a Certification Committee, comprised of stakeholders from producers, traders, national labelling organisations and external experts. An Appeals Committee handles all appeals.
FLO-CERT inspections and certification follow the international ISO standards for product certification bodies (ISO 65).
[edit] Fairtrade pricing
The Fairtrade system is distinct from other ethical trading schemes as it provides producers two major monetary benefits: the Fairtrade Minimum Price and the Fairtrade Premium.
- The Fairtrade Minimum Price is a guaranteed price that covers the cost of sustainable production. The set Fairtrade Price is always the minimum price paid but rises if market prices are higher.
- The Fairtrade Premium is a separate payment designated for social and economic development in the producing communities. The producers themselves decide how these funds are to be spent. As part of the Fairtrade criteria, registered producers are accountable to FLO-CERT for the use of this money. It is generally used for improvements in health, education or other social facilities, although it may also be used for certain development projects to enable growers to improve productivity or reduce their reliance on single commodities.
It is worth mentioning that the Fairtrade premium and the Fairtrade Minimum price do not always significantly increase the end price paid by consumers for a product. There are other factors to consider when considering the price structure of Fairtrade products: sometimes economies of scale are missing or often the products are differentiated due to their organic farming practices etc.[6]
[edit] Fairtrade impact studies
Several independent studies have recently measured the impact of FLO Fairtrade certification on disadvantaged farmers and workers.
In 2002, Loraine Ronchi of the Poverty Research Unit at the University of Sussex studied the impact of Fairtrade on the Coocafe cooperative in Costa Rica. Ronchi found that Fair Trade strengthened producer organizations and concluded that "in light of the coffee crisis of the early 1990s, Fair Trade can be said to have accomplished its goal of improving the returns to small producers and positively affecting their quality of life and the health of the organisations that represent them locally, nationally and beyond".[7]
In 2003, the Fair Trade Research Group at Colorado State University conducted seven case studies of Latin American Fairtrade coffee producers (UCIRI, CEPCO, Majomut, Las Colinas & El Sincuyo La Selva, Tzotzilotic and La Voz) and concluded that Fairtrade has "in a short time greatly improved the well-being of small-scale coffee farmers and their families"[8] The various case studies most notably found that producers had under Fairtrade greater access to credit and external development funding.[9] The studies also found that Fairtrade-certified producers had, compared to conventional coffee producers, greater access to training and enhanced ability to improve the quality of their coffee[10]. Families of Fairtrade-certified producers were also said to be more stable and children had better access to education than in families growing conventional coffee.[11]
A case study of Bolivian coffee Fair Trade producers published by Nicolas Eberhart for French NGO Agronomes et Vétérinaires sans frontières in 2005 concluded that Fairtrade certification has had in the Yungas a positive impact on local coffee prices, thus economically benefiting all coffee producers (Fairtrade-certified or not). Fairtrade was also said to have strengthened producer organizations and increased their political influence.[12]
An econometric analysis conducted by Becchetti and Costantino (2006) verified the impact of Fair Trade affiliation on monetary and non monetary measures of well-being on a sample of Kenyan farmers. The researchers compared a control sample group of farmers to Fair trade certified groups and Meru herbs farmers. Becchetti and Costantino documented the following: during the same period, Fair trade farmers were more successful in diversifying their production, experienced a significant drop in child mortality, improvements in terms of monthly household food consumption, greater satisfaction in terms of prices obtained for their crop, living conditions etc. Methodological problems such as the relative contribution of Fair Trade and Meru herbs farmers, control sample bias, Fair trade and Meru Herb selection biases are discussed and addressed showing that ex ante selection of Meru members contributes to explain some but not all the results of the study. [13]
[edit] See also
| Fair trade topics | Fair trade | History of fair trade | Fairtrade certification | Fair trade and politics | Fair trade impact studies | Fair trade debate | Alternative trading organization | Trade justice | Worldshop | Black Gold (film) | One Cup (film) |
|---|---|
| Federations | Fairtrade Labelling Organizations International | International Fair Trade Association | Network of European Worldshops | European Fair Trade Association | FINE | Fair Trade Federation |
| Certification | FLO International (standard-setting & producer support) | FLO-CERT (inspection & certification) | International Fairtrade Certification Mark | Fair Trade Certified Mark |
| Campaigns | Fairtrade Town | List of Fairtrade settlements | Fairtrade fortnight | Make Trade Fair | World Fair Trade Day |
| Fairtrade labelling initiatives | Asociación del Sello de Productos de Comercio Justo | Comercio Justo México | Fair Trade Association of Australia and New Zealand | Fairtrade Österreich | Fairtrade Mark Ireland | The Fairtrade Foundation | Max Havelaar Belgique | Association Max Havelaar France | Max Havelaar Danmark | Stichting Max Havelaar | Fairtrade Max Havelaar Norge | Max Havelaar-Stiftung (Schweiz) | Reilun kaupan edistämisyhdistys | Rättvisemärkt | TransFair Canada | TransFair Deutschland | TransFair Italia | TransFair Japan | TransFair-Minka Luxembourg | TransFair USA |
|---|
| ATOs | AgroFair | Alter Eco | Artisans du Monde | Cafédirect | Claro Fair Trade | Ctm altromercato | Divine Chocolate | Equal Exchange | Equita | El Puente | EZA Fairer Handel | Fair Trade Original | Gepa The Fair Trade Company | Ideas | Intermon Oxfam | La Siembra | Oxfam-Magasins du monde | Oxfam Trading | Oxfam-Wereldwinkels | SERRV International | Solidar'Monde | Traidcraft | Twin Trading | Ten Thousand Villages |
|---|
[edit] References
- ^ BBC News Service. (2006, June 28). Global Fairtrade sales taking off. URL accessed on August 2, 2006.
- ^ Just-Food Global Market Review, 2005
- ^ Fairtrade Labelling Organizations International (2006). FLO October 2006 News Bulletin. URL accessed on October 30, 2006.
- ^ Fairtrade Labelling Organizations International (2006). Annual Reports 2000, 2001, 2002, 2003, 2004, 2005. URL accessed on October 4, 2006.
- ^ Fairtrade Labelling Organizations International (2006). Standard Setting. URL accessed on October 4, 2006.
- ^ The Fairtrade Foundation. (2006). [www.fairtrade.org.uk/downloads/pdf/Fairtrade_and_supply_chain.pdf Review of UK supply chain, returns to producers, and retail margin issues]. URL accessed on December 31, 2006.
- ^ Ronchi, L. (2002). The Impact of Fair Trade on Producers and their Organizations: A Case Study with Coocafe in Costa Rica. University of Sussex. p25-26.
- ^ Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America. Colorado State University, p28
- ^ Taylor, Pete Leigh (2002). Poverty Alleviation Through Participation in Fair Trade Coffee Networks, Colorado State University, p18.
- ^ Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America. Colorado State University, p8
- ^ Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America. Colorado State University, p10-11
- ^ Eberhart, N. (2005). Synthèse de l'étude d'impact du commerce équitable sur les organisations et familles paysannes et leurs territoires dans la filière café des Yungas de Bolivie. Agronomes et Vétérinaires sans frontières, p29.
- ^ L. Becchetti,, M. Costantino (2006). Fair Trade on marginalised producers: an impact analysis on Kenyan farmers, working paper CEIS 220 and working paper ECINEQ2006
