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  • Fairtrade coffee - Q & A

    hi all fellow coffee lovers

    the recent discussions on Fairtrade coffee, certification, etc. on this list was brought to my attention by some of you. my name is cameron. i work for Fairtrade Labelling here in ANZ. i was the guy interviewed on ABC Lateline Business for those who followed that link / post.

    anyway, ive read a lot of the posts and stuff and there are a lot of issues raised about Fairtrade that will take a while to answer fully. its wonderful to see so many people passionate about ensuring coffee growers get a fair deal and having a robust debate on the merits or otherwise of Fairtrade as part of the solution to the problem.

    so id like to open up this thread for all of your specific questions on Fairtrade, fair trade, coffee, etc. and ill do my best to answer them.

    i realise you are all spread around the country, but i did wonder about the value of a face to face Q&A somewhere like sydney or melbourne that could be recorded and podcast?

    cameron

  • #2
    Re: Fairtrade coffee - Q & A

    Hi Cameron,

    Unfortunately I didnt get to catch you on lateline, so I hope that this question isnt a repeat of what you have already said, but ...

    I think that what we would all very much like to see is some hard and fast numbers.

    First up, what actually is the FT premium paid. You have probably already read that there was a recent article in The Age that claimed that farmers get 168% more, with another person claiming that they get between 300% and 400% more. I took a look at the FLO webpage and it said that the FT price is $1.21USD/lb when the price is below that, and there is a $0.05USD/lb premium when the price is above that. What wasnt clear was exactly which price this refers to. I have heard elsewhere that it refers to the New York C-market price. Based on the most recent figures on the ICO webpage, which I acknowledge are published on a monthly basis rather than daily, this could be anything from a ca. 4% premium (based on $1.27USD/lb for the higher quality arabicas) to a ca. 50% premium (based on ca. $0.80USD/lb for robustas that we would have no interest in). So whats the deal? How does the FT price interact with the different prices for different coffees traded on the market? Is it fair to say, as my figures above seem to indicate, that FT makes less of a difference for farmers with higher quality crops that command higher prices than it does for farmers with lower quality crops that generate less market interest?

    Secondly, I presume that your organisation has a thorough and independent audit process. If so, where can we see the reports? If this information isnt avaiable to the public, why isnt it?

    Thirdly, what distinctions does FT labelling make, from the consumers point of view, between coffees of different quality?

    Finally, there seem to be a lot of different bodies involved with FT certification. Could you clarify the relationship between FLO, FTANZ, Oxfam and Transfair?

    That would probably all be a good start.

    We could probably organise some sort of Q and A session. What might be easier logistically is to try to do something over Skype.

    Cheers,

    Luca

    Comment


    • #3
      Re: Fairtrade coffee - Q & A

      Cameron,

      Thanks for coming on to CS to engage in the debate. Lucas Questions would be my starting point - but Id also love to hear what developmental work is being done to progress FT. My argument with FT has always been that it is a good start but there hasnt been any (apparent) effort to review the system and implement improvements.

      Quality of coffee is a very big issue and some of the FT beans I have tried have been of poor quality which was a bit sad when you look at the impact FT could have if combined with a Cup-of-Excellence style quality development program.

      Look forward to hearing more!

      Michael Grendel

      Andy (or other mods) I reckon this conversation could be a good one - any chance of slapping a sticky on it for the duration?

      mod edit- thread is now sticky

      Comment


      • #4
        Re: Fairtrade coffee - Q & A

        Originally posted by luca link=1179628700/0#1 date=1179630221


        Finally, there seem to be a lot of different bodies involved with FT certification. Could you clarify the relationship between FLO, FTANZ, Oxfam and Transfair?
        hi luca

        thanks for the welcome and the questions. ill address them in turn.

        the final question is perhaps the best one to start with, cause its important to know who the players and stakeholders are in discussing all of this. it can get a bit confusing otherwise, in my experience.

        so firstly, to Fairtrade certification and who the players are.

        a good starting point is to read this: http://www.fairtrade.net/about_us.html and some of the sub links, like Introduction to FLO and FLOs Structure.

        as youll see, the Fairtrade certification system consists of:

        - FLO e.V, the standard setting and producer business development body, and also the owner of the Fairtrade Label or Mark
        - FLO-CERT, the certification body that certifies producers and traders against the standards
        - Labelling Initiatives, the consuming country based organisations that license people to use the Label on end of chain products, educate people about the Label and Fairtrade, do market and business development, etc.
        - Producer Networks, regional based producer networks that assist producers and represent their interests in the Fairtrade system

        the Labelling Initiative for Australia and New Zealand, is Fairtrade Labelling Australia and New Zealand. this is who i work for. Transfair USA is the Labelling Initiative for the US market. a full list of Labelling Initiatives is here: http://www.fairtrade.net/labelling_initiatives.html

        in Australia and New Zealand, there is also the Fair Trade Association of Australia and New Zealand (FTAANZ). FTAANZ established Fairtrade Labelling ANZ to independently control and monitor the Label as one aspect of fair trade. FTAANZ takes a wider view of fair trade, including IFAT and other ethical trade activities, and has a broad membership structure including individuals, NGOs, businesses, small ethical traders, some producer groups from the Pacific, schools, universities, etc. FTAANZ has a producer development project to facilitate more fair trade in our region, as well as education projects, Fair Trade Communities, Fair Trade Fortnight, etc.

        Oxfam in Australia has two faces - Oxfam Australia, which is the advocacy, research and international development body; and Oxfam Australia Trading, which runs the Oxfam Shops, their online shop, and does all the buying of fair trade goods from around the world. Oxfam Australia Trading is an IFAT member, a founding FTAANZ member and also a Fairtrade licensed operator here in Australia. Oxfam Australia is a founding member of FTAANZ, and one of four members of Fairtrade Labelling ANZ (the other three are Friends of the Earth, Oxfam New Zealand, and Christian World Service NZ). Oxfam Australia does a lot of promotion of fair trade, including Fairtrade certification, but they are not actively involved in the process. Globally Oxfam International has been a vocal advocate to "Make Trade Fair" and has campaigned on the coffee crisis and the activities of the coffee giants in relation to coffee producers.

        i hope that helps

        cameron

        Comment


        • #5
          Re: Fairtrade coffee - Q & A

          Hi Cameron,

          Youre doing well!

          Luca

          Comment


          • #6
            Re: Fairtrade coffee - Q & A

            Originally posted by luca link=1179628700/0#1 date=1179630221

            First up, what actually is the FT premium paid. You have probably already read that there was a recent article in The Age that claimed that farmers get 168% more, with another person claiming that they get between 300% and 400% more. I took a look at the FLO webpage and it said that the FT price is $1.21USD/lb when the price is below that, and there is a $0.05USD/lb premium when the price is above that. What wasnt clear was exactly which price this refers to. I have heard elsewhere that it refers to the New York C-market price. Based on the most recent figures on the ICO webpage, which I acknowledge are published on a monthly basis rather than daily, this could be anything from a ca. 4% premium (based on $1.27USD/lb for the higher quality arabicas) to a ca. 50% premium (based on ca. $0.80USD/lb for robustas that we would have no interest in). So whats the deal? How does the FT price interact with the different prices for different coffees traded on the market?
            sorry i have been a bit remiss in getting back further to these questions luca ... ive been on the road doing meetings and such. back in the office now and will try and knock the questions over this week as much as possible (before shooting off again).

            How much money do Fairtrade producers get?

            There is a lot of information – accurate and otherwise – circulating about how much money producers get from Fairtrade.

            The accurate answer is rather complicated and varies depending on what Fairtrade product is the subject of the question.

            Central to Fairtrade’s proposition is the economic dimension of sustainable development. Fairtrade certification and labelling has two major economic instruments it uses to help achieve the highest development impact possible for disadvantaged producers and workers in developing countries:

            1. payment of a Fairtrade price (reflective of cost of sustainable production); and
            2. a Fairtrade premium (to be invested in social, environmental and economic development projects, autonomously decided by the producer group).

            These instruments are vital. World market prices for coffee, rice and other commodities are highly volatile and often below the costs of production. A stable price, that covers at least production and living costs, is an essential requirement for farmers to escape from poverty and provide themselves and their families with a decent standard of living.

            “The guarantee of the minimum price brings stability. We, producers, are not totally subjected to the law of supply and demand. We know that we will be paid at least US$69 the quintal. This guarantee makes it possible to plan long term, to invest, to develop technical support, in one word, to develop our business”, says Felipe Cancari Capcha, a producer from El Ceibo Cooperative, a Fairtrade cocoa producer in Bolivia.

            The use of the Fairtrade economic instruments is included in the Trade Standards for each Fairtrade certified product category. All of the standards (covering both Production and Trade) are freely available online. You can find them all here: http://www.fairtrade.net/standards.html.

            Yeah, OK, but with coffee, how much do producers get?

            As of 1 June 2007, the Fairtrade Minimum Price for washed Arabica coffee from Central America, Mexico, Africa and Asia will be US$1.21 per pound (US$1.19 from South America and Caribbean), with a Fairtrade Premium of US$0.10 per pound and an organic differential of US$0.20 per pound. The Fairtrade Minimum Price for coffee is being reviewed and a decision on whether – and by how much – to increase the price will be made in late September 2007.

            The Fairtrade Minimum Prices for:
            - unwashed arabica is US$1.15 per pound
            - washed robusta is US$1.05 per pound
            - unwashed robusta is US$1.01 per pound

            The complete Fairtrade standard for coffee is here:
            http://www.fairtrade.net/fileadmin/user_upload/content/Coffee_SF_March_2007_EN.pdf

            The Fairtrade Minimum Price applies to FOB, i.e. the export price. For some producer groups, who use an exporter, their Fairtrade producer cooperative will receive a share of the Minimum Price after the expenses of the exporter is taken out. The exporter and the producer both report their transactions to FLO-CERT to ensure transparency and that exporters are not abusing their role and keeping money from the producer organisations. For other producers that export directly, the full Fairtrade Minimum Price is paid to them.

            In all cases, whether the coffee is sold directly or through an exporter, 100% of the Fairtrade Premium is paid to the Fairtrade producer organisation.

            The Fairtrade standards for coffee state that the price to paid FOB is the Fairtrade Minimum Price or the market price, whichever is higher.

            For an illustration of how this works, see:
            http://www.fairtrade.net/fileadmin/user_upload/content/Arabica_Coffee_Market_Prices_vs._Fairtrade_Minimum _Prices.jpg

            From this “Floor Price” set by the Fairtrade standards, the dynamics of supply and demand, quality, etc. play their part and the final negotiated price between a Fairtrade producer organisation and a Fairtrade buyer can vary quite widely.

            With the Fairtrade minimum price and the market price being relatively close now, why is Fairtrade important? http://www.fairtrade.com.au/node/264.

            Comment


            • #7
              Re: Fairtrade coffee - Q & A

              Originally posted by luca link=1179628700/0#1 date=1179630221
              Thirdly, what distinctions does FT labelling make, from the consumers point of view, between coffees of different quality?
              Fairtrade certification is not a quality certification system. Fairtrade certifies the manner in which the product has been produced and traded. Quality is an issue certainly - but differentiating quality in the market place comes down to the brand owners.

              As coffee consumers - especially as those with a more refined pallette - im sure youve come to associate coffees from particular origins, farmers, regions, roasters with varying degrees of quality. Indeed, I would expect a bit of varied opinion on these matters depending on each persons tastes and preferences.

              There has been debates within the Fairtrade system about quality differentiation and introducing incentives for quality enhancement. At this stage, the decision has been not to add another level of complexity to the system - and to see quality rewarded by higher demand and higher prices within the Fairtrade system.

              So then, isn’t the best way to ensure higher prices to focus on quality?

              Quality certainly has its place in bringing higher prices for particular coffees. However, quality alone doesn’t guarantee the producers are benefiting. Additionally, there needs to be a perceived future in the business of coffee growing for producers to invest in quality. Availability of resources for investment, training, etc. – and being able to meet basic needs for themselves and their family – also enhance the process of investing in and enhancing quality.

              Fairtrade standards and certification provides a valuable framework for quality enhancement, for a number of reasons:

              • the Fairtrade certification process ensures that any additional value gained in the market for Fairtrade coffee goes to the producer organisation, i.e. monitoring the price transactions

              • Fairtrade provides market access, long term trading relationships, stable minimum prices, etc. that provides certainty for investment in quality enhancement

              • the Fairtrade premium provides producer organisations with resources to fund investment in new farming techniques, extension training, etc. to enhance quality

              Over the last 5 years or so, Fairtrade coffees have done quite well at the Cup of Excellence competitions. I think it was in 2003 or 2004 that 6 of the top 10 CoE coffees were from Fairtrade certified producer groups.

              Comment


              • #8
                Re: Fairtrade coffee - Q & A


                Hi Cameron.

                Firstly I must say I love your passion, dedication and effort in posting such detailed replies. I know how time expensive they are and that you only do so because you believe in the Fairtrade system.

                The thing that I get hung-up on is although the "new" premium has doubled the amount per cup on the street seems way higher than it should be and the consumer that thinks they are making a difference is in fact just making the cafe or roaster richer.

                US$ 0.10 per pound is the premium shortly (was US$ 0.05)

                so that is roughly AU$ 0.24 per kilogram...
                a cafe makes 80 coffees per kilo (7 gram shots, 20% waste)

                The amount of Fairtrade premium on a latte is AU$ 0.003

                The person on the street needs to drink 300 lattes to have given the farmer AU$ 1.00 and if the cafe is charging AU$ 0.50 per cup extra for Fairtrade then the cafe made an additional AU$ 149.00

                I really would have hoped that more of the money spent by consumers got to the farms.

                Comment


                • #9
                  Re: Fairtrade coffee - Q & A

                  Cameron, the point that Andys just raised is the one that bugs me the most as a consumer.

                  As the certifying body I should hope Fairtrade would be concerned at retailers and or roasters profiteering by using the Fairtrade name.

                  Comment


                  • #10
                    Re: Fairtrade coffee - Q & A

                    TG and Andy hit the nail on the head!!!

                    Comment


                    • #11
                      Re: Fairtrade coffee - Q & A

                      Originally posted by Thundergod link=1179628700/0#8 date=1180436168
                      Cameron, the point that Andys just raised is the one that bugs me the most as a consumer. As the certifying body I should hope Fairtrade would be concerned at retailers and or roasters profiteering by using the Fairtrade name.
                      Thanks Andy and TG. The price paid by consumers, etc has been an ongoing source of debate and discussion for a long time, as youd imagine.

                      Here are some of the issues / responses / comments on this topic:


                      1. At the level of the roaster, brand owner, and final retailer (shops, cafes, etc.), the price charged to consumers is not regulated at all. As a Labelling Initiative, we encourage our licensees not to make more money from their Fairtrade products compared to their regular products. We do acknowledge there may be additional costs of doing Fairtrade – such as higher costs for beans, promotional material, product packaging, and of course the license fees they need to pay and the internal control systems they need to have in place. As such, we also expect our licensees not to lose money from Fairtrade – it is business, not charity.

                      Variation in the costs associated with a particular business, possible use of price discrimination to position their brand, differences in quality, target markets, etc. all are variables in the final price paid by consumers.

                      The key thing is that, at the level of the producer, they are being paid a stable price that covers cost of sustainable production as well as a premium to invest in local sustainable development initiatives, and also benefiting from the other impact areas of Fairtrade.


                      2. Does it concern FLO and yourselves that retailers can mark up the coffee and sell it at a premium and that that premium does not get passed onto the growers? Do you accept that it is open to exploitation by retailers who can target price-insensitive customers with a higher priced coffee?

                      ANSWER: Many Fairtrade products are now sold at very competitive prices to their conventional counterparts, and in the case of 100% switches (such as in the UK with M&S tea and coffee, AMT Coffee, Co-op own label coffee and chocolate, and all Sainsburys bananas), there is no difference at all. Given that you can also buy Fairtrade products more cheaply than some conventional ones, its clear that Fairtrade prices to farmers are nothing to do with shop prices to consumers. Instead, Fairtrade ensures that, whatever the price paid by the shopper for a product carrying the FAIRTRADE label, you know the producers have received at least the Fairtrade minimum price and social premium for investment in the future.

                      Find out more about retail pricing on the Fairtrade Foundation UK website:
                      http://www.fairtrade.org.uk/downloads/pdf/Retail_pricingmp.pdf


                      3. The issue of retailers gouging is always going to be there. For example, it has been raised in ANZ with respect to the wide variation in wholesale and retail prices for 1kg of roasted Fairtrade coffee. The criticisms often miss some key points:

                      • It is ILLEGAL to limit the profits companies can make from products. No Fairtrade Labelling Initiative has the ability to control what mark up companies put on Fairtrade products. We can encourage operators (licensees, retailers) not to make any more profit from Fairtrade than their other product lines. We can encourage consumers to search around for the best deal for them, i.e. market competition. But we cant mandate what people can do with Fairtrade Labelled products. Essentially people will pay what they will pay in the market place depending on how much they value the Label.

                      • Different companies have different cost and pricing models depending on their location, business structure, supply chains, staff, etc. For example, you cant compare the price of Fairtrade coffee from a small operator in the heart of Sydney to volunteer run social enterprise. The former has very high costs associated with where their business is located. The latter benefits from low labour costs. The only fair comparison is to compare the price of the Fairtrade products to the non-Fairtrade products sold by the same operator.

                      • Products vary in their quality. You go to a supermarket and you can choose to buy a top end coffee for $17 for 250g or a low end coffee for $5 for 250g. The products are at different price points and have different markets.

                      • Related to price differentiation on quality (real or perceived) is the fact that operators often choose a price point that they believe the market will pay and that is what they work to - based on market research, other products in the market, etc. this can mean lower profit margins in the interests of selling product.

                      The best thing to do is to compare the price under Fairtrade to non-Fairtrade rather than comparing end of chain sales to how much they are paid. Such arguments also ignore the principle in Fairtrade of seeking to build the capacity of the producers to do as much of the transformation of the product as possible for themselves and the elimination of middle men.

                      Comment


                      • #12
                        Re: Fairtrade coffee - Q & A

                        Originally posted by Thundergod link=1179628700/0#8 date=1180436168
                        Cameron, the point that Andys just raised is the one that bugs me the most as a consumer. As the certifying body I should hope Fairtrade would be concerned at retailers and or roasters profiteering by using the Fairtrade name.
                        One more response on this issue:

                        Here is a response from the UK to an article looking at retailers cashing in on Fairtrade called “Fair Trade Fat Cats”. I think this puts the Fairtrade position quite well. Fairtrade demonstrates its possible to pursue People, Planet and Profit all at the same time, with wins for all 3:

                        Dear Mr Johnson

                        Phillip Oppenheim’s article (The Spectator 5th November 2005) misses several key points about Fairtrade. Fairtrade is not about charity. It is about transforming the impact of commercial trade in the lives of producers in developing countries. The success of Fairtrade shows that you can pay a fair price to the producer and still compete successfully in the conventional commercial environment. Certification with the FAIRTRADE Mark means consumers can be totally confident that the producers have received a price that provides a decent income and a little extra to invest in a better future for their families and communities. This is what matters most to the farmers, and is rightly supported by consumers who are buying Fairtrade products.

                        Fairtrade is also about empowering farmers in the developing world, enabling them to participate more actively in the trading relationship. As Amos Wiltshire, a Caribbean banana farmer has said, “With Fairtrade, small farmers have been transformed from marginalized farmers into businessmen”. The Fairtrade Foundation will continue to work with all retailers to maximize the sales of Fairtrade products so as to deliver more benefits to more people in the developing world. This work complements that of the development charities and the campaigns for wider international trade justice.

                        Yours sincerely,
                        Barbara Crowther, Fairtrade Foundation

                        Comment


                        • #13
                          Re: Fairtrade coffee - Q & A

                          Originally posted by Andy Freeman link=1179628700/0#7 date=1180428512
                          US$ 0.10 per pound is the premium shortly (was US$ 0.05)

                          so that is roughly AU$ 0.24 per kilogram... a cafe makes 80 coffees per kilo (7 gram shots, 20% waste)

                          The amount of Fairtrade premium on a latte is AU$ 0.003

                          The person on the street needs to drink 300 lattes to have given the farmer AU$ 1.00 and if the cafe is charging AU$ 0.50 per cup extra for Fairtrade then the cafe made an additional AU$ 149.00
                          Hi Andy

                          Some other things to think about in the metrics here - and in defence of many of our licensed operators who I know are working their butts off to support and promote Fairtrade, do the right thing, and are not lining their pockets with swindled gold:

                          FACTOR ONE - BEAN PRICES

                          - the current minimum price to buy a conventional (non-organic) Fairtrade green bean is US$1.21 / pound + the US$0.10 / pound premium = US$1.31

                          - In Australia and New Zealand, the overwhelming majority of Fairtrade coffees available are purchased at prices far in excess of the Fairtrade minimum price due to their quality and high demand for coffee from these origins, i.e. in excess of US$1.21 / pound

                          - pretty much all the Fairtrade coffee in Australia and New Zealand is also organic certified, so that is an additional US$0.20 differential / pound on top of the Fairtrade minimum price and Fairtrade premium

                          FACTOR TWO - COSTS OF DOING FAIRTRADE

                          - in addition to (perhaps) paying more for beans (obviously, again, some beans Fairtrade may be cheaper than some other non-FT quality beans), there are other Fairtrade cost factors

                          - these factors include development of separate promotional material (brochures, cups, etc), differentiated product packaging, and of course the license fees they need to pay, the internal control systems they need to have in place, and the compliance efforts (reporting, etc.)

                          FACTOR THREE - MARKET POSITIONING

                          - as i mentioned elsewhere, there is also the thinking that goes in to market positioning, including price differentiation, which may lead roasters (and perhaps cafes, but they are not really my business) to put their coffees at particular price points, sometimes with lower profit margins, sometimes higher, depending on different factors


                          Overall, we expect our licensees not to lose money from Fairtrade – it is business, not charity.

                          Over the last 3.5 years, Ive known roasters to charge less, the same and more for Fairtrade compared to other products in their range. Many of them sell Fairtrade at a similar price point to their organic certified - or indeed move all their organic to be dual Fairtrade and organic.


                          Comment


                          • #14
                            Re: Fairtrade coffee - Q & A

                            Something Id like to add to the discussion is the benefits to Fairtrade producers and their organisations beyond the economic instruments of the Price and Premium.

                            Obviously these economic instruments are central and core to what Fairtrade promises and delivers. Yet it is a lot more than that.

                            Other areas of benefit for Fairtrade certified producer organisations, in addition to the price and premium, as outlined by FLO (http://www.fairtrade.net/impact_areas.html) are:

                            Beyond the Fair Price - The concept of Fairtrade, however, goes far beyond a simple economic transaction. What is at the heart of Fairtrade is that buyers and producers build long term partnerships. Unlike aid, which is dependent on donors, Fairtrade offers a more sustainable way for farmers, workers and their families to improve their livelihoods.

                            Better living conditions - The social, working and living conditions of the producers, the workers and their families are considerably improved over time. The benefits often extend to the entire community, which thanks to the Fairtrade Premium can actively impact upon the lives of individuals: improve health services, provide medical supplies, build community stores for low-priced staple foods, provide educational facilities and extend educational opportunities for children. For example, the Costa Rican coffee cooperative consortium COOCAFE uses Fairtrade revenues to fund improvements in 70 local schools and has already provided 6,700 scholarships to students so they can attend high school and university.

                            Environmental Sustainability - Fairtrade farmers and workers respect the environment and are encouraged to engage in sustainable methods of production. Farmers implement integrated crop management and avoid the use of toxic agrochemicals for pest management. Nearly 85 percent of Fairtrade certified coffee is also organic, which is better for the environment and for the health of the workers.

                            Access to international markets - For small and marginalised producers it is very difficult to access international markets. They lack access to information, infrastructure and influence on market price or tariff rates. Fairtrade helps producers to gain a better understanding of international markets. It provides the producers with contacts and mobilises resources to present the products at international fairs. Last but not least, Fairtrade helps to build capacity and confidence to sell Fairtrade products also on the conventional markets. Read about the Surin rice Fund Cooperative in Thailand and its success.

                            The empowerment of women - Important investments can be made in women’s income generating activities that are not related to the farm, thereby strengthening their income, business experience and position in the family. This has taken place in ‘Las Hermanas’ for example, a women’s cooperative founded by the Soppexcca coffee cooperative in Nicaragua, where 184 women own their own plots of land and commercialize their produce internationally. Read about the successful initiative of female workers in a Fairtrade tea plantation in India.

                            Long-term investments - Long-term investments in pension schemes, life insurance, loan schemes for business development, income diversification schemes etc. can be financed. Read about the achievements of the Heiveld tea cooperative in South Africa.

                            Overcoming racial discrimination - One of the aims of Fairtrade is to promote equal rights amongst different ethnical groups and to overcome racial discrimination. For instance, in South Africa the Joint Body is promoting entrepreneurship because it is linked to the governments program to make black workers co-owners of plantations owned by whites. Plantations must be at least 25% black-owned to enter Fairtrade.

                            Comment


                            • #15
                              Re: Fairtrade coffee - Q & A

                              Originally posted by C Neil link=1179628700/0#13 date=1180478056
                              Obviously these economic instruments are central and core to what Fairtrade promises and delivers. Yet it is a lot more than that. Other areas of benefit for Fairtrade certified producer organisations, in addition to the price and premium, as outlined by FLO (http://www.fairtrade.net/impact_areas.html) are:
                              (continued)

                              Community solidarity - The Fairtrade system has been criticised for singling out producer groups that enjoy fair trading conditions while their neighbours or colleagues need to continue working under poor conditions. But research has shown that benefits of the Fairtrade system often spill over and solidarity with other disadvantaged but non-Fairtrade producers can increase. For example, in Indonesia, Fairtrade revenues made it possible for members of the Gayo Organic Coffee Farmers Association (PPKGO), in Aceh to provide humanitarian aid for victims of the devastating earthquake and tsunami that hit the region in December 2004. PPKGO supplied eight truckloads of food for disaster victims, and cooperative members led teams of volunteers in the relief effort.

                              Ensuring labour rights - Thanks to Fairtrade, workers take on a more active role on the farm, plantation or factory where they are working. They are more involved in the business practices and more aware of their rights. It is often also the first time that they become part of a trade union in order to defend their rights. They also gain experience in dealing with the premiums, such as handling banks, making decisions on how to best spend the money and how to organise themselves. Teresa Wanjiru Muki Ri, a grader in the pack house of Flower Panda, a Fairtrade flower farm in Kenya explains “I have been paid my pro-rata leave dues and I am benefiting from a provision of free basic medical cover. I have also learnt about freedom of association which I was not really aware of before”.

                              A stronger business approach - Last but not least, Fairtrade enables stronger organisations to develop, which are more experienced in accountancy, business planning, literacy etc. It also improves the quality of the product and provides better access to international markets (also to non-Fairtrade markets for high quality products) through the establishment of long-term trading relationships.



                              There is a growing body of work on impact that you can find on the FLO website too. See http://www.fairtrade.net/impact.html.

                              We have some producer profiles on our website too, accessible here: http://www.fairtrade.com.au/Producersandimpacts.



                              Cameron



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