The impact of Fair Trade images

Image credit: Anette Kay

The impact of Fair Trade

We know that buying Fairtrade is the right thing to do, but what impact does ‘doing the right thing’ have on the producers that Fair Trade is intended to benefit?

The latest Scope and Benefits report published by Fairtrade International provides some answers. Looking at the twelve months up to the end of 2011, it found that smallholder organisations reported a 30 per cent increase in sales revenues on Fairtrade terms, and a 26 per cent increase in the Fairtrade Premium.

There was strong growth in cocoa and sugar sales, with the Fairtrade Premium received by smallholder cocoa farmers increasing by 89 per cent, and the total number of farmers producing Fairtrade sugar growing from 17,600 to 37,200 – the result of large-scale commitments to Fairtrade made by some major sugar and chocolate companies.

Sales volumes of coffee and tea also increased, while volumes of bananas declined slightly (the result of decreased production in the Windward Islands following a drought and hurricane) and producers of tea and sports balls continued to struggle to sell a significant percentage of their total output as Fairtrade

Also of concern was the relatively small share of their production that plantations and other hired labour set-ups in some product areas were able to sell as Fairtrade. Recognising this, Fairtrade International is beginning a new Hired Labour Strategy to increase impact and ensure greater benefits for workers.

Analysis of Fairtrade Premium expenditure showed that small producer organisations are increasingly using it to invest in their businesses, in organisational development, and in supporting production and processing improvements for their members, though many organisations say that they have to continue to use the Fairtrade Premium to top up payments to members to ensure member commitment. (This has been a particular issue with coffee farmers as a result of the high market prices for coffee.) These activities continue to displace the more traditional use of Fairtrade Premium to support wider aspects of community development.

The Fair Trade world

As well as looking at impact, the Fairtrade International report provides a snapshot of the Fair Trade world at the end of 2011. It found that:

  • 59 per cent of all farmers and workers within the Fairtrade system live in Africa. Latin America and the Caribbean account for 24 per cent, and Asia and Oceania for 17 percent.
  • Of the 66 countries with Fairtrade certifications, Tanzania has the most farmer members of Fairtrade small producer organisations and India has the largest number of workers in Fairtrade hired labour organizations. Taking farmers and workers together, Kenya has the highest number of people participating in Fairtrade overall, accounting for 14 percent of all farmers and workers in the Fairtrade system.
  • Women make up 25 per cent of the farmers and workers involved in Fairtrade overall. Women are more strongly represented in Fairtrade product categories that are open to hired labour organizations — for example, tea, flowers and plants, fresh fruit and fruit juices – where women reportedly represent 47 per cent of all workers.
  • Fairtrade producer organisations reported Fairtrade sales values totalling €664.5 million for the 12-month period preceding their 2011 audit. The four largest products by value—coffee, bananas, cocoa, and flowers and plants—generated 87 percent of the reported Fairtrade sales income, with Fairtrade coffee alone responsible for nearly 60 percent of all reported Fairtrade sales income.
  • Fairtrade sales by small producer and contract production organisations represented 87 percent of the total reported value of all sales.
  • Sales were unevenly spread between the Fairtrade producer organisations in different countries. As in previous years, 75 percent of the Fairtrade sales revenues were reported by just ten countries, eight of which were in Latin America and the Caribbean.

Read the full report (PDF, 6MB)