Fairtrade makes a difference in fighting poverty: here’s how

Fairtrade is not a silver bullet for solving global poverty. Reforms to international trade, increased unionization, and stronger national labour laws must be key parts of any long-term, sustainable solution. Yet there is clear evidence that, from an ethical consumer’s perspective, Fairtrade is the way to go. And the more that demand grows for Fairtrade certified products, the better.

Smallholder producers and farm workers growing Fairtrade certified crops generally enjoy higher incomes than their non-certified counterparts. This of course depends greatly on the region and sector, but Fairtrade cooperatives and plantation workers growing coffee and rice at the very least have benefitted from modest gains and more stable incomes. The Fairtrade Minimum Price has successfully provided higher incomes and a ‘safety net’ for farmers of most crops during market downturns, when commodity prices for non-certified farmers plummet. 

Some studies contend that income gains from Fairtrade certification are mostly enjoyed by already skilled workers. Even if this is true the structural advantages of Fairtrade for all certified farm workers are noteworthy. These include more stable income over time, longer term contracts, improved access to credit, and better national representation, producer confidence, and worker empowerment. 

Advantages of the Fairtrade Premium – the extra amount provided to certified producers – have been most notable. Fairtrade farms and plantation labourers receiving the premium were found to have more assets and better access to credit, while using the money to issue payments to farmers and invest in their operations, community infrastructure, training, education for their children, utilities, or healthcare.

The use of Worker Committees on certified plantations has led to more negotiating power and, at the very least, ensured compliance with national labour laws and parity with unionized workspaces. Fairtrade farmers in the flower sector have been able to escape the notoriously exploitative and discriminatory practices of that industry, securing improved health and safety conditions, overtime, and better paid leave rules. 

The ability for Fairtrade to benefit farmers more than conventional trade is clear. Challenges remain, not least with ensuring that hired seasonal labourers on smallholder farms share in these gains. Meta-analyses of Fairtrade point out that income gains, even for certified farms, are tempered by an inability to sell their full yield as Fairtrade and thus needing to sell products at market prices, which may be very low. The solution begins with increasing demand for Fairtrade among consumers. If we and our friends and family support Fairtrade products, slowly increasing the market share of certified goods, we can help empower farmers across the Global South.


Studies:

Natural Resources Institute (NRI). “The Last Ten Years: A Comprehensive Review of the Literature on the Impact of Fairtrade.” University of Greenwich: 2009. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.619.6440&rep=rep1&type=pdf

Overseas Development Institute (ODI). “The Impact of Fairtrade: A Review of Research Evidence, 2009-2015.” London, UK: 2017. https://www.fairtrade.net/library/the-impact-of-fairtrade-a-review-of-research-evidence-2009-2015

Laboratoire Interdisciplinaire Sciences Innovations Sociétés (LSIS). “Participatory Analysis of the Use and Impact of the Fairtrade Premium.” Paris, France: 2019. https://files.fairtrade.net/publications/2019_LISIS_UseImpactFairtradePremium.pdf

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