Fairtrade is an ethical certification and a social movement whose goal is to help producers, that produce food for us, in developing countries achieve better trading conditions and to promote sustainability. Fazer purchases cocoa through Fairtrade Cocoa Programme.

What does the Fairtrade certification provide for the farmers?

Fairtrade works to benefit small-scale farmers, who are amongst the most marginalized groups globally to enable them to improve their livelihoods and reach their potential. Fairtrade is about better prices, decent working conditions, fair terms of trade for farmers and better livelihoods. The aim is to improve food security and vulnerability of farmers. It’s about supporting the development of thriving farming communities that have more control over their futures and protecting the environment in which they live and work. The Fairtrade Minimum Price provides a safety net for farmers which can mean they are less vulnerable to price volatility. Fairtrade Premium investments can mean that farmers benefit from services that they may otherwise have had to pay for, such as fertilizer and school fees.

Fairtrade supports the organizational strength of co-operatives in order they are better organized and managed and in a better position to make sustainable business as representatives of farmers. The Fairtrade Premium is also often a vital resource for co-operatives to put into place programs that support food security and diversification. Fairtrade also promotes long-term partnerships which farmers highly value as they can predict their income and plan and invest for the future, encouraging economic sustainability.

What is the cost of the Fairtrade certification to a farmer?

Small producer organization manages the cost. The overall average fee is 2 200 euros. If the co-operative cannot manage to pay the cost, it will be supported.

What are the key criteria regarding following principles?

a) People
Fairtrade aims to support empowerment among small producers and workers. Criteria are: Setting of Fairtrade minimum price, small producer organisations develop their democratic decision-making processes, payment of the Fairtrade Premium is an additional sum of money which goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions. The usage of Fairtrade premium is decided democratically in the small producer organisations, requirement of labour rights (freedom of association, collective bargaining, freedom from discrimination, increase the workers’ awareness of their rights), no child nor forced labour in accordance with the principles of the International Labour Organisation (ILO) conventions, decent working conditions. (Working conditions are equitable for all workers.

Salaries must be equal or higher than the regional average or than the minimum wage in effect and be increased towards living wage. Health and safety measures must be established in order to avoid work-related injuries).

b) Planet
Environmental protection is a key element of Fairtrade’s view of sustainability. Key criteria are: Energy and greenhouse gas emission reduction, soil and water quality, pest management, biodiversity protection, prohibition of genetically modified organisms and harmful chemicals and waste management. The Standards prohibit the use of several agrochemicals that are harmful to the environment and health and focus on reducing the use of pesticides. They require personal protective equipment is used, that farms are free from hazardous waste and are using water sustainably, and encourage activities to enhance biodiversity.

The Standards also promote training for farmers, which can include advice on switching to environmentally friendly practices, such as developing nutrient-rich soils that support healthy plants and encouraging wildlife to help control pests and diseases. Beyond the Standards, the Fairtrade Premium is used to fund a range of projects and training that promotes environmental sustainability. Over 50 percent of all Fairtrade certified producers are also certified as organic.

c) Profit
The Fairtrade Minimum Price provides a safety net for farmers which can mean they are less vulnerable to price volatility. This can mean a better cash flow, greater access to credit and the ability to save more easily. The stability of the Minimum Price means that co-operatives may also be able to access finances and loans. Co-operatives also gain security from longer-term contracts with exporters through the Fairtrade market, which in some cases has enabled them to negotiate better prices and trading terms. Based on detailed calculations of the costs of sustainable production, it has a stabilizing effect, and sometimes a boosting effect, on small farmers’ income. Combined with longer-term contracts and pre-financing, it enables small farmers to plan ahead.

Fairtrade encourages co-operatives to build multiple, direct relationships with different markets, reducing their dependency on just one buyer. Having access to market information and training in business and negotiation skills means co-operatives can negotiate directly and confidently with their buyers. Supporting farmers to improve the amount of crop they produce and its quality are important for sustainable livelihoods. It means farmers can earn more from what they produce to become more economically stable and more reliable suppliers, which improves the stability of business relationships. Productivity and quality are increased as a result of improved farming practices and regular technical support. The Fairtrade Premium often enables farmers to make investments in productivity and quality.

Investments in shared facilities, such as warehousing, storage, transport, washing and drying facilities and nurseries for new crops also ensure quality and the reduction of wastage, and ultimately increase sales and income. These shared facilities and services are essential for farmers, who could not make these investments individually.

d) Traceability
Physical traceability criteria means that Fairtrade products must be marked and kept separate from non-Fairtrade products at each stage of production and processing. Physical traceability may not be possible for certain products without bringing harm to many farmers and workers. For products where producers have no control over processing, these farmers and workers would have no chance to sell on Fairtrade terms when the manufacturer does not keep the product physically separate. The physical traceability requirements under the Trader Standards would not be compulsory for cane sugar, orange juice, cocoa and tea.

How do you measure the impact created by Fairtrade?

Fairtrade’s collects regular monitoring data from all producer organizations holding Fairtrade certification. Regular monitoring activities are conducted with all producer organizations at the time of the Fairtrade audit, to be expanded to activities conducted by the Fairtrade producer support teams. Monitoring processes collect currently data relating to information about the immediate results (outputs) of Fairtrade’s activities.

Data relating to outcomes and impacts are primarily collected via evaluative research which are commissioned to external institutions with significant expertise. Research incorporate evaluation of key strategic areas such as livelihoods, empowerment, hired labour, social compliance, climate change, gender and producer services.

What is the main impact that you’ve been able to create? What are you most proud of?

Fairtrade has been shown to increase standards of living and reduce risk and vulnerability for farmers and workers. Several studies have proven this. Impact studies and reports: http://www.fairtrade.net/resources/evaluation-research.html

What is the biggest challenge or area of development for Fairtrade?

Our own research along with insights from our field staff and external experts highlight areas where Fairtrade needs to do better and deliver deeper impact for farmers and workers. These include progressing faster towards a living wage in our Standards, doing more to extend Fairtrade’s core work to farm workers, empowering women farmers and workers, tackling power imbalances in supply chains, building effective climate change resilience within communities and scaling up our work within countries.

These are challenges that we acknowledge and are progressing to address through future strategies. Fairtrade certification is one mean to improve the livelihoods of farmers and workers and working conditions of them. In addition, challenging unfair trading practices is also a crucial part of what Fairtrade does. The challenging role of Fairtrade is to address the growing issues raised by the concentration of buyer power and unfair trading practices in agricultural chains.

To make cocoa sustainable, cocoa farming should provide a living income. What is the most efficient action to reach this? 
We have research and analysis underway to refine Fairtrade’s economic interventions in support of living incomes. Our preliminary analysis draws an important link between diversification and improved food security and livelihoods. We are already encouraging the investment of Fairtrade premiums in such projects.

For example, with support from Fairtrade’s technical fund, Fairtrade premiums have allowed groups in Côte d’Ivoire to launch projects in “Improve productivity, strengthen women’s participation and diversify income” and “Empowerment of women through diversification of income”.

More information 
www.reilukauppa.fi (in Finnish)

http://www.fairtrade.net/ (in English),