The Fairtrade Foundation

The Fairtrade Foundation
Charitable organization
Founded 1992
Headquarters London, England, UK
Key people
 Mike Gidney, Chief Executive
Website www.fairtrade.org.uk

The Fairtrade Foundation is a charity based in the United Kingdom that works to empower disadvantaged producers in developing countries by tackling injustice in conventional trade, in particular by promoting and licensing the Fairtrade Mark, a guarantee that products retailed in the UK have been produced in accordance with internationally agreed Fairtrade standards.[1] The Foundation is the British member of FLO International, which unites 23 Fairtrade producer and labelling initiatives across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand.[1]

The organisation, registered as a charity, exists to improve the position of poor and marginalised producers in the developing world, by encouraging industry and consumers in the United Kingdom to support fairer trade.[2]

The Foundation aims to achieve its goals by:

How it works

The marketing system for Fairtrade and non-Fairtrade coffee is identical in the consuming countries, using mostly the same importing, packing, distributing and retailing firms. Some independent brands operate a virtual company, paying importers, packers and distributors and advertising agencies to handle their brand, for cost reasons.[3] In the producing country Fairtrade is marketed only by Fairtrade cooperatives, while other coffee is marketed by Fairtrade cooperatives (as uncertified coffee), by other cooperatives and by ordinary traders.[4]

This mode of operation has led to sharp criticism of the foundation.[5] It is argued that, because retailers and cafes in the rich countries can sell Fairtrade coffee at any price they like, nearly all the extra price paid by consumers, 82% to 99%, is kept in the rich countries as increased profit. There is evidence that dishonest importers do not pay the full Fairtrade price, so an even smaller proportion reaches the Third World.[6]

Cooperative traders and exporters can sell coffee as Fairtrade certified if they meet the political standards of FLO and they pay them a certification and inspection fee. Other administration costs and production costs are incurred to meet these standards. The exporter (not the farmer) is paid a minimum price for Fairtrade certified coffee when the world market is oversupplied, and a Fairtrade premium of 15c per lb at other times. The cooperatives can, on average, sell only a third of their output as Fairtrade, because of lack of demand, and sell the rest at world prices.[7] As the additional costs are incurred on all production, not just that sold as Fairtrade, cooperatives sometimes lose money on their Fairtrade membership.[8] After the additional costs have been subtracted from the Fairtrade price, the rest goes on ‘Social Projects’ such as clinics, women’s groups and baseball pitches.

Critics therefore argue that farmers do not get any of the higher price under Fairtrade.[9] Nor is there any evidence that they get higher prices as a result of better marketing: the cooperatives sometimes pay farmers a higher price than farmers do, sometimes less, but there is no evidence on which is more common.[10] Farmers do, however,incur extra costs in producing Fairtrade, so they certainly do lose money from Fairtrade membership in some cases. There is little or no research on the extra costs incurred, or the effect of Fairtrade membership on the income of farmers.

However, other economists have argued that the existence of a Fair Trade marketing route benefits producers by raising producer prices generally,[11] and there is evidence of such an effect at least among coffee producers;[12][13] according to Podhorsky, the critics of the Fairtrade Foundation err by assuming that fair trade producers receive the world price for coffee, when that is in general not so.

To become certified Fairtrade producers, the primary cooperative and its member farmers must operate to certain political standards, imposed from Europe. FLO-CERT, the for-profit side, handles producer certification, inspecting and certifying producer organisations in more than 50 countries in Africa, Asia, and Latin America.[14] In the Fair trade debate there are many complaints of failure to enforce these standards, with Fairtrade cooperatives, importers and packers profiting by evading them.[15]

Organisational links

The Foundation was established in 1992 by CAFOD, Christian Aid, New Consumer, Oxfam, Traidcraft and the World Development Movement. These organisations were later joined by the Women's Institute, Britain's largest women's organisation, and other organisations including Banana Link, Methodist Relief and Development Fund, Nicaragua Solidarity Campaign, People & Planet, SCIAF, Shared Interest Foundation, Soroptimist International, Tearfund and the United Reformed Church.[1]

Promotion

The Fairtrade Foundation organises and coordinates promotional campaigns and events every year, such as the Fairtrade fortnight (typically in February/March), the British counterpart of Max Havelaar France's Quinzaine du Commerce Équitable. The Foundation also coordinates the Fairtrade Town campaign, which designates areas and towns committed to the promotion of Fairtrade certified goods.

The Fairtrade Foundation commissions professional photographers to take images of farmers and workers that belong to Fairtrade certified producer groups. Some of the photographers the Foundation and FLO has worked with are Simon Rawles, Peter Caton, Eduardo Martino, Richard Human, Didier Gentilhomme and Anette Kay.[1]

Market penetration

Since The Co-operative Food became the first supermarket to sell a Fairtrade product (Cafedirect coffee) in 1992, both the range and total sales of Fairtrade certified products in UK supermarkets has grown extensively.[16][17] In 2013, there were over 4000 Fairtrade products available in the UK with estimated sales of over £1.7bn.[18] Products carrying the Fairtrade label can be found at vendors like Asda, Budgens, Booths, The Co-operative Food, Londis, Marks & Spencer, Morrisons Sainsbury's, Spar, Tesco, Waitrose as well as in hundreds of coffee shops, small retailers and online merchants.

In 2007, Fairtrade certified sales in the United Kingdom amounted to approximately £493 million, up from £273 million in 2006. Sales of their top selling product, bananas, were over 150 million pounds, an increase of 130 percent. In 2007, 25% of the bananas sold in the United Kingdom carried the Fairtrade label. Fairtrade sales of coffee in Britain, which had been their top selling product in 2006, rose 24 percent to 117 million pounds.[19]

It was estimated in 2014 that approximately 77% of British adults could identify the Fairtrade Certification Mark,[18][20] up from 25% in 2003, 39% in 2004, 50% in 2005 and 57% in 2007.[21] In 2008, an estimated two in three UK households regularly bought at least one Fairtrade-labelled product.[22]

The Fairtrade Foundation is a registered charity (no. 1043886). It is also a company limited by guarantee, registered in England and Wales (no. 2733136).[1]

References

  1. 1 2 3 4 5 http://www.fairtrade.org.uk/what_is_fairtrade/fairtrade_foundation.aspx
  2. 1 2 The Fairtrade Foundation. (2000). Unpeeling the Banana Trade. URL accessed on March 5, 2008.
  3. ↑ Davies, I.A. and A Crane, ‘Ethical Decision Making in Fair Trade Companies’, Journal of Business Ethics 45: 79–92, 2003. P84
  4. ↑ Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.; Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.; Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.; Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems.; Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October.
  5. ↑ Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011(DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm;Valkila, J., Haaparanta, P., & Niemi, N. (2010). “Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers.” Journal of Business Ethics, 97:257-270. Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research, 59(3), 322–330.Mendoza, R., & J. Bastiaensen, J. (2003). “Fair Trade and the Coffee Crisis in the Nicaraguan Segovias.” Small Enterprise Development, 14(2), 36–46.
  6. ↑ Raynolds, L. T. (2009). Mainstreaming Fair Trade Coffee: from Partnership to Traceability. World Development, 37 (6) 1083-1093, p. 1089; Valkila, J., Haaparanta, P., & Niemi, N. (2010). Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers. Journal of Business Ethics, 97:257-270 p. 264, Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics, 68 3018-3025, pp. 3022-3; Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics, 86:3-26, p. 12; Barrientos, S., Conroy, M. E., & Jones, E. (2007). Northern Social Movements and Fair Trade. In L. Raynolds, D. D. Murray, & J. Wilkinson, Fair Trade: The Challenges of Transforming Globalization (pp. 51–62). London and New York: Routledge. Quoted by Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics, 86:3-26, p. 21.;de Janvry, A., McIntosh, C., & Sadoulet, E. (2010). Fair Trade and Free Entry: The Dissipation of Producer Benefits in a Disequilibrium Market. Retrieved December 24, 2012, from http://are.berkeley.edu/~alain/workingpapers.html.
  7. ↑ Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.; Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.; Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.; Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October; Renard, M. C. and V. P. Grovas (2007), ‘Fair Trade coffee in Mexico: at the center of the debates’, ch. 9 in D. Murray, L. Raynolds and J. Wilkinson (eds), Fair Trade: The Challenges of Transforming Globalisation, London: Routledge. Pp 38-9; Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems; Bacon, C. (2005), ‘Confronting the coffee crisis: can Fair Trade, organic and speciality coffee reduce small-scale farmer vulnerability in northern Nicaragua?’, World Development, 33(3): 497–511; Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.
  8. ↑ Weber, J. (2006). Rationing in the Fair Trade Coffee Market: Who enters and How? International colloquium on fair trade and sustainable development. Montreal: Ecole des Sciences de la Gestion, Universite du Quebec.; de Janvry, A., McIntosh, C., & Sadoulet, E. (2010). Fair Trade and Free Entry:The Dissipation of Producer Benefits in a Disequilibrium Market. Retrieved December 24, 2012, from http://are.berkeley.edu/~alain/workingpapers.html;Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.
  9. ↑ Fairtrade International (FLO). (2011). Explanatory Document for the Fairtrade Standard for Small Producer Organizations. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-10-01_EN_SPO_Explan_Doc_2_.pdf; Fairtrade International (FLO). (2011). Fairtrade Standard for Coffee for Small Producer Organizations version: 01.04.2011. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-01_EN_SPO_Coffee.pdf; Fairtrade International. (2011). Explanatory Document for the Fairtrade Trade Standard. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2011-12-29_Explan_Doc_GTS_EN.pdf; Fairtrade Labelling Organizations International e.V. (2011). Fairtrade Standard for Small Producer Organizations, version: 01.05.2011_v1.1. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-07-11_SPO_EN.pdf; Fairtrade Labelling Organizations International e.V. (2011). Generic Fairtrade Trade Standard. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-02_GTS_EN.pdf
  10. ↑ Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011(DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm
  11. ↑ Podhorsky, A. (2015). A positive analysis of Fairtrade certification. Journal of Development Economics, 116, 169-185. doi:10.1016/j.jdeveco.2015.03.008
  12. ↑ Imhoff, S., Lee, A., 2007. Assessing the potential of Fair Trade for poverty reduction and conflict prevention: a case study of Bolivian coffee producers. Working Paper. Europainstitut, University of Basel.
  13. ↑ Ruben, R., Fort, R., Zuniga-Arias, G., 2009. Measuring the impact of fair trade on development. Dev. Pract. 19, 777–788.
  14. ↑ FLO-CERT (2008). FLO-CERT. URL accessed on August 1, 2008.
  15. ↑ Raynolds, L. T.: 2009, ‘Mainstreaming Fair Trade Coffee: from Partnership to Traceability’, World Development, 37 (6) p1089.; Valkila, J., Haaparanta, P., & Niemi, N.: 2010, ‘Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers’, Journal of Business Ethics, 97, p264.; Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3018-3025.; Utting, K.: 2009, ‘Assessing the impact of Fair Trade Coffee: Towards an Integrative Framework’, Journal of Business Ethics, 86, p139.; Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3022-3023.; Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, pp 12, 21.; Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs. (e.g. p67); Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October. Jacquiau, C. ( 2006 ). Les Coulisees du Commerce Équitable. Paris: Mille et Une Nuits.; Jacquiau, C. (2007). Max Havelaar ou les ambiguïtés du commerce équitable: Pourquoi le Sud rue dans les brancards. Monde Diplomatique September.; Hamel, I.: 2006, ‘Fairtrade Firm Accused of Foul Play’, Swiss Info http://www.swissinfo.ch/eng/Fair_trade_firm_accused_of_foul_play.html?cid=5351232 23/12/2009.; Weitzman, H. (2006, August 9). ‘Fair’ coffee workers paid below minimum wage. Financial Times .; Weitzman, H. (2006, September 9). ‘'Ethical-coffee’ workers paid below legal minimum. Financial Times .; Weitzman, H.: 2006, The bitter cost of ‘Fair Trade’ coffee. Financial Times, September 8.; Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, p12.; Moore, G., Gibbon, J., & Slack, R.: 2006, ‘The mainstreaming of Fair Trade: a macromarketing perspective’, Journal of Strategic Marketing, 14, 329-352.
  16. ↑ http://fairtrade.org.uk/en/media-centre/news/april-2015/cooperative-commitment-to-fairtrade-remains-strong
  17. ↑ http://www.co-operative.coop/our-ethics/fairtrade/
  18. 1 2 http://www.fairtrade.org.uk/en/media-centre/news/december-2014/fairtrade-sales-hold-steady-despite-supermarket-price-wars
  19. ↑ The Guardian (February 25, 2008) Fairtrade sales soar in Britain. URL accessed on February 25, 2008.
  20. ↑ Just-food (2008). [UK: Awareness of fairtrade symbol rises to 70% http://www.just-food.com/article.aspx?id=102331]
  21. ↑ House of Commons International Development Committee (June 5, 2007) Fair Trade and Development. URL accessed on June 20, 2007.
  22. ↑ Sunday Mirror . URL accessed on February 24, 2008.

External links

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