Fairtrade labelling

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For other uses of "fair trade", see fair trade.

International Fairtrade Certification Mark

Fairtrade labelling (usually simply Fairtrade or Fair Trade Certified) is a Certification system designed to allow consumers to identify goods (especially agricultural products such as coffee) which meet agreed standards. Overseen by an international umbrella organisation, the Fairtrade Labelling Organizations International (FLO), the system involves independent auditing of producers to ensure the agreed standards are met. Companies offering products that meet the Fairtrade standards may apply for licences to use the fair trade label for those products.

The FLO Fairtrade certification system covers a growing range of products, including bananas, honey, oranges, cocoa, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea and wine.

In 2005, Fairtrade labelled sales amounted to approximately €1.1 billion worldwide, a 37 % year-to-year increase. As per December 2005, 508 certified producer organizations in 58 developing countries were FLO Fairtrade certified.[link] That represents more than one million producers and five million people, including dependents, benefiting from Fairtrade.

Contents

1 History
2 Fairtrade Standards
3 Fairtrade Pricing
4 Nestlé controversy
5 See also
6 External links

6.1 Fair Trade Networks
6.2 Fairtrade Labelling Organizations Members:
6.3 Associate Fairtrade Labelling Organizations Member:

History

Although many attempts to market Fairtrade products were observed in the 1960s and 1970s, Fairtrade sales only really took off with Fairtrade labelling.

Fairtrade sales prior labelling initiatives were contained to relatively small World shops (also called charity shops), operated by Alternative Trade Organizations (ATOs) such as Oxfam and Traidcraft. Many felt that these World shops were too disconnected from the rhythm and the lifestyle of contemporary developed societies. The inconvenience of going to them to buy only a product or two was too high even for the most militant customers. The only way to increase sale opportunities was to start offering Fairtrade products where consumers normally shop, in the large distribution channels. The problem was to find a way to expand distribution without compromising consumer trust in Fairtrade products and in their origins.

Early Fairtrade Certifications Marks

At the initiative of Mexican coffee farmers, the first Fairtrade label, Max Havelaar, was launched in 1988 by Dutch development agency Solidaridad.

The independent certification allowed the coffee to be sold outside World shops and in supermarkets and mass-retailers, reaching a larger consumer segment and boosting Fairtrade sales significantly. Fairtrade labelling also allowed consumers and distributors alike to track the origin of the goods to confirm that the products were really benefiting the farmers at the end of the supply chain.

The concept caught on: within years, similar Fairtrade labelling organizations such as the Fairtrade Foundation, [TransFair] and [Rättvisemarkt], emerged across Europe and North America in an effort to follow Max Havelaar’s footsteps and boost Fairtrade sales. The organizations, who launched their own campaigns and Certifications marks, originally operated independently.

In 1997, these organizations created Fairtrade Labelling Organizations International (FLO), an umbrella organization whose mission is to set the Fairtrade standards, support, inspect and certify disadvantaged producers and harmonize the Fairtrade message across the movement.

In 2002, FLO launched a new International Fairtrade Certification Mark. The goals of the launch were to improve the visibility of the Mark on supermarket shelves, convey a dynamic, forward-looking image for Fairtrade, facilitate cross border trade and simplify procedures for fresh fruit growers.

The Fairtrade Certification Mark harmonization process is still under way – as of July 2006, all but three National Initiatives (namely Transfair USA, [Transfair Canada] and [Max Havelaar Switzerland]) have adopted the new International Fairtrade Certification Mark. Full transition to the new Mark should become reality as it gradually replaces the old Certification Marks at various speeds in various countries.

Fairtrade Standards

Standards are set by the FLO on behalf of a number of national bodies (such as the Fairtrade Foundation in the UK) for each type of product. Typically standards cover labor standards and environmental standards.

For a product to obtain FLO Fairtrade certification, it must meet the following criteria:

Direct trade: The product is purchased by a Northern trader as directly as possible from the producer (with few or no intermediaries).

Fair price: The product is purchased at a constant and stable price (Fairtrade minimum price). An additional bonus is paid for products that are certified organic.

Long term commitment: When purchasing a product, the trader is also committing to a long term relationship with the producer/seller.

Access to credit: Upon request, producers may have access to credit of up to 60% of the purchase price or to pre-payment.

Democratic and transparent organizations: Fairtrade certified products come from producers that are managed democratically and with the utmost transparency, or from plantations that enable workers to organize and bargain collectively.

Environmental protection: Producers abide by sustainable farming methods that also respect the environment. A large percentage of Fairtrade certified products are also certified organic.

Local community development: In addition to the fairtrade guaranteed minimum price, a social Premium is paid to the producer and is invested in projects meant to improve the local communities’ health, education, environment and economy.

A complete list of criteria for inclusion in the fairtrade network can be found on the Fairtrade Labelling Organizations' website [link].

Fairtrade standards and procedures are approved by the FLO Standards Committee, an external committee comprising all FLO stakeholders (national members, producers and traders) and external experts. Fairtrade standards are set in accordance to the requirements of the ISEAL Code of Good Practice in standards setting and are in addition the result of an extensive consultation process, involving a variety of stakeholders: producers, traders, external experts, inspectors, certification staff etc.

Fairtrade Pricing

FLO Certified Fairtrade Coffee Producer in Uganda

The Fairtrade system guarantees a better deal to the disadvantaged producer by offering them two major monetary benefits: a Fairtrade Minimum Price and a Fairtrade Premium.

The Fairtrade Minimum Price is a guaranteed price that covers the cost of sustainable production. The set Fairtrade Price is always the minimum price paid but rises if market prices are higher.
The Fairtrade Premium is a separate payment designated for social and economic development in the producing communities. The producers themselves decide how these funds are to be spent. As part of the Fairtrade criteria, registered producers are accountable to FLO for the use of this money. It is generally used for improvements in health, education or other social facilities, although it may also be used for certain development projects to enable growers to improve productivity or reduce their reliance on single commodities.

It is worth mentioning that the Fairtrade premium and the Fairtrade Minimum price do no always significantly increase the end price paid by consumers for a product. There are other factors to consider when considering the price structure of Fairtrade products: sometimes economies of scale are missing or often the products are of a superior quality due to their organic farming practices etc.

Nestlé controversy

One of the most divisive issues within the past couple of years has undoubtedly been the launch of Nestlé's first Fairtrade coffee: [Partners Blend]. Nestlé has been the subject of a consumer boycott campaign for a number of years due to their allegedly unethical business practices (see Nestlé boycott). [Baby Milk Action], an organization campaigning to raise awareness of this boycott, issued a press release [link] criticizing the Fairtrade Foundation's decision to award Nestlé the Fairtrade mark.

The Fairtrade Foundation justified its position in a press release [link], explaining how [Partners Blend] has complied with "all the internationally agreed standards for Fairtrade certification". The Foundation further declared that the Fairtrade Mark is given to "individual products and not to companies" and that "this mark is not an endorsement" of Nestlé or any of its other activities.

External links

Fair Trade Networks