CANTERBURY DISTRICT FAIRTRADE NETWORK

About Fairtrade

Here are just a few of the most commonly asked questions

about Fairtrade and how it benefits those involved

Q. Is there a difference between Fairtrade and fair trade?

 

A. Yes. "Fairtrade", written as one word with a capital "F", is used on products which have met international standards of Fairtrade and carry the FAIRTRADE Mark. It is also used for campaigns to raise awareness of the FAIRTRADE Mark, such as the Fairtrade Diocese and Fairtrade Town campaigns. "Fair trade", written as two words, is a broader concept. It refers to the wider campaign to make international trade rules fairer for poor countries. It is also used to describe "fairly traded" products for which international Fairtrade standards have not yet been agreed, eg handicrafts.

 

Q. Is Fairtrade a brand?

 

A. No, Fairtrade is not a brand. The FAIRTRADE Mark is registered trademark which is awarded to individual products, not companies, which meet internationally agreed standards of Fairtrade. Some companies, such as Nestlé, have a few  products which meet Fairtrade requirements. Others have a range of Fairtrade products, eg Clipper tea. A few, such as Cafédirect, are exclusively Fairtrade and act as Fairtrade's "gold standard".

 

Q. How do we know that Third World farmers really benefit?

 

A. Credibility has always been at the heart of the Fairtrade system. In fact, Fairtrade certification was developed precisely to guarantee the credibility of "fair trade" claims. The international Fairtrade labelling network includes an elaborate system of checks and audits to make sure that the Third World farmers actually receive the benefits which are due to them and that Fairtrade certified products really do emanate from Fairtrade sources. The Fairtrade Foundation is responsible for carrying out the necessary audits in this UK. Its partner organisation, Fairtrade Labelling Organisations International (FLO), carries out the audits in the country of origin and all along the supply chain to the point where the products enter the UK.

 

Q. Are all Third World products eligible for Fairtrade certification?

 

No. Extensive research and consultation are required before international Fairtrade standards can be agreed. Agricultural products were the first products to be certified, notably cocoa, coffee, fruit, honey, nuts/oil, quinoa, rice, spices, sugar, tea and wine. Criteria for four non-food products have also been established: cotton, flowers, ornamental plants and sports balls. Criteria for a number of other product categories are in the process of development.

 

Q. Surely it's the supermarkets who are the real beneficiaries of Fairtrade?

 

A. The Fairtrade Foundation has no power to control the prices which supermarkets charge for Fairtrade products. Indeed, it would be against UK competition law for it to try to do so. What it does do, in conjunction with its partner organisations, is to ensure that Third World farmers receive:

 

• A guaranteed price for their products;

• A dividend (for projects to benefit the local community);

• Partial advance payments, if required;

• Contracts that allow for long-term planning and sustainable production practices.

 

Fairtrade products are generally slightly more expensive than their non-Fairtrade equivalents. The difference in price reflects the added benefits to the Third World farmers, the costs of administering the Fairtrade certification system and the increased costs for supermarkets of dealing in relatively small quantities. Some supermarkets, such as the Co-op, also invest considerable sums of money in the promotion of Fairtrade. Others, such as Waitrose, have taken huge steps to help Third World producers in their conversion to Fairtrade status. On the face of it, the amount which a Third World farmer receives may seem small when considered as a percentage of the final retail price. But for producers, it often represents a doubling or even a tripling of their real income. The final retail price also incorporates the costs of transport, processing, packaging and retailing, most of which occur outside the country of origin.

 

If you are worried that supermarkets are overcharging for Fairtrade products, raise it with the manager and shop around. Prices vary from one supermarket to the next; and own-brand Fairtrade products are frequently much cheaper than their branded counterparts. As the demand for Fairtrade products grows, the ability of supermarkets to bring down prices increases.

 

Q. Does Fairtrade disadvantage our own farmers?

 

A. No. Most Third World commodities, eg tea, coffee, cocoa and bananas, simply don't grow in temperate climates. Many Fairtrade campaigns, including Canterbury's Fairtrade District campaign, encourage support for both Fairtrade and local produce. The two go hand in hand, as the problems facing small-scale farmers in the Third World and in this country have much in common. Perhaps the main exception is that when commodity prices fall, Third World farmers rarely have any state-funded health system or social security system to fall back on.

 

Q. What percentage of the retail price goes back to the producer?

 

A. It is impossible to calculate the percentage of the retail price which goes back to the producer as this varies considerably from one brand to the next. Different retailers operate with different profit margins for different products, so comparisons are often difficult. Under British and European competition law, it would be illegal for the Fairtrade system to try to control retail prices. The only price which the Fairtrade system can control is the price which is paid to the Third World producers. This is set in consultation with the producers, at a level which ensures that they can both sustain their livelihood and remain competitive on world markets. The producer always receives the agreed price, whatever the retail price.

 

Q. Are Fairtrade and Free Trade compatible?

 

A. Yes they are. However, Fairtrade recognises the fact that the free market cannot work effectively if Third World producers lack the capacity to gain access to international markets at a fair price and if consumers lack the knowledge to select products which provide a sustainable livelihood to Third World farmers. Fairtrade is a market mechanism which seeks to overcome these two problems. It builds up the capacity of producers to market their products internationally and it informs shoppers how they can use their consumer power to benefit marginalised Third World producers.

 

Q. How large is the Fairtrade market in the UK?

 

A. Fairtrade is one of the fastest growing retail sectors in the UK today, doubling in value every 2 years. The UK has more Fairtrade products than any other country. In 2007, the UK market for Fairtrade products reached an estimated retail value of £493 million. While this represents a small fraction of total retail trade figures, Fairtrade products generally account for between 1% and 20% of all sales in their product categories. For example, around 20% of roast and ground coffee, and 20% of bananas sold in the UK are now Fairtrade.

 

Q. How large is the global Fairtrade market?

 

A. Worldwide, the Fairtrade market is growing steadily, but is still very small in terms of total world trade. The shortage of global markets for Fairtrade produce means that many registered Fairtrade producers groups can only sell a small proportion of their produce into the Fairtrade market. The more Fairtrade products we buy, and the more we can encourage others to buy, the greater the positive impact will be.

 

Q. How about environmental protection?

 

A. International Fairtrade criteria include environmental standards as part of the process of registering producer groups. The standards require producers to work to protect the natural environment and make environmental protection an integrated part of farm management. Producers are also encouraged to minimise the use of energy, especially energy from non-renewable sources. Fairtrade Premiums are often used to develop sustainable techniques which can help in the conversion to organic agriculture.

 

Q. What about Food Miles?

 

A. The contribution of Fairtrade products to UK food mile emissions (C02 emissions resulting from food transportation) is small as the vast majority of Fairtrade products are transported to the UK by ship which causes significantly less carbon emissions than air freight. Fairtrade roses are currently the only Fairtrade product to be flown into the UK and they account for just 0.8% (by weight) of all Fairtrade imports. Growing roses in heated greenhouses in Northern climates can cause considerably more CO2 emissions than importing them from Africa.

 

Most Third World farmers have a very small carbon footprint, and it would be unfair to penalise them for the carbon-intensive lifestyles of developed countries. The average African citizen emits only 0.9 tonnes of CO2 per year, while the average UK citizen emits 9.2 tonnes and the average US citizen 20.1 tonnes. Trade can also bring enormous benefits to Third World countries. Up to one and a half million Africans are estimated to be dependent on UK consumption of their agricultural and horticultural produce.

 

Q. And Genetically Modified Organisms?

 

A. The Fairtrade system's environmental standards and guidelines explicitly forbid the use of GM seeds by farmers. The standards also require active monitoring of neighbouring fields, and where necessary, additional precautions to ensure that crops are not contaminated by cross-pollination.

 

For further questions and answers on Fairtrade, see the Fairtrade Foundation's website: www.fairtrade.org.uk/what_is_fairtrade/faqs.aspx