Fairtrade(one word) redirects here. For the more general article on the fair trade movement, see fair trade(two words)."
Fairtrade certification (Fairtrade or Fair Trade Certified in the
US) is a product certificationsystem designed to allow people to identify products that meet agreed environmental, labour and developmental standards. Overseen by a standard-setting body, FLO International, and a certification body, FLO-CERT, 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 Fairtrade Certification Markfor those products.
FLO InternationalFairtrade certification system covers a growing range of products, including bananas, honey, oranges, cocoa, coffee, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, teaand wine.
In 2007, Fairtrade certified sales amounted to approximately €2.3 billion (US $3.62 billion) worldwide, a 47% year-to-year increase. [Fairtrade Labelling Organizations International (2008). [http://www.fairtrade.net/uploads/media/FLO_AR2007_low_res_01.pdf FLO International:Annual Report 2007] . Accessed June 16, 2008.] Sales are further expected to grow significantly in the coming years: according to the 2005 Just-Food Global Market Review, Fairtrade sales should reach US$ 9 billion in 2012 and US$ 20-25 billion by 2020. [Just-Food Global Market Review, 2005]
As per December 2007, 632 producer organizations in 58 developing countries were
FLO-CERTFairtrade-certified.. [Fairtrade Labelling Organizations International (2008). [http://www.fairtrade.net/uploads/media/FLO_AR2007_low_res_01.pdf FLO International:Annual Report 2007] . Accessed June 16, 2008.]
Although many attempts to market Fairtrade products were observed in the 1960s and 1970s, Fairtrade sales only really took off with Fairtrade labelling in the late 1980s.
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 dedicated 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.
At the initiative of Mexican
coffeefarmers, the first Fairtrade labelling initiative, Stichting Max Havelaar, was launched in the Netherlandson November 15, 1988 by Nico Roozen, Frans van der Hoffand Dutch ecumenical development agency Solidaridad. The initiative offered disadvantaged coffee producers following various social and environmental standards an above market price for their crop. The coffee, originating from the UCIRI cooperative in Mexico, was imported by Dutch company Van Weely, roasted by Neuteboom, sold directly to worldshopsand, for the first time, to mainstream retailers across the Netherlands.
The initiative was groundbreaking as for the first time Fairtrade coffee was being offered to a larger consumer segment. 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
The initiative was a great success and was replicated in several other markets: in the ensuing years, similar non-profit Fairtrade labelling organizations were set up in other European countries and North America, called “Max Havelaar” (in
Belgium, Switzerland, Denmark, Norwayand France), “Transfair” (in Germany, Austria, Luxemburg, Italy, the United States, Canadaand Japan), or carrying a national name: “Fairtrade Mark” in the UKand Ireland, “Rättvisemärkt” in Sweden, and "Reilu kauppa" (Finnish) or "Rejäl handel" (Swedish) in Finland.Initially, while the Max Havelaars and the Transfairs co-operated product by product with equivalent standards and producer lists there was no contractual agreement to ensure global standards. In 1994, a process of convergence among the labelling organizations – or “LIs” (for “Labelling Initiatives”) – started with the establishment of a TransMax working group, culminating in 1997 in the creation of Fairtrade Labelling Organizations International. FLOis 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.
FLOlaunched a new International Fairtrade Certification Mark, effectively replacing most previous Max Havelaar and TransFair certification marks. The goals of the launch were to improve the visibility of the Mark on supermarket shelves, facilitate cross border trade and simplify export procedures for both producers and exporters.
Fairtrade Certification Markharmonization process is still under way – today, all but two Labelling Initiatives (namely Transfair USA& TransFair Canada) have adopted the new International Fairtrade Certification Mark. Full transition to the new Fairtrade Mark should become reality as it gradually replaces the old certification marks at various speeds in the two countries.
In January 2004,
Fairtrade Labelling Organizations Internationalwas divided into two independent organizations: FLO International, which sets Fairtrade standards and provides producer business support, and FLO-CERT, which inspects and certifies producer organizations. The aim of the split was to ensure the impartiality, the independence of the certification process and compliance with ISO65 standards for product certification bodies.
At present, over 23 labelling initiatives and producer networks are members of
FLO International. There are now Fairtrade Certification Marks on dozens of different products, based on FLO’s certification for coffee, tea, rice, bananas, mangoes, cocoa, cotton, sugar, honey, fruit juices, nuts, fresh fruit, quinoa, herbsand spices, wineand footballs etc.
Given the development focus of Fairtrade,
FLO Internationalstandards contain minimum requirements that all producer organisations must meet to become certified as well as progress requirements in which producers must demonstrate improvements over time.
There are two types of Fairtrade standards for disadvantaged producers: standards for small farmers' organizations and for hired labour situations. Fairtrade standards for small farmers' organizations include requirements for democratic decision making, ensuring that producers have a say in how the Fairtrade Premiums are invested etc. They also include requirements for capacity building and economic strengthening of the organization.
Fairtrade standards for hired labour situations ensure that workers receive decent wages and enjoy the freedom to join unions and bargain collectively. Fairtrade-certified
plantations must also ensure that there is no forced or child labourand that health and safety requirements are met. In a hired labour situation, Fairtrade standards require a “joint body” to be set up with representatives from both management and workers. This joint body decides on how Fairtrade premiums will be spent to benefit plantationworkers.
For some products, such as
coffee, only Fairtrade standards for small farmers' organizations are applicable. For others, such as tea, both small farmers' organizations and plantations can be certified.
Fairtrade standards and procedures are approved by the
FLO InternationalStandards Committee, an external committee comprising all FLO stakeholders (labeling initiatives, producers and traders) and external experts. Fairtrade standards are set by FLO Internationalin accordance to the requirements of the ISEAL Code of Good Practice in standard setting and are in addition the result of a consultation process, involving a variety of stakeholders: producers, traders, external experts, inspectors, certification staff etc. [Fairtrade Labelling Organizations International (2006). [http://www.fairtrade.net/standard_setting.html Standard Setting] . Accessed October 4, 2006.]
Fairtrade inspection and certification
Fairtrade inspection and certification are carried by
FLO-CERT, an independent body created by FLOin 2004. FLO-CERT ensures that both producers and traders comply with the FLO InternationalFairtrade Standards and that producers invest the benefits received through Fairtradein their development. FLO-CERTworks with a network of 72 independent inspectors that regularly visit producer and trade organizations and report back to FLO-CERT. All certification decisions are then taken by a Certification Committee, composed of stakeholders from producers, traders, national labelling organisations and external experts. An Appeals Committee handles all appeals. FLO-CERTinspections and certification follow the international ISO standards for product certification bodies (ISO 65).
The Fairtrade system is distinct from other ethical trading schemes as it provides producers two major monetary benefits: the Fairtrade Minimum Price and the 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
marketprices 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-CERTfor the use of this money. It is generally used for improvements in health, educationor 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 not 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 scaleare missing or often the products are differentiated due to their organic farmingpractices etc. [The Fairtrade Foundation. (2006). [www.fairtrade.org.uk/downloads/pdf/Fairtrade_and_supply_chain.pdf Review of UK supply chain, returns to producers, and retail margin issues] . Accessed December 31, 2006.]
Fairtrade impact studies
Several independent studies have recently measured the impact of fair trade on disadvantaged farmers and workers. The following studies are described and discussed on the
Fair trade impact studiespage.
*Brewing Justice: Fair Trade Coffee, Sustainability and Survival
*The Impact of Fair Trade on Producers and their Organizations: A Case Study with Coocafe in Costa Rica
*One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America
*Étude d'impact du commerce équitable sur les organisations et familles paysannes et leurs territoires dans la filière café des Yungas de Bolivie
*Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Small-Scale Farmer Vulnerability in Northern Nicaragua?
*Fair Trade on marginalised producers: an impact analysis on Kenyan farmers
*Assessing the Potential of Fair Trade for Poverty Reduction and Conflict Prevention: A Case Study of Bolivian Coffee Producers
Fairtrade certification's increasing popularity has drawn criticism from both ends of the
Scope of Fairtrade
The Economist" magazine criticized Fairtrade certification in its December 7, 2006 issue, claiming that Fairtrade “certification is predicated on political assumptions about the best way to organise labour. In particular, for some commodities (including coffee) certification is available only to co-operatives of small producers, who are deemed to be most likely to give workers a fair deal when deciding how to spend the Fairtrade premium. Coffee plantationsor large family firms cannot be certified."The Economist. December 7, 2006. [http://www.economist.com/business/displaystory.cfm?story_id=8380592 Voting with your trolley] . Accessed 31 December 2006.]
Fairtrade supporters, such as
Oxford Universityprofessor Alex Nicholls, respond to this criticism by arguing that the certification program was created in the first place to address market failuresaffecting small farmers' organizations. As opposed to plantationsfor example, perfect market information, perfect access to markets and credit, and the ability to switch production techniques and outputs in response to market information are fundamental assumptions which are fallacious in the context of small farmers' organizations in the developing world. [Nicholls, A. & Opal, C. (2004). Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications. p18] Fairtrade is seen as an attempt to address these market failures by providing to the most in need a stable price for their crop, business support, access to premium Northern markets and better general trading conditions.
Mainstreaming of Fairtrade
Criticism: On the other end of the spectrum, some believe Fairtrade certification bodies are not radical enough. French author
Christian Jacquiau, in his book "Les coulisses du commerce équitable", calls for stricter Fairtrade standards and criticizes Fairtrade labelling organizations, especially Max Havelaar France, for working within the current system (i.e. partnerships with mass retailers, multinational corporations etc.) rather than establishing a new fairer, fully autonomous trading system. Jacquiau is also a staunch supporter of significantly higher fair trade prices in order to maximize the impact, as most producers only sell a portion of their crop under Fairtrade terms. He defends in his book a minority of fair trade networks (such as "Minga" or "Artisans du monde" in France) that he believes have higher ethical value [Jacquiau, Christian (2006). Les Coulisses du Commerce Équitable. Éditions Mille et Une Nuits. Paris.] .
* [http://www.fairtrade.net/ FLO International]
* [http://www.flo-cert.net FLO-CERT]
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