FAIRTRADE: It’s a matter of fairness, stupid

Thoughts often leap to commodities when it comes to fair trading: fruit; tea and coffee; sugar; and chocolate. The Fairtrade Foundation and brand have achieved considerable success in these areas. UK sales of products using the Fairtrade label reached more than £1bn this year and the Fairtrade Foundation aims to double that by 2012, says Mark Varney, business development director.

Big brands are muscling in on the action. In autumn 2009, Cadbury's Dairy Milk adopted the Fairtrade mark and Starbucks has announced that all its UK and Ireland stores would serve 100% Fairtrade-certified coffee in all espresso-based beverages.

Research by brand agency 1HQ indicated that some consumers feared the involvement of big business could dilute Fairtrade's high ethical stance, says Tom Ellis, 1HQ's strategy and research director. But, on balance, shoppers have reacted favourably to these high-profile developments he said, sharing the results of its panel-based study at the Food and Drink Innovation Network's Fairtrade seminar in Daventry in July.

All this prominent Fairtrade activity and sales growth is contributing to rising consumer awareness of ethical topics. This, in turn, strengthens the Fairtrade cause, but also raises questions about how the movement relates to other moral concerns. For example, what is the relationship between sourcing supplies from Fairtrade producers in, say, Ghana, and pressures to source food more locally to safeguard food security and reduce freight transport greenhouse gas emissions? There's also the issue of how other ethical certification schemes such as organic, animal welfare and environmental labels relate to the Fairtrade movement.

Recognising Fairtrade's limits​

Tom MacMillan, executive director at the Food Ethics Council, says it's important to trace the beginnings of Fairtrade and to recognise its limitations. It was set up to improve fairness between producersupplier relationships, particularly where poor parts of the world were open to exploitation by richer parts, he says. It predominantly covered pay and working conditions. "We shouldn't pin problems on Fairtrade that it was not set up to deal with. It's trying to improve supply chain relationships rather than trying to answer all these other questions," says MacMillan.

Take the issue of whether the Fairtrade movement risks leading poorer global communities to rely too much on exports, while failing to address their own food security needs. This partly comes down to how a country's infrastructure has been set up, which is an issue for national government, not non-governmental organisations. "One overall message about the challenges faced by Fairtrade is that they are indicative of bigger challenges faced by governance," says MacMillan.

That said, the Fairtrade Foundation says setting up profitable Fairtrade producer communities often leads to increased national profitability and enhanced ability to provide for indigenous needs.

Significantly, the language of sustainability is cropping up more in the context of the concept of fair trading and this may indicate future directions for the movement.

Ron Mathison, md of Finlays, a major Fairtrade-certified producer, manufacturer and supplier of tea, tea extracts, fresh produce and flowers, says: "Our vision is of business and communities thriving together in a future that is environmentally sustainable and socially just. We take an active leadership role in addressing sustainability issues. By adopting a collaborative approach to address challenges and policy, we aim to demonstrate and provide best practice; proactively supporting an equitable and ethical trading environment for our products."

A spokeswoman for the business adds: "All these aspects of our sustainability strategy are covered by Fairtrade and the brand has good consumer recognition and understanding."

A new lobbying group, Fairfood, has sprung up, with sustainability as its watchword. Based in the Netherlands, Fairfood embraces social justice, including fair pay and working conditions, alongside concerns about degradation of natural ecosystems and unsustainable use of cultivated land.

The Fairtrade Foundation recognises areas of overlap with some ethical issues, especially where it comes to cutting the costs of certification and avoiding duplicating certification procedures. Consequently, there has been talk of amalgamating various schemes and standards. A spokesman for the Fairtrade Labelling Organisations Certification body (FLO-CERT) says: "We certify plantations that are already organic. There are global efforts being made to harmonise organic certification and we're trying to explore synergies on organic products."

There might be room to work more closely with other certifying organisations championing environmental causes, although this might not lead to amalgamating brands, says Varney.

Ethical issues​

As consumer awareness of ethical issues grows, so does the variety and volume of supply for fairly traded ingredients.

In the past, inadequate supply has been an obstacle. MacMillan says: "Three or four years ago, either industry demand for Fairtrade [-certified products] ran ahead of supply or in some instances, produce grown under Fairtrade conditions wasn't ending up in that market."

Andrew Kuyk, director of sustainability and competitiveness at the Food and Drink Federation, says the process of developing a certified Fairtrade supply chain can take years. "There will be technical factors, around availability and continuity of supply and factors around prices," he says. Negotiating fair pay and conditions can take time, and talks still need to be conducted with retailers as well as producers in that regard.

However, the climate is changing. Broad Fairtrade coverage of a range of ingredients is no longer sheer fantasy, says Mark Varney, business development manager at the Fairtrade Foundation. "One of the things that will happen in the future is that nuts, dried fruit and things like orange and lemon ingredients used in composite products will become increasingly [Fairtrade-] certified," he says. "Our vision, which will evolve over time, is, yes, to see more Fairtrade chocolate, but also more cakes, biscuits and ice cream."

Ice cream maker Ben & Jerry's has blazed a trail here, says Varney. The company has made big commitments to source significant volumes of Fairtrade ingredients, such as nuts from Liberation Nuts and fruit from AgroFair.

Supply may be improving, but the complexity and cost of the Fairtrade certification scheme remains a challenge. Finlays is fully supportive of Fairtrade branding and certification, but simplicity remains the watchword, says a company spokeswoman. "Keeping regulation simple but effective is the best way forward". Referring to the certification process, she adds: "It could be simpler and we are in constant communication and enjoy a good relationship with all our certification bodies to learn and build on better, more user-friendly and cost-effective ways to improve the process."

Fairtrade proponents would also argue that any reliable certification scheme needs to be rigorous and detailed, and that the complexity hasn't stopped a range of manufacturers from completing the process.

There are two certification schemes: one for farmerproducers and one for traders (manufacturers, exporters and importers). There are 24 national Fairtrade labelling initiatives. The Fairtrade Foundation is the UK body dealing with such issues. The umbrella organisation co-ordinating all the international bodies is Fairtrade Labelling Organisations International (FLO). For UK manufacturers selling a Fairtrade product solely nationally, the Fairtrade Foundation conducts certification audits. UK firms trading internationally would have to deal with FLO-CERT.

Compliance criteria​

FLO-CERT sets compliance criteria, conducting a scope check before inviting an official application. After an application has been made, it carries out an official audit, criteria for which are set out on its website (www.flo-cert.net). Major criteria (marked with an 'm' on the site) are checked in the beginning. Later audits use these as well as progress criteria. There are specific standards for composite products.

Where available, all ingredients for Fairtrade products must be from certified producers, or up to 50%, depending on the country. A list of certified suppliers is also available on the website. "If you're a trader, you can start trading for the first six months after you have made an application for audit," says the FLO-CERT spokesman. Farmers can start selling their products as Fairtrade only after they have been certified.

For manufacturers, the cost for audit and certification is 2,730 per factory. Certification lasts for three years. For farmers it can range from 30 euro cents to 30, although up to 75% of their costs can be subsidised by FLO.

So Fairtrade processes are becoming more well known, the Fairtrade supply base is increasing and consumers awareness of ethical issues is becoming more sophisticated. All this means manufacturers will struggle to avoid committing to it in some form in the future.

*Food Manufacture is organising a conference in London on November 29 on the Sustainable Food Supply Chain. Click here ​for details.​