Posted on May 27th 2015 by Maddie
Fairtrade is about acknowledging all participants in the global community as having rights and responsibilities. Fairtrade creates opportunities for the most disadvantaged producers to move out of extreme poverty by creating market access under beneficial rather than exploitative terms.
The basic principle is that workers and producers of Fairtrade goods aren’t exploited or underpaid. When you choose products with the Fairtrade mark you’re supporting farmers and craftspeople in developing countries and improving their standard of living.
Fair Compensation for Products and Labour
Arabica coffee is bought and sold on the Intercontinental Exchange (ICE). Supply and demand dictates the price of future coffee contracts. Coffee falls victim to high price volatility; fluctuating wildly with speculation. The farmer’s actual cost of producing coffee is not taken into account.
Fairtrade offers farmers better trading conditions. With certification, coffee producers are offered a minimum price that covers the costs of sustainable production.
There is a floor price of 1.40 USD per pound for Fairtrade certified washed Arabica coffee. In addition a Fairtrade Premium of 0.20 USD per pound is added to the purchase price. This premium received by the Cooperatives is spilt between infrastructure investment and social services; with democratic organizations voting on the latter.
Since Kicking Horse® Coffee only purchases Fairtrade Organic coffee, we also pay a 0.30 USD differential for Organic. Farmers use sustainable agricultural techniques including composting coffee pulp, rotating crops, and not applying chemicals and fertilizers. Eighty-five percent of Fairtrade Certified Coffee is also Organic and shade-grown.
The Power of Certification
Fairtrade International (FLO), the global umbrella organization for Fairtrade, has vigorous standards that all products need to meet to qualify for certification. As well, specific industries, coffee included, will have additional guidelines.
FLO has been around since 1997 and has implemented a comprehensive system of monitoring. In 2004. FLO spilt into two independent organizations. In addition to FLO, there is now FLOCERT, which is responsible for inspecting and certifying producer organizations and audits traders.
FLO’s main objectives are developing and reviewing Fairtrade Standards, helping producers to gain Fairtrade certification and developing market opportunities, as well as coordinating global Fairtrade strategy.
Whereas FLOCERT is the independent certifier of the Fairtrade mark, FLO will have established the Fairtrade Standards, and FLOCERT is responsible for ensuring compliance and that producers are receiving the Fairtrade minimum price and premium.
Guaranteeing the integrity of the Fairtrade mark, FLOCERT auditors are highly qualified and familiar with the local cultures and legal systems of the regions they work.
Before any producer can sell Fairtrade certified products they must first have an on-site audit. After the initial visit, producer organizations are physically audited a least twice in a three-year certification cycle. Plus along with these regular audits, FLOCERT also will conduct regular unannounced audits. Each audit requires a report which is sent to FLOCERT for evaluation and approval.
From farmers and producers the auditing continues on the supply chain. Traders and companies wishing to sell Fairtrade products must also be audited. At least twice in a three-year certification cycle and unannounced FLOCERT will conduct audits.
Any product with the Fairtrade mark is accountable to these strict guidelines. Both of these organizations ensure the traceability and transparency.
The main driver behind the development of a Fairtrade market has been the growth of ethical consumerism. Sales of Fairtrade products have grown exponentially in recent years as consumer interest and demand has risen.
The communication revolution and technological innovations are linking communities all around the globe. Concern about sustainability of production and environmental impact has morphed into awareness of social well-being.
Fairtrade's rapid growth shows the commercial viability of an approach to business based on transparency and respect. Purchasing Fairtrade gives consumers a direct way to help reduce poverty around the world. It’s more than just trade. It’s about relationships between buyers and sellers.