Page 42

Fair trade, not ‘aid’


hile fair trade has its advo-

out of their control relating to market conditions.

to combat this issue is to be more selective

cates and sceptics, its aim

Fair trade plays a role in producers devel-

when certifying organisations; in particular, it

is generating and producing

oping a more sustainable approach to natural

should only certify organisations that empower

positive impacts and benefits

resource management which can lead to a posi-

farmers right up the supply chain, giving them

for producers in the develop-

tive environmental impact. Meeting Fairtrade

a sense of value-add from their work and a

Standards set by Fairtrade International has

voice in decision-making.

ing and developed world.

resulted in many countries in improved pro-

Increasing commodity prices is another

The Fair Trade Advocacy office defines fair

duction practices and environmental projects.

challenge for the fair trade movement. The

trade as a “trading partnership, based on

It also provides a pathway for farmers and

price of a cup of coffee seems exorbitant,

dialogue, transparency and respect that seeks

small farmer organisations to have increased

but this is the market price. If a farmer can

greater equity in international trade. It contrib-

management and negotiating responsibilities.

sell a pound of commodity coffee for $3 as

utes to sustainable development by offering

While the fair trade movement has driven

opposed to a fair trade price of $2, the farmer

better trading conditions to, and securing the

consumer awareness and demand for socially

may choose the market price. This challenge

rights of, marginalised producers and workers — especially in developing countries.”

Farmers need to be empowered with a sense of ownership

However, fair trade is more than just a

in fair trade and this could be accomplished with fair

trading partnership; it hinges on a concerted

trade re-engaging the farmer at a grassroots level.

social push to develop procedures and standards for production practices and delivery, wages, working conditions, environmental health, and social policies and metrics in the

and environmentally sourced products, it has

is combined with another issue of taste, which

supply chains of certified goods.

its challenges. Overall, I believe the biggest

is sometimes a criticism of fair trade products

To be pedantic, there are some small but

challenge is around integrating sustainability

such as coffee and tea. Some of the fair trade

critical differences in terminology. Fair trade

and transparency into the entire fair trade

tea and coffee I have tasted in the past hasn’t

is used to refer to the fair trade movement

value chain.

been the best.

as a whole and the organisations that abide

In particular, the level of engagement across

A product that’s fair doesn’t necessarily

to its principles. Fairtrade, however, is used

the entire supply chain is varied. Growers and

equate to a compromise on quality. The fair

to describe the certification and labelling

farmers in remote regions generally have little

trade certification process should include a

system governed by Fairtrade International.

access to market information on their product

criteria on quality including stringent taste

The Fairtrade system allows consumers to

price and value. While farmer cooperatives

testing. This could alter the perception of

identify goods that have met internationally

(co-ops) have been set up in remote regions

the fair trade price being a ‘ceiling’ rather

agreed Fairtrade Standards and carry the

to manage the fair trade process and reinvest

than a ‘floor’.

Fairtrade mark. So some products can be fair

the fair trade premiums, farmers are generally

I see fair trade as a fundamental way

trade, but not labelled Fairtrade.

left out of the co-ops’ decision-making process

to reduce poverty and increase sustainable

on buyers and pricing.

development and as a catalyst for socially

Fair trade has a number of benefits, to

There is a fundamental disconnect between

responsible consumption. Its fundamental

Fair trade agreements offer improved ac-

farmers and co-ops; this in turn leads often to

purpose is to create opportunities and pro-

cess to global markets and competitive prices.

a lack of awareness by farmers on the final

mote inclusion for producers who have been

This level of accessibility is considered key

destination of their product, its end use and

economically disadvantaged or marginalised

for sustainable poverty reduction. Although

price. Farmers need to be empowered with a

by the traditional trading system. Despite its

the impact may vary from country to country,

sense of ownership in fair trade and this could

failings, every organisation and individual

fair trade has an overall positive impact on

be accomplished with fair trade re-engaging the

should consider how ‘fair’ their products are

both small producers and plantation workers

farmer at a grassroots level. Another method

before they buy.

both producers and consumers.

in producing countries. Fair trade can also have an impact in reducing poverty. But a word of caution is needed as fair trade is not a permanent cure for poverty-stricken farmers and plantation workers. A number of factors constrain fair trade’s impact on poverty, including volume of production, the size of farms and externalities

42 Sustainability Matters - Feb/Mar 2016

Dr Kaushik Sridhar is the National Corporate Citizenship Manager for KPMG Australia. He has extensive experience in providing sustainability/corporate social responsibility (CSR) strategy advice, materiality assessments, stakeholder engagement and reporting assurance. Prior to joining KPMG, he worked at Ernst & Young (and previously Net Balance) for 3.5 years where he managed projects in areas including sustainability assurance, sustainability strategy and reporting, data management, and stakeholder engagement for medium and large organisations across multiple industries.

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Sustainability Matters Feb/Mar 2016  

Sustainability Matters is a bi-monthly magazine showcasing the latest products, technology and sustainable solutions for industry, governmen...

Sustainability Matters Feb/Mar 2016  

Sustainability Matters is a bi-monthly magazine showcasing the latest products, technology and sustainable solutions for industry, governmen...