Fairtrade labelling
Encyclopedia
Product certification
Product certification or product qualification is the process of verifying that a certain product has passed performance tests and quality assurance tests or qualification requirements stipulated in contracts, regulations, or specifications...
system designed to allow people to identify products
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
that meet agreed environmental, labour and developmental standards. Overseen by a standard-setting body, Fairtrade International (FLO), 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 Mark (or, in North America, the applicable Fair Trade Certified Mark
Fair Trade Certified Mark
The Fair Trade Certified Mark is a fair trade certification mark used in Canada and in the United States. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal...
) for those products.
The Fairtrade International certification system covers a growing range of products, including banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, honey
Honey
Honey is a sweet food made by bees using nectar from flowers. The variety produced by honey bees is the one most commonly referred to and is the type of honey collected by beekeepers and consumed by humans...
, oranges
Orange (fruit)
An orange—specifically, the sweet orange—is the citrus Citrus × sinensis and its fruit. It is the most commonly grown tree fruit in the world....
, cocoa, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, shortbread
Shortbread
Shortbread is a type of unleavened biscuit which is traditionally made from one part white sugar, two parts butter, and three parts oatmeal flour. The use of plain white flour is common today, and other ingredients like ground rice or cornflour are sometimes added to alter the texture...
, cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
, dried and fresh fruit
Fruit
In broad terms, a fruit is a structure of a plant that contains its seeds.The term has different meanings dependent on context. In non-technical usage, such as food preparation, fruit normally means the fleshy seed-associated structures of certain plants that are sweet and edible in the raw state,...
s and vegetable
Vegetable
The noun vegetable usually means an edible plant or part of a plant other than a sweet fruit or seed. This typically means the leaf, stem, or root of a plant....
s, juice
Juice
Juice is the liquid that is naturally contained in fruit or vegetable tissue.Juice is prepared by mechanically squeezing or macerating fruit or vegetable flesh without the application of heat or solvents. For example, orange juice is the liquid extract of the fruit of the orange tree...
s, nuts
Nut (fruit)
A nut is a hard-shelled fruit of some plants having an indehiscent seed. While a wide variety of dried seeds and fruits are called nuts in English, only a certain number of them are considered by biologists to be true nuts...
and oil seed
Seed
A seed is a small embryonic plant enclosed in a covering called the seed coat, usually with some stored food. It is the product of the ripened ovule of gymnosperm and angiosperm plants which occurs after fertilization and some growth within the mother plant...
s, quinoa
Quinoa
Quinoa , a species of goosefoot , is a grain-like crop grown primarily for its edible seeds. It is a pseudocereal rather than a true cereal, or grain, as it is not a member of the grass family...
, rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, spice
Spice
A spice is a dried seed, fruit, root, bark, or vegetative substance used in nutritionally insignificant quantities as a food additive for flavor, color, or as a preservative that kills harmful bacteria or prevents their growth. It may be used to flavour a dish or to hide other flavours...
s, sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
, tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
and wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
.
In 2009, Fairtrade certified sales amounted to approximately €3.4 billion (US $4.9 billion) worldwide, a 15% increase from 2008. Sales are further expected to grow significantly in the coming years: according to the 2005 Just-Food Global Market Review, Fairtrade sales should reach US$ 9 billion in 2012 and US$ 20-25 billion by 2020.
As of 2011, 827 producer organizations in 58 developing countries were Fairtrade certified.
History
Although many attempts to market fair trade products were observed in the 1960s and 1970s, fair trade sales only became widespread with the Max HavelaarMax Havelaar
Max Havelaar: Or the Coffee Auctions of the Dutch Trading Company is a culturally and socially significant 1860 novel by Multatuli which was to play a key role in shaping and modifying Dutch colonial policy in the Dutch East Indies in the nineteenth and early twentieth century...
labeling initiative in 1988 and the establishment of Fairtrade International (which included other regional initiatives like it) in 1997. Fair trade sales prior to labelling initiatives were contained to relatively small world shops (also called charity shops), operated by alternative trading organization
Alternative trading organization
An alternative trading organization is usually a non-governmental organization or mission-driven business aligned with the Fair trade movement, aiming "to contribute to the alleviation of poverty in developing regions of the world by establishing a system of trade that allows marginalized...
s (ATOs) such as Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
and Traidcraft
Traidcraft
Traidcraft is a UK-based fairtrade organisation, established in 1979. The organisation has two components: a public limited company called Traidcraft plc, which sells fairly traded products in the United Kingdom; and a development charity called Traidcraft Exchange that works with poor producers in...
. Many felt that these world shops 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 fair trade 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 fair trade products and in their origins.
At the initiative of Mexican coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
farmers, the first fair trade labelling initiative, Stichting Max Havelaar
Stichting Max Havelaar
Stichting Max Havelaar is the Dutch member of FLO International, which unites 23 Fairtrade producer and labelling initiatives across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand. Several of these corresponding organizations in other European countries also use the...
, was launched in the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
on November 15, 1988 by Nico Roozen
Nico Roozen
Nico Roozen is a Dutch economist who, in collaboration with Frans van der Hoff and ecumenical development agency Solidaridad, launched Max Havelaar, the first Fairtrade certification initiative in 1988. Roozen played a key role in convincing several major Dutch retailers to offer Fairtrade goods,...
, Frans van der Hoff
Frans van der Hoff
Frans van der Hoff , or Francisco VanderHoff Boersma as he is called in Latin America, is a Dutch missionary who, in collaboration with Nico Roozen and ecumenical development agency Solidaridad, launched Max Havelaar, the first Fairtrade label in 1988...
and Dutch
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
ecumenical development agency Solidaridad
Solidaridad
Solidaridad is a Dutch ecumenical development agency founded in 1969. Its main objective is the promotion of social justice, for which it runs three programs:*Fairtrade, for economic justice, with coffee, tropical fruits and cotton/textiles as sub-programs;...
. 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 worldshops and, for the first time, to mainstream retailers across the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
.
The initiative was groundbreaking as for the first time Fairtrade coffee was being offered to a larger consumer segment. Fairtrade labelling certification provided some assurance that the products were really benefiting the farm workers at the end of the supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
.
The initiative was a great financial 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
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
), “Transfair” (in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
), or carrying a national name: “Fairtrade Mark” in the UK and Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, “Rättvisemärkt” in Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, and "Reilu kauppa" (Finnish) or "Rejäl handel" (Swedish) in Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
.
| Retail Value Global Fairtrade Sales |
||
|---|---|---|
| Year | Sales Value | |
---- |
||
| 2009 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 3 400 000 000 |
|
| 2008 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 2 900 000 000 |
|
| 2007 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 2 381 000 000 |
|
| 2006 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 1 623 000 000 |
|
| 2005 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 1 141 570 191 |
|
| 2004 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 831 523 066 |
|
| 2003 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 554 766 710 |
|
| 2002 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 300 000 000 |
|
| 2001 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 248 000 000 |
|
| 2000 | € Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... 220 000 000 |
|
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
Fairtrade Labelling Organizations International
Fairtrade International was established in 1997, and is an association of 3 producer networks, 19 national labelling initiatives and 3 marketing organizations that promote and market the Fairtrade Certification Mark in their countries Fairtrade labelling organizations exist in 18 European...
, now simply known as Fairtrade International (FLO)
Fairtrade Labelling Organizations International
Fairtrade International was established in 1997, and is an association of 3 producer networks, 19 national labelling initiatives and 3 marketing organizations that promote and market the Fairtrade Certification Mark in their countries Fairtrade labelling organizations exist in 18 European...
. FLO is 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.
In 2002, FLO launched a new International FAIRTRADE Certification Mark
International Fairtrade Certification Mark
The International FAIRTRADE Certification Mark is an independent certification mark used in over 50 countries. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal....
, 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.
Today, all but one labelling initiative have fully adopted the new mark. TransFair USA
Transfair USA
Fair Trade USA, formerly "TransFair USA" is a 501 non-profit organization.Founded in 1998, Fair Trade USA’s mission is to "enable sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth"...
has apparently elected to continue with its own Fair Trade Certified Mark
Fair Trade Certified Mark
The Fair Trade Certified Mark is a fair trade certification mark used in Canada and in the United States. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal...
for the time being, while the Canadian organization currently allows certified products to carry either mark, it is transitioning toward sole use of the International Fairtrade Certification Mark
International Fairtrade Certification Mark
The International FAIRTRADE Certification Mark is an independent certification mark used in over 50 countries. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal....
.
In January 2004, Fairtrade Labelling Organizations International was divided into two independent organizations: Fairtrade International (FLO), 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 ISO 65 standards for product certification bodies.
At present, over 25 labelling initiatives and producer networks are members or associate members of Fairtrade International. There are now FAIRTRADE Certification Marks on dozens of different products, based on FLO’s certification for coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
, rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, mangoes, cocoa, cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
, sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
, honey
Honey
Honey is a sweet food made by bees using nectar from flowers. The variety produced by honey bees is the one most commonly referred to and is the type of honey collected by beekeepers and consumed by humans...
, fruit juices, nuts
Nut (fruit)
A nut is a hard-shelled fruit of some plants having an indehiscent seed. While a wide variety of dried seeds and fruits are called nuts in English, only a certain number of them are considered by biologists to be true nuts...
, fresh fruit
Fruit
In broad terms, a fruit is a structure of a plant that contains its seeds.The term has different meanings dependent on context. In non-technical usage, such as food preparation, fruit normally means the fleshy seed-associated structures of certain plants that are sweet and edible in the raw state,...
, quinoa
Quinoa
Quinoa , a species of goosefoot , is a grain-like crop grown primarily for its edible seeds. It is a pseudocereal rather than a true cereal, or grain, as it is not a member of the grass family...
, herbs and spices, wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
and footballs
Football (ball)
A football is an inflated ball used to play one of the various sports known as football.The first balls were made of natural materials, such as an inflated pig bladder, sometimes inside a leather cover...
etc.
Fairtrade Standards
There are two types of Fairtrade Standards: Standards for small farmers' organizations and for hired labour situations. Fairtrade Standards for small farmers' organizations include requirements for democratic
Democracy
Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...
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 employees receive minimum wages and bargain collectively
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...
. Fairtrade-certified plantation
Plantation
A plantation is a long artificially established forest, farm or estate, where crops are grown for sale, often in distant markets rather than for local on-site consumption...
s must also ensure that there is no forced or child labour and 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 the management and the employees. This joint body decides on how Fairtrade Premiums will be spent to benefit plantation
Plantation
A plantation is a long artificially established forest, farm or estate, where crops are grown for sale, often in distant markets rather than for local on-site consumption...
employees.
For some products, such as coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, only Fairtrade Standards for small farmers' organizations are applicable. For others, such as tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
, both small farmers' organizations and plantations can be certified.
Fairtrade Standards and procedures are approved by the Fairtrade International Standards Committee, an external committee comprising all FLO stakeholders (labeling initiatives, producers and traders) and external experts. Fairtrade Standards are set by FLO in 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 inspection and certification
Fairtrade inspection and certification are carried by FLO-CERT, an independent body created by Fairtrade International in 2004. FLO-CERT ensures that both producers and traders comply with Fairtrade Standards and that producers invest the benefits received through Fairtrade in their development.FLO-CERT works with a network of around 100 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-CERT inspections and certification follow the international ISO standards for product certification bodies (ISO 65).
Typically, in order for a product to be marked as "Fair-Trade" at least 20% of its mass must be made up of a Fairtrade product.
Fairtrade pricing
The main aspects of the Fairtrade system are the Minimum Price and the Premium. These are paid to the exporting firm, usually a second tier cooperative, not to the farmer. They are not paid for everything produced by the cooperative members, but for that proportion of their output they are able to sell with the brand 'Fairtrade Certified', typically 17% to as much as 60% of their turnover.- The Fairtrade Minimum Price is a guaranteed price.
- 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-CERT for the use of this money. It is generally used for improvements in healthHealthHealth is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...
, educationEducationEducation in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
or other social facilities, although it may also be used for certain development projects to enable farmers to improve productivity or reduce their reliance on single commodities.
In practice the exporting firms do not always receive the full extra payment specified.
A significant proportion of the extra payment, sometimes all of it, is spent on meeting the criteria for certification, and added costs of membership. The Fairtrade Foundation does not monitor how much of the extra money paid to the exporting cooperatives reaches the farmer. The cooperatives incur costs in reaching the Fairtrade political standards, and these are incurred on all production, even if only a small amount is sold at Fairtrade prices. The most successful cooperatives appear to spend a third of the extra price received on this: some less successful cooperatives spend more than they gain.
There is no evidence that Fairtrade farmers get higher prices on average. Anecdotes state that farmers were paid more or less by traders than by Fairtrade cooperatives. Few of these anecdotes address the problems of price reporting in Third World markets, and few address the complexity of the different price packages. Cooperatives typically average prices over the year, so they pay less than traders at some times, more at others. Bassett (2009) is able to compare prices accurately where Fairtrade and non-Fairtrade farmers have to sell cotton to the same monopsonistic ginneries. Fairtrade encouraged Nicaraguan farmers to switch to organic coffee, which resulted in a higher price per pound, but a lower net income because of higher costs and lower yields.