The Fairtrade approach is to offer farmers attractive prices, normally above the world-market level, provided they produce goods in an environmentally sustainable and socially equitable manner. The idea is to ensure incomes that enable rural people to live in a satisfying and self-determined way. Consumers who buy products with the Fairtrade logo know that they are supporting a worthy cause rather than taking advantage of an exploitative supply chain.
Today, almost 75,000 cotton farmers in developing countries have obtained Fairtrade certification. Their organisations – typically cooperatives – live up to high standards. The use of genetically modified organisms is ruled out. Dangerous pesticides are banned as well. Fairtrade standards are designed to protect farmers’ health and safety as well as to conserve nature. Moreover, they are geared to promoting investments in businesses that are eco-friendly and provide good livelihoods to all persons concerned.
Some years ago, two independent impact studies delivered a picture of how Fairtrade is making a difference in cotton farmers’ lives in West and Central Africa as well as in India, the main cotton-producing regions. One study was a joint effort by the Natural Resources Institute (NRI) of the University of Greenwich and the Institute of Development Studies (IDS) of the University of Sussex in Britain. The second was prepared by the Centre for Evaluation (CEval) of the University of Saarland in Germany. According to CEval, Fairtrade “lays the essential foundation for successful and sustainable rural development”. The researchers stated that the Fairtrade approach allows farmers to take ownership of development by participating in strong democratic organisations.
The CEval study appreciated that farmers with Fairtrade certification feel a greater sense of independence and empowerment. They actively participate in decision-making and have a bearing on the design of development projects that affect them. One reason is that Fairtrade provides support to producer groups and assists them to become organised. The guiding idea is that they gain greater control of their futures by cooperation. CEval pointed out that the adherence to Fairtrade standards “improves working conditions, gives security to farmers and workers and protects the environment”.
Keep getting better
One of the Fairtrade principles is that production practices should keep improving over time. For instance, the shift from conventional to organic farming is encouraged. According to the NRI/IDS study, the continuous-improvement approach is working out. The scholars stated that Fairtrade standards have led to “significant environmental benefits”. The reasons include “the reduction of the use of harmful pesticides, better disposal of chemical containers, introduction and strengthening of sustainable farming methods”. Synergies with organic farming are acknowledged.
Fairtrade farmers enjoy a sense of economic security thanks to the minimum price that reflects their average costs for sustainable production. In addition, the Fairtrade Premium, paid on top of the selling price, enables farmers to invest in projects of their own choice on their farms in their communities. CEval appreciated the difference the Fairtrade minimum price and Premium make: “The Fairtrade Premium offers farmers and workers the important opportunity of participation in community development.” The authors emphasised that farmers and workers assume new responsibilities, acquire new skills and get involved in other areas than farming. The CEval study concluded that “the investments made with Fairtrade premium money often improve the living conditions in rural communities”.
In West and Central Africa the minimum price Fairtrade paid was found to be significantly higher than the standard price paid by national marketing agencies run by governments. It was up to 49 % higher in Senegal and Cameroon and even up to 78 % higher in Mali. In India, the impact of the minimum price was not as strong because market prices were generally higher there. Nonetheless, the minimum price for Fairtrade cotton still made a difference. The rural families concerned were aware of the additional income improving their outlooks in terms of food security, health care and children’s schooling. They knew that they were faring better than farmers growing cotton in the conventional way. The Fairtrade Premium is often used for social projects that benefit entire communities, for example in terms of education and health services. Fairtrade International’s own evaluations have shown, moreover, that cotton-producer organisations invest in improving farm activities. In 2013, all premium payments for Fairtrade cotton amounted to € 644,000. More than one third of this sum was invested in farm-related investments, including tools, seed, soil management, ponds, drip irrigation and organic fertilisation.
For obvious reasons, the success of Fairtrade hinges upon sales. In a journal essay in 2012, experts from the multilateral International Cotton Advisory Committee spelled out a drawback: “While farmers are required to learn new crop-management techniques and, in most cases, face additional production costs, demand for their cotton is not guaranteed.” In the wake of the financial crisis of 2008, the sales of Fairtrade cotton declined in rich nations. This trend had a severe adverse affect on producers, particularly in West Africa. In addition, agricultural inputs have been getting more expensive, reducing the profit margins of farmers. As a result, farmers have fewer incentives to take the Fairtrade approach. Some of them have told Fairtrade International that they have begun to focus on other crops and alternative ways of earning money.
The new Fairtrade Cotton Program was designed to rise to this challenge. It makes it easier for garment brands to commit to the Fairtrade approach, enabling them to use Fairtrade cotton in their manufacturing of clothing and textiles, rather than creating a specific Fairtrade cotton range. The approach can serve their social-corporate responsibility and helps to improve farmers’ lives.
With the appropriate support, farmers can and will invest in a more sustainable future, taking into account environmental, economic and social aspects. The Fairtrade approach boosts farmers’ resilience. This is an urgent matter – not least in view of climate change. Unusual weather, unprecedented droughts and devastating storms have terrible impacts on agriculture. Fairtrade offers a good way to improve quality, productivity and environmental sustainability.
Anup Kumar Singh works for Fairtrade International. He is the organisation’s global product manager for cotton.
Impact study by NRI/IDS:
Impact study by CEval: