Fairtrade certification unraveled

Who says Fairtrade month says the ideal opportunity to talk a little more of this certification!

It should be noted that Fairtrade is a trading system whose objective is to help producers in growing countries to establish sustainable and fair trade relations. By choosing Fairtrade coffee you’re supporting more than 750,000 coffee farmers to thrive in an unstable market by earning a decent income, protecting their local environment, and investing in their farms and communities.

The reality of coffee producers

80% of the world’s coffee is grown by smallholder farmers, many of whom struggle to earn a reliable living as a result of price volatility. The price of coffee changes on average every three minutes. Usually the volatility in coffee pricing is due to weather events in a producing country, fluctuations in currency valuations, or the basic dynamics of supply and demand.

While the global coffee industry now generates more than $200 billion per year, the average farmer’s income has not changed in the past 20 years – or has actually declined when taking into account higher farming costs.

Apart from the obvious economic implications of low prices for coffee farming families, there are significant ripple effects: increased child and forced labor, decreased environmental stewardship, food insecurity, increasing rates of migration and lower coffee quality. Farmers unable to meet their basic costs of production can’t invest in the necessary farm renovations or meticulous processing methods that can ensure a consistent supply of quality coffee, which further hurts their sales. This cycle of poverty is driving away both present and future generations of coffee farmers – a dynamic we need to address if coffee is to survive as a viable business.

Why choose Fairtrade?  

Fairtrade is the only global sustainability label that guarantees a Minimum Price for coffee. The minimum price acts as a safety net for farmers against price volatility. Fairtrade certified coffee cooperatives currently earn the Fairtrade Minimum Price of $1.40 per pound or $1.70 per pound for organic.

Fairtrade certification allows producers to receive a premium on the sale of their green coffee beans. The Fairtrade Premium is an additional sum of money that goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions. Producers determine what is most important to them; whether this is education or health care for their children, improving their business, or building vital infrastructure such as roads and bridges for their community.

Fairtrade positive impacts

Fairtrade is about far more than just fair prices – it creates sustainable impact in three interconnected areas: economic, social, and environmental.

ECONOMIC IMPACT

1. Through the Minimum Price for most commodities, Fairtrade helps certified farmers become more income-secure and less vulnerable to market uncertainty.
2. In many key commodity sectors, Fairtrade certification enables farmers to negotiate a higher price for their product than the conventional market price.
3. Additional income through the Fairtrade Premium supports improvements to product quality and productivity, strong cooperatives, investment in collective assets, and local infrastructure.

SOCIAL IMPACT

1. Fairtrade empowers farmers by helping them organize into cooperatives. This improves their negotiating position within the supply chain.
2. Workers on larger farms are protected by the Fairtrade Standards, which ensure better working conditions, health and safety measures, and the right to unionize.
3. The Standards also promote gender equality, and prohibit child and forced labour.
4. The Fairtrade Premium is often invested in projects which benefit entire communities, such as health facilities, schools, housing, and clean water.

ENVIRONMENTAL IMPACT

1. The Fairtrade Standards encourage efficient management of natural resources like soil and water, and restrict the use of harmful chemicals.
2. Fairtrade favours organic farming, which gives farmers financial benefits, and access to new markets.
3. With climate change increasingly impacting farmers, Fairtrade provides access to financing, support and expertise to help them adapt.

Everyone has a role to play in the sustainability and continuity of the coffee sector. Coffee companies have to step up and pay a fair price for their beans. Consumers can show their support by buying Fairtrade and insisting on a fairer deal for coffee farmers.