International Fairtrade Certification Mark
The 'International Fairtrade Certification Mark is an independent Fair trade certification mark used in over 69 countries. It appears on products as an independent guarantee that a product has been produced according to fair trade political standards.
The Fairtrade Mark is owned and protected by Fairtrade International, on behalf of its 25-member and associate member Fairtrade producer networks and labelling initiatives.
For a product to carry the Fairtrade Mark, it must come from FLOCert inspected and certified producer organizations. The crops must be marketed in accordance with the International Fairtrade standards set by Fairtrade International. The supply chain is also monitored by FLOCert. To become certified Fairtrade producers, the primary cooperative and its member farmers must operate to certain political standards, imposed from Europe. FLO-CERT, the for-profit side, handles producer certification, inspecting and certifying producer organisations in more than 50 countries in Africa, Asia, and Latin America. In the Fair trade debate there are many complaints of failure to enforce these standards, with Fairtrade cooperatives, importers and packers profiting by evading them.
As of 2006, the following products currently carry the Fairtrade Mark: coffee, tea, chocolate, cocoa, sugar, bananas, apples, pears, grapes, plums, lemons, oranges, Satsumas, clementines, lychees, avocados, pineapples, mangoes, fruit juices, quinoa, peppers, green beans, coconut, dried fruit, rooibos tea, green tea, cakes and biscuits, honey, muesli, cereal bars, jams, chutney and sauces, herbs and spices, nuts and nut oil, wine, beer, rum, flowers, footballs, rice, yogurt, baby food, sugar body scrub, cotton wool and cotton products.
How it works
The marketing system for Fairtrade and non-Fairtrade coffee is identical in the consuming countries, using mostly the same importing, packing, distributing and retailing firms. Some independent brands operate a virtual company, paying importers, packers and distributors and advertising agencies to handle their brand, for cost reasons. In the producing country Fairtrade is marketed only by Fairtrade cooperatives, while other coffee is marketed by Fairtrade cooperatives, by other cooperatives and by ordinary traders.Retailers and cafes in the rich countries can sell Fairtrade coffee at any price they like, so nearly all the extra price paid by consumers, 82% to 99%, is kept in the rich countries as increased profit. There is however evidence that dishonest importers do not pay the full Fairtrade price, so an even smaller proportion reaches the Global South.
Cooperative traders and exporters can sell coffee as Fairtrade certified if they meet the political standards of FLO and they pay a certification and inspection fee. Other administration costs and production costs are incurred to meet these standards. The exporter is paid a minimum price for Fairtrade certified coffee when the world market is oversupplied, and a Fairtrade premium of 15c per lb at other times. The cooperatives can, on average, sell only a third of their output as Fairtrade, because of lack of demand, and sell the rest at world prices. As the additional costs are incurred on all production, not just that sold as Fairtrade, cooperatives sometimes lose money on their Fairtrade membership. After the additional costs have been subtracted from the Fairtrade price, the rest goes on ‘Social Projects’ such as clinics, women’s groups and baseball pitches.
Farmers do not get any of the higher price under Fairtrade. Nor is there any evidence that they get higher prices as a result of better marketing: the cooperatives sometimes pay farmers a higher price than farmers do, sometimes less, but there is no evidence on which is more common. Farmers do, however, incur extra costs in producing Fairtrade, so they certainly do lose money from Fairtrade membership in some cases. There is little or no research on the extra costs incurred, or the effect of Fairtrade membership on the income of farmers.
Disambiguation: There is widespread confusion because the fair trade industry standards provided by Fairtrade International use the word “producer” in many different senses, often in the same specification document. Sometimes it refers to farmers, sometimes to the primary cooperatives they belong to, to the secondary cooperatives that the primary cooperatives belong to, or to the tertiary cooperatives that the secondary cooperatives may belong to but “Producer means any entity that has been certified under the Fairtrade International Generic Fairtrade Standard for Small Producer Organizations, Generic Fairtrade Standard for Hired Labour Situations, or Generic Fairtrade Standard for Contract Production.". The word is used in all these meanings in key documents. In practice, when price and credit are discussed, “producer” means the exporting organization, “For small producers’ organizations, payment must be made directly to the certified small producers’ organization”. and “In the case of a small producers’ organization , Fairtrade Minimum Prices are set at the level of the Producer Organization, not at the level of individual producers " which means that the "producer" here is halfway up the marketing chain between the farmer and the consumer. The part of the standards referring to cultivation, environment, pesticides and child labour has the farmer as "producer". The part referring to democratic organization has the primary cooperative as "producer".
Fairtrade Standards contain minimum requirements that all producer organisations must meet to become certified as well as progress requirements in which producers must demonstrate improvements over time.
There are several types of Fairtrade Standards: Standards for small farmers' organizations.”, standards for hired labour situations, standards for contract situations and standards for trade, and there are also standards for the different products.
Fairtrade Standards for small farmers' organizations include requirements for democratic 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. Fairtrade-certified plantations 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 employees.
For some products, such as coffee, only Fairtrade Standards for small farmers' organizations are applicable. For others, such as tea, both small farmers' organizations and plantations can be certified.
Trade standards cover the payment of premiums, of minimum prices, where applicable, the provision of credit to buy the crop, and commercial relationships between the exporting cooperative or other organization and the importer.
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 Standards and procedures are approved by the Fairtrade International Standards Committee, an external committee comprising all FLO stakeholders 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.
There are however criticisms of the private standards. There have been complaints that Fairtrade standards are inappropriate and may harm producers, sometimes imposing months of additional work for little return. There have also been complaints that standards set by a small committee of activists in the rich north have been imposed on poor farmers in the Global South. Fraser suggests that they are a rag bag of requirements imposed without thought of what is to be achieved or how.
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 Premium is an extra payment over the market price which is paid to the exporting organization. The residual after extra costs have been met must be spent on “social projects” for social and economic development in the producing communities, rather than being given to farmers as extra payment. The producers themselves decide how these funds are to be spent. They are generally used for improvements in health, education 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. As part of the Fairtrade criteria, registered producers are accountable to FLOCert for the use of this money.
- The Fairtrade Minimum Price is a guaranteed price to be paid for a few products like coffee when the world prices collapse. Again, it would usually be spent on "social projects" rather than going to the farmers.