Recently, reports have appeared in the media question whether Fairtrade actually helps the poorest rural people in developing countries. These reports have been prompted by research by the School of Oriental and African Studies, part of the university of London. The SOAS report is called ‘Fairtrade, Employment and Poverty Reduction (FTEPR) in Ethiopia and Uganda’. Fairtrade Foundation has issued the following response:
The Fairtrade Foundation welcomes the underlying research for this report, which included interviews with 1,700 workers in areas where both Fairtrade and non-Fairtrade smallholders and plantations were operating across the tea, coffee and flower sectors in Ethiopia and Uganda. We will study it with a view to improving our work in those two countries.
Fairtrade has always recognised that agricultural labourers are extremely poor, and we agree that more needs to be done to help them.
Speaking for the Fairtrade Foundation, CEO Michael Gidney said, “We welcome this focus on the low wages that persist among too many agricultural workers, particularly those who carry out informal work and who are very hard to reach. In Fairtrade we are committed to playing our part in supporting all workers – in the past year for example we have substantially strengthened our Hired Labour standards and are making real progress on aspects such as Living Wage.”
However, the Foundation believes there are significant flaws in this study and that it is wrong to state that Fairtrade does not improve the lives of the poor. Many independent academic studies have shown that Fairtrade does benefit poor farmers and workers supplying international markets.
In particular, the SOAS study failed to find Fairtrade certified farms for half of its research sites (Table 2:1, page 31), making a balanced comparison between Fairtrade and non-Fairtrade systems impossible. For example, researchers looked at only one of five Fairtrade certified smallholder tea producer organisations in Uganda. Many of these are selling higher proportions of their tea on Fairtrade terms – a study of a different organisation might well have reached very different conclusions.
“It is a shame that the report does not acknowledge a critical problem: that where farmers themselves have low levels of Fairtrade sales they are limited in the additional benefits they can pass on to workers, especially seasonal labour,” Michael Gidney continued.
The study did not assess how much each certified farmer organisation was selling on Fairtrade terms, nor consequently the amount of Fairtrade premium each received for investment in community projects such as health centres and housing.
In addition, the large “Fairtrade” flower farm in Ethiopia cited by this report left Fairtrade in 2011, whilst one of the “non-Fairtrade” flower farms studied in the report, which has some of the best wage conditions in the country, joined Fairtrade in 2012. As a result , in 2012 alone, its first year of certification, this farm has earned several hundred thousand pounds in additional Fairtrade premiums for investment in workers’ own projects to improve their own lives and their wider community.
The report indicates that one major factor clearly affecting the lives of agricultural workers is the size of the farm on which they are employed, and that many other differences are down to “highly idiosyncratic” factors which vary from locality to locality. The report concludes (page 120): “FTEPR cannot make direct causal claims from its findings, such as that ‘Fairtrade causes low wages’, for example.”
“We know that Fairtrade makes a difference to the lives of 1.4 million farmers and workers, and many other studies have backed this up,” concludes Michael Gidney. “When people reach for a product with the FAIRTRADE Mark, they are making a difference in the lives of the people who grew them. If we want to have an even greater impact, we need more of those customers – and more companies and donors – to back Fairtrade and campaign for trade justice.”