FAIRTRADE with the small producers, their products and plantation-workers from the (low developped) countries of the „south“

What is FAIRTRADE ?• It is an alternative business model for the small poducers in the

„south“• It is a NON PROFIT movement and part of an international

organisation: Fairtrade Labelling Organizations – FLO, with17 national initiatives.

• FAIRTRADE awards a quality-seal for fairtrade. This international label guarantees production and trade without exploitation of man and nature:1) production and trade with respect towards

human beings and the environment2) set of social and ecological minimum standards 3) future for almost a million families in 43 LDCs (low developped countries)

Fairtrade – an advantage for all, who participate

• The small producers gain through fair trade-relations.

• The importers and selling companies and shops gain through high quality products with a social label.

• The consumers gain through high quality, too, ...through environmental compatibility and guaranteed origin of the products.

• Fairtrade is a simple and effective opportunity for ALL, to contribute to the fight against poverty in the (low developed) countries of the south.

The partners in the south

Small producers - organized and joined together in small cooperatives (coffee, cacao, sugar, honey... and – recently – rice).

Wageworkers on smaller plantages and in the manufactering process (tea, oranges, bananas...)

FAIRTRADE Standards for the small producers:• Direct market access and direct trade (elimination of intermediaries)

• Fair minimum-prices (clearly above the world market level)

• Premiums for social projects and improvements of the infra-structure

• Premiums (extra charge) for switching to organic

• Long term trade relations

• Pre-financing (up to 60%)• Controlled origin• Ecological standards (natur, environment... )

FAIRTRADE standards for wage-workers

• Fair wages

• Securing basic social rights (accomodation, fundamental medical supply, ... )

• Fair working conditions

• Protective labour legislation

• Premium (bonus) for the improvement of the social situation (for example building of schools, medical supply...)

• Right for trade-union-support

FAIRTRADE protects the environment• Principle of sustainibility• Preference of small-scale-farming to preserve small-area-

structures• Reduction of chemical fertilizers and pest-control• Protection of the waters and of the tropical rain-forest• Promotion of diversified farming• Programs for waste-reduction (for example plastic-foils in the

banana-production)• Higher prices for „bio-certified“ products in order to promote

biological cultivation

FAIRTRADE product - groups

• Coffee, tea, chocolate, cacao, honey, orange-juice, bananas, bonbons, sugar, rice, fruit-juice (mango...) and (as the first non-food product): footballs.

• available in: supermarkets, drugstores, bio-shops, grocery stores...

Producers (small-farming-families)

The producers, too, have obligations in the FAIRTRADE-system:

The small-farming-families bind themselves,

• to become members in a cooperative with democratic structure

• to practice a sustainable form of farming• to have a careful approach to the nature

Obligations:• Right of co-determination on the use of the „social-premium“

(social-bonus)• Reasonable wages for the workers• Observing the national and international protective labour

legislation• Sustainable economizing• Measures for environmental protection and waste-reduction

Producers –working men and women in smaller plantages and in the

manufactoring process

FAIRTRADE - international cooperation

(Holding)organization: FLO International (Fairtrade Labelling Organizations International)

Tasks:

• Development of product-standards• Care for and contact to the (small) producers• Control of keeping and observing the FAIRTRADE-standards

FAIRTRADE - the positive globalization

FAIRTRADE guarantees:

Complete control by international networking of FLO with:• producers• Fairtrade-organizations• importers • Licencees (companies)

Control• of the producers

– by FLO and local consultans/inspectors (sales, keeping the standards, use of the purpose-bound economical and social-premiums

• of the importers– by strict contracts with FLO International – by regular reports of their purchases to FLO

• of the licencees– by strict contracts with the national label-initiatives

(FAIRTRADE) – by quarterly reports of their purchases to FAIRTRADE– by passing on of the reports to FLO

Why FAIRTRADE? prices on world markets are low and unstable

earnings (and world-market-prices) do not meet living costs of the

small producers coffee is worldwide the mostly traded agrarian commodity

millions of small farmer-families and plantation-workers live under extreme poverty and...

...FAIRTRADE is one of the best instruments to combat poverty

FAIRTRADE is not a gift for the small producers, but a fair deal for their products

FAIRTRADE is promotion of sustainable development

FAIRTRADE-labelled bananas...

come from small-farmers-cooperatives and plantages in

• Columbia

• Costa Rica

• Dominican Republic

• Ecuador (world-leading-banana-exporter)

• Ghana

• Windward Islands

Participation in the FAIRTRADE-system

Standards for the admission in the FAIRTRADE-producer-register:

• Political indipendance and democratic structure

• Small-family-farming-cooperatives

• Participation of the members on all important decisions

• Support of educational measures

• Support of sustainable cultivation methods• Report of all transactions concerning the fair trade

FAIRTRADE-prices, shown at the example of coffee:

• worldmarket-price 2/2004: ca. 76 US-cents/Ib (lb = engl. Pound = 0,46kg)

• FAIRTRADE-minimum-price: 121 US-cents/lb (or: 121 US-dollar/sack = 100 lb = 46kg)

additional:• Social and ecological premium/bonus: 5 US-cents/Ib

• Extra charge for BIO-products: 15 US-cents/lb

Preisentwicklung Rohkaffee "Other Mild Arabicas Group"

0,00

50,00

100,00

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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

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Jahresdurchschnitt Weltmarktpreis FAIRTRADE Mindestpreis inkl FAIRTRADE Prämie

FAIRTRADE – a broad public platform:The 29 member-organisations of FAIRTRADE-Austria come from the

following social fields:

• Aid to developing countries

• Church

• Social aid and policy-organisations (Caritas, CARE Austria, UNICEF)

• Environment- „protectors“ (WWF, ... )

• Education (Austrian university students union, ...)

FAIRTRADE – productsSo fair – so good!

• Non-polluting, mostly with BIO-certificate

• High quality through careful cultivation

• Certificate of origin

• Pleasure and fairness at the same time

• An important contribution to a fairer world and to environmental protection

• Available in more than 2000 shops (in Austria) – Tendency: growing!

How can I support FAIRTRADE?

• In the private sphere:

– Using FAIRTRADE-products regularly at home

– Convincing friends and relatives

– Giving away FAIRTRADE-products

• In the school/university:

– Information-work (reports, info-, tasting- & selling-stalls at school/university-events...)

– FAIRTRADE-products in the school/university-cafeteria

– FAIRTRADE-coffee, -tea, -orangejuice in the teacher‘s room

„alternative trading“ – FAIRTRADE Pionieers:

• „alternative“ import-organisations like „EZA 3. Welt GmbH“, „one world-trade“, „CONA“ (cooperation between Nicaragua and Austria) ...

• „world-shops“ – specialist stores of the fair trade

• Sale of „south“-products as coffee, tea, cacao, spices and handicraft-products, too

• Exists in Austria since 25 years

The quality-sealing – Fair Trade with „commercial“ partners, too.

• Sealing-initiatives: FAIRTRADE, TransFair, Max Havelaar, Fairtrade Foundation ... ... with a common holding-association, the FLO International

(situated in Bonn, Germany)

• Sealed products: coffee, tea, cacao, honey, chocolate, sugar, orangejuice, bananas, rice.

• Objective: availability in as many shops as possible for the daily shopping

• Exists since more than ten years in Austria (foundation 1993)

Contact-information (Austria)

FAIRTRADE Austria

Wohllebengasse 12-14, 1040 ViennaTel.: +01/533 09 56; Fax: DW 11office@fairtrade.at; www.fairtrade.at

Guarantees a better deal for producers

Why Fairtrade labelling?

• Many small farmers become more and more indipendant on middlemen.

• They are given the freedom to join a union.

• A viable trade alternative is created for them.

• „We don‘t need any charity, we are not beggars. If we are paid a reasonable price for our coffee, then we can do without charity“ – Isaias Martinez, UCIRI, Mexico

The core tasks of FLO (founded in 1997, seated in Bonn, Germany):

• Guaranteeing the standards: indipendant inspectors, trade auditing system...

• Business faciliation: finding market niches and joint strategies together with producers, traders and retailers to enhance fairtrade‘s impact in commercial markets.

• Promoting producer support - strengthen their organization and production

Credible, universal, enabling development:

FLO is one of the biggest international certification bodies – it regularly inspects and certifies about 300 producer-organizations in 36 countries, embracing around 800.000 families of farmers and workers.

The impact of FAIRTRADE:

„The most important contribution of the Fairtrade Labelling System is in my eyes that our „dignity as a human being“ is recovered. We are no longer a plaything of the anonymous economic power that keeps us down.“

Isaias Martinez, UCIHI, Mexico

FAIRTRADE „checked and certified“ (FLO-standards):

• Two sets of producer standards: one for small farmers (organized in cooperatives) and one for workers on plantations and in factories.

• Development: to increase the environmental sustainability of their activities and to invest into the development of the organisations and their producers/ workers.

• Trading standards for the traders: pay a price to the producers, that covers sustainable living & production and a premium for development.

• Product-specific standards for each product: minimum quality, price, processing requirements and so on...

FAIRTRADE office Vienna:

• Does not sell products of the fair trade – therefore it controlls without economic self-interest

• Is responsible for the social-quality-seal and for public relation

• The FAIRTRADE-office is financed by:• Licence-receivings• EU-subsidies• Donation-money

FAIRTRADE - (and other) Coffee - example 1:„How much money stays at the producer?“ (small farmer/plantation worker)

• Lavazza Oro (not sealed and not BIO) - ORGANICO (fairtrade-sealed coffee) – both 100% Arabica...

• „Traditional trade“: 7% or less - ORGANICO: 25% of the consumer-price - 75% are for transport and roasting...

• The fairtrade-price includes:– A fixed minimum price– A social premium/bonus and– (if possible – presently 70%) a BIO-premium/bonus

FAIRTRADE – Coffee - example 2:

If 10 families in Austria (or Slovakia) consume and buy FAIRTRADE-coffee regularly, 1 whole coffee-farmer-family in Latin America can live by it.

• no poisons for conservation and riping of the bananas (only lemon-acid)

• With buying 1 kg of FAIRTRADE-bananas you can afford 1 child in ECUADOR to visit school for a whole day.

FAIRTRADE – bananas:

Otto Tausig, a famous actor in Austria:

„A donkey, who buys expensive, what he could get cheaper. Who buys cheap at the cost of people, who live in misery, is a swine.“

FAIRTRADE ...• ... is worldwide the greatest independent authority

for certifying conforming to social criterions

• Products with the FAIRTRADE-quality-seal are available in 19 industrialized countries in Europe, Northamerica, Australia and Asia. FAIRTRADE cooperates with over 375 certified producer-organizations and is supporting thus more than 800.000 families in over 45 so-called „develloping countries“.

FLO – the independant controlling-agency... ... is responsible for:

• The certification of the producer-organisations• The control of the keeping of the FAIRTRADE-criterions• The licencation of importers and traders

• The small-farmers-cooperatives and the plantage-workers, which produce conforming to FAIRTRADE-criterions, are registered in a produzer-register.

• ONLY licensed importers and „alternative“-traders buy from FAIRTRADE-producergroups, who are listed in the FLO-producer-register – and they buy at FAIRTRADE-conditions (f.i. a fixed price and – on demand – pre-financing

FAIRTRADE – Austria...... controlls the companies, which sell products with the

FAIRTRADE-quality-seal (wholesalers, retailers, alternative-traders...) in Austria (mainly „world-stores“ and supermarkets).

The licence-takers report quarterly their sale-conclusions at „fair conditions“ with the licenced importers.

These data are equalized with the informations, that FLO Cert gets from their partner-organizations (licenced importers.

FAIRTRADE bananas in Austria:

– Since market-introduction in february 20022,9 million kg of Bio-Bananas have been eaten in Austria.

– The market-share in Austria is 2,1% (10/2003)

– Important partners of FAIRTRADE-Austria are:• SPAR• BILLA• MERKUR• ADEG

More about FAIRTRADE-bananas:

• The EU imports ca. 40% of all worldwide-exportet bananas and is therefore the greatest sales-market for bananas.

• In Austria the banana is one of the most-eaten fresh-fruits.

• The austrian per/head consumption of bananas is with 11 kg the highest in Europe.

Social Standards in the Banana-Trade:

• The Banana-Trade is divided under few combines , which have the market and the prices under their control.

• Often unjust wages, high use of pesticides and poor working-conditions the every day life of plantage-workers.

• For the fair trade with bananas FAIRTRADE (FLO) and the (small) producers are establishing minimum-prices.

FAIRTRADE-banana-price (spring 2003)– Fixed (minimum)price, which has to cover at least the

production-costs and is set in relation to the worldmarketprice:

5,25 US-dollar per box (18,14 kg/40 pound)

– Biocultivation-bonus: 2,-- US-dollar

– Social-extra-premium (the use of it is determined by the workers- and small producers-committees in their own responsibility: education, clean water, health, medical treatment, infrastructure and so on...):

1,75 US-dollar9,-- US-dollar

BANANAS –The steps from the producer to the consumer:

• Producer delivers the bananas conforming to certain quality-criterions (size, colour, packing...)

• Shipping from Latin America: FOB Machala or Puerto Bolívar/Ecuador (150.000 – 300.000 banana-boxes on a cooling-ship – temperature exactly 13,2° celsius)

• Arriving in Europe: CIF/FOT Hamburg• Transport to the Ripening Company - the bananas reach it green

(1) and leave it yellow (4-5) – ready for the supermarkets)• Transport to the wholesalers and retailers (BILLA, MERKUR, SPAR,

ADEG) – with (6) on the colour-scale the bananas are best!

More about the banana-price:

• As the price for FAIRTRADE-bananas is depending very much from the production-conditions in the producer-countries, there are different national-minimum-prices (who should cover the living-costs) in the FAIRTRADE-system.

• Countries of (BANANA) origin are:• Columbia• Costa Rica• Dominican Republic• Ecuador (with an export-share of 33% world-leader)• Ghana (more „famous“ for cacao)• Windward Islands

From the Andes to the Alps

• 500 years ago the BANANA came to the New World on slave-ships from West-Africa.

• Today the BANANA is the most popular fresh-food in the world.

• Per year around 67 million tons of BANANAS are produced.

• With a per-head-consumption of 10,8 kg Austria is leading in Europe.

The cooperative „El Guabo“ in the provinceEl Oro in ECUADOR

• Founded in 1997

• 105 members (small-farmer-families), who manage 450 ha of land

• „El Guabo“ fulfills the criterions of FAIRTRADE and is more and more shifting to biological farming.

What FAIRTRADE offers „El Guablo“ and it‘s small farming producers:

The FAIRTRADE-seal guarantees for the producers:

• fair minimum-prices

• direct market-access

• pre-financing (if wished)

• establishing long-term-business-relations (in order to become independant from exploitation by the ruling market-structures)

• for the plantation-workers it guarantees just wages, fair working-conditions and keeping social minimum-standards