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What is FAIRTRADE ?

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“

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What is FAIRTRADE ?

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

  2. 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 environment 2) set of social and ecological minimum standards 3) future for almost a million families in 43 LDCs (low developped countries)

  3. 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.

  4. 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...)

  5. 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... )

  6. 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

  7. 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

  8. 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...

  9. 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

  10. Producers –working men and women in smaller plantages and in the manufactoring process 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

  11. 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

  12. FAIRTRADE - the positive globalization

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

  14. 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

  15. 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

  16. FAIRTRADE-labelled bananas... come from small-farmers-cooperatives and plantages in • Columbia • Costa Rica • Dominican Republic • Ecuador (world-leading-banana-exporter) • Ghana • Windward Islands

  17. 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

  18. 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

  19. 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, ...)

  20. 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!

  21. 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

  22. „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

  23. 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)

  24. Contact-information (Austria) FAIRTRADE Austria Wohllebengasse 12-14, 1040 ViennaTel.: +01/533 09 56; Fax: DW 11office@fairtrade.at; www.fairtrade.at

  25. Guarantees a better deal for producers

  26. 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

  27. 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

  28. 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.

  29. 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

  30. 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...

  31. 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

  32. FAIRTRADE - (and other) Coffee - example 1:„How much money stays at the producer?“ (smallfarmer/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

  33. 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.

  34. FAIRTRADE – bananas: • 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.

  35. 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.“

  36. 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“.

  37. 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

  38. 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.

  39. FAIRTRADE bananas in Austria: • Since market-introduction in february 2002 2,9 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

  40. 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.

  41. 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.

  42. 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-dollar 9,-- US-dollar

  43. 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!

  44. 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

  45. 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.

  46. 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.

  47. 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

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