Benefits of Fair Trade for Producers
Positive Effects of Fair Trade Certification for Farmers
Aug 5, 2009
Based on on-going fair trade research, many consumers of fair trade coffee think that they are buying a product produced through more equitable, just, and humane production methods. The following is a breakdown of the benefits on coffee producer households, organizations, and communities participating in fair trade practices as described in Dean Cycon's book Javatrekker, Daniel Jaffee's Brewing Justice, and Latin American and Caribbean Network of Fair Trade Producers (CLAC) and Fairtrade Labeling Organizations (FLO) impact reports.
The benefits producers receive from fair trade certification stem from their access to the international market, the "social premium" used for community programs, and structural support from fair trade organizations. Individual, small-scale coffee producers are organized into producer organizations. These organizations may be fair trade certified themselves or part of a fair trade cooperative of organizations. This cooperative receives the fair trade certification and must ensure all of the participating organizations are meeting fair trade standards. It is through these cooperatives that households, organizations and, communities (the populations in coffee regions that may or may not be involved in coffee production) receive most of their benefits.
Household Benefits from Fair Trade Production
Increased incomes- Because Fair Trade gives small producers access to international markets and guarantees a floor price, small producers earn a higher wage for their labor. Jaffee found that fair trade workers earned three times as much as those who went through middlemen selling traditional coffee. Additionally, he found that producers received the payment in three installments throughout the year, rather than only once. One of these payments is the advanced payment producers are eligible for which can be as much as 60% of the expected yield (though this advance payment is typically much less).
According to CLAC reports, this increase in incomes correlates with an increase in school attendance for youth who have the luxury to work less as well as with better living conditions.
Social networking- Participation in fair trade networks gives producers access to technical assistance to improve coffee quality and yield, social welfare programs (such as school scholarships or educational supplies), micro credit programs critical for farm improvements, and organizational capacity-building courses. These capacity building courses range in topics from computer skills, organizational structuring, due-diligence and proposal writing, or even negotiation. The strengthening of producer organizations allows individuals to voice the needs of the household in a way that is not possible as a sole voice.
While activists and academics debate how much of this social networking and individual empowerment can be attributed directly to the fair trade movement, few would argue with the positive impact on individuals social networks and building social capital has.
Organizational Benefits from Fair Trade Production
Capacity building- Because fair trade organizations are embedded within a broader support network and are held to certain standards, they are provided with the knowledge and skills to meet those standards and improve their business practices. The benefits organizations cite due to this capacity building are: improvement of farmer business practices, increased quality of coffee beans, adaptation of an open and transparent business practice, access to loan and capital for organizational facilities (for example, an organization can use a loan for a water filtration system to clean the grey water from the coffee processing), ability to negotiate, social empowerment, collective land trusts, and advocacy programs.
Community Benefits from Fair Trade Production
One of the standards of the fair trade certification is the social premium. This is a guaranteed amount paid per pound used for social projects ranging from education scholarships, facility improvement, producer training, clean water projects, or credit programs. These projects are determined at the cooperative level collectively depending on a cost/ benefit analysis.
Fair trade enables local producer communities to join part of larger international solidarity movements based on equity and worker rights.
While the benefits of fair trade coffee are great, there is still a long way to go. The downside to fair trade coffee should be considered by consumers who try to purchase more conscientiously.
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