Experts gathered at the International Fairtrade Conference in March 2016 to discuss the market for fair trade products.
Fair trade offers additional income to agriculture in particular, by a direct transfer for social and environmental services in the price of the goods. According to Pavan Sukhdev, conventional trade causes external costs of USD 2.15 trillion a year. Sukhdev is managing director of ‘Green Initiative for a Smart Tomorrow’ (GIST), which produces sustainability reports for large multinational groups. These reports allow companies to present their social and environmental services in addition to their production. From June 2016 the portfolio of business parameters is to be supplemented by the 'natural capital’ index.
As Sukhdev himself admits, this has its limitations. For example, the parameter ‘employment of women’ reflects the quantitative proportion by means of a quota, but does not indicate the quality of women's recognition. Nevertheless, this form of 'second price label’ offers good guidance to consumers in industrialised nations wanting to make a ‘better choice'. Even if growth in Asia is lasting, it will only slowly decrease the numbers in absolute poverty, as the Asian Development Outlook 2016 recently showed.
More and more Germans are buying fairtrade products
Germany has a growing number of buyers of fair trade products, partly because they are distributed through discount outlets. ‘For us, “Fair Trade” is an extended arm for setting our conditions locally,’ explains Florian Schütze, responsible for social affairs and the environment at Lidl International. But is this possible if fair trade products are on the shelves next to cheap articles? Schütze: ‘In the retail business we have to take a range of consumer wishes into account.’
Achim Lorie, director of corporate social responsibility at Tchibo, explains the background. The coffee roaster processes around 200,000 tons of raw coffee a year for Germany. ‘One single label isn’t enough to cover our needs.’ For the entry-level price segment, a coffee is offered which meets minimum standards and in the trade represents the competition to other coffee suppliers. Higher-priced coffees with more sustainability parameters are advertised in the smaller segment in the “flavour profile”. Here, customers willing to pay the price not only find their personal taste but also their place in the fair supply chain.
Fair Trade Road Map 2020
To give space for even more people in the supply chain, Larry Attipoe, director of Fairtrade International, presented the Fair Trade Road Map 2020 in Berlin. Currently, 1.65 million people benefit from fair trade products. More than 1,200 producer cooperatives have been formed in 74 countries. By 2020, 50 per cent of coffee traded worldwide, 40 per cent of traded cocoa beans and 80 per cent of all bananas will be fair trade. This trio was chosen because these fruits have the greatest leverage in the fight against poverty and hunger. To achieve this goal, greater attention will be given to the political aspect. For example, fair trade markets could present the products more prominently to the global middle class.
Author: Roland Krieg