Global IssuesQ&A: The South Can Also Be Consumers of Fair Trade Products
Fair trade is moving into a different era as developing countries become consumers and not just producers of fair trade products. South Africa is the first country from the South to initiate this shift.
Fair trade could be compared to the free-range chicken of global trade. Yes, the consumer usually in the North - pays slightly more, but then at least the producers more often than not in the South are better off.
The fair trade movement aims to enhance trading conditions for small-scale businesses, improve labour conditions for employees and empower communities through ethical and sustainable trade. Historically the South produced fair trade products and the North consumed them.
However, the awareness regarding the consumption side of trade has grown in the South, says Boudewijn Goossens, the executive director of Fairtrade Label South Africa (FLSA). Originally from the Netherlands, he has lived in South Africa for more than a decade.
This awareness has grown to such an extent that, last year, Fairtrade Label South Africa (FLSA) was established, becoming the first Fairtrade Labelling Organisations International (FLO) developing-producer country with its own Fairtrade Labelling Organisation.
The FLO is a body that certifies products that meet a set of fair trade standards.
On Apr 27, 2009 (Freedom Day in South Africa) the final agreement was signed: no longer will the Fairtrade label be managed by the FLO head office in Bonn. It is now in the hands of the local office in Cape Town.
This is a big step for South Africa, but also for FLO, which needs to transform the traditionally European fair trade concept into a truly global practice.
IPS: I have heard that you had some difficulty convincing FLO in Europe that South Africa has a market for such products inside the country. What happened?
Boudewijn Goossens (BG): In principle fair trade is a very European concept and FLSA is committed to change this. FLO has indicated a move towards a more global approach and we have definitely seen progress. Some within the FLO system were very supportive while others were not.
We are doing something new: selling Fairtrade labelled products in a developing-producer country. We in South Africa are the 'Voortrekkers' (local Afrikaans word meaning pioneers) in fair trade. Also, we are the first country to have a fair trade organisation selling fair trade tourism products and services.
Initially FLO was set up to facilitate the supply chain of fair trade certified products with the developing countries producing and the rich countries consuming.
FLO is now moving to a more global concept with developing countries like South Africa, Brazil, Mexico, China and India being seen as (potential) consuming countries as well. South Africa is the first country with its own marketing organisation. In Africa we intend to create more 'all African' supply chains of Fairtrade products.
For us this basically means facilitating the development of Fairtrade supply chains in Africa from producing through to value adding, labelling and marketing (domestically and for export). It will benefit Africa more if we can export finished products instead of raw materials.
The relationship with FLO has improved dramatically in the last six months and we feel that we are now treated as serious partners. With a potential local market and a booming number of licensees, South Africa is the pioneer in the development of fair trade in the South.
IPS: There is a multitude of fair trade organisations worldwide. How does Fairtrade keep track of whether the basic principles are adhered to consistently?
BG: There is fair trade and Fairtrade. Fairtrade is a brand name and certification mark owned by FLO. FLO is indeed just one of the fair trade organisations - however by far the most known and recognisable in the world. FLO is mostly involved in certifying and labelling agricultural products.
The other major fair trade organisation is the World Fair Trade Organisation (WFTO) and its African arm, the Cooperation for Fair Trade in Africa (COFTA). The main difference with FLO is that it is a membership organisation, not a product certification system.
WFTO/COFTA does not have a product label, only an organisational label. FLO annually audits the farms, the trading companies, the manufacturers and licensees in the FLO system. A licensee has the right to use the label on the product.
IPS: What is the level of awareness of fair trade in South Africa?
BG: South Africa is one of the roughly 60 developing countries producing Fairtrade certified products. We are doing wine, various fruits, fruit concentrates and rooibos tea. Currently about 60 local farms and cooperatives are producing Fairtrade products, which are mainly exported.
The awareness is still limited, but there are two phases planned in terms of the promotion of Fairtrade: The first phase runs until the end of this year and will focus on business and marketing planning. At the same time we will try to get more licensees for the label.
Phase two includes reaching out to consumers and other buyers (organisations). We will assist Fairtrade licensees to increase the sales, to get retail interested in selling the products and to get new products on the market, as well as increasing awareness amongst the general public.
IPS: Apart from South Africa, are there other markets for Fairtrade products in Africa?
BG: Not for Fairtrade, though there are some local initiatives of fair trade shops, but these are not coordinated. With regards to African producer countries, the Southern African Fair Trade Network (SAFN) joined their East and West African counterparts for training in Germany earlier in 2009.
The meeting and training were greatly significant as they showed a strong commitment from the FLO to listen to producer networks like the African Fairtrade Network (AFN) when making decisions.
IPS: What impact has Fairtrade had on the way international trade takes place?
BG: Fairtrade labelling has been around for 21 years. Now there are 21 countries with organisations supporting the label and a few eastern European countries with satellite offices. More than 6,000 products have been licensed to carry the Fairtrade Mark, globally.
Direct impact includes social investments (out of the social premiums paid to the beneficiaries) on Fairtrade farms, improved labour conditions and better environmental management.
Indirect impact includes that poor labour conditions and unfair trading conditions are put on the agenda of small and large companies, governments and NGOs. Fairtrade also triggered the establishment of other ethical programmes with similar aims: to protect workers and small producers.
IPS: Fairtrade has social, political and ecological aspects to it. Is there growing emphasis regarding any of these aspects?
BG: I would say that the social aspect is the leading one. Fair treatment of people and fair trading conditions are important aspects we want to address with Fairtrade. Political and ecological aspects are secondary aspects.
IPS: What effect does the current global economic crisis have on Fairtrade? Are people rather going with the cheaper, non-Fairtrade products to save money?
BG: The FLO’s 2008 values of the global production and sales show how global commitment to fair trade is not crunching along with banks.
Despite the negative downturn of the global economy, Fairtrade sales grew by an impressive 22 percent in 2008, with peaks of over 70 percent in Australia, New Zealand, Norway and Sweden and averages of around 50 percent in other countries.
In the last five years, global sales of Fairtrade certified products grew by approximately half a billion euros per year, reaching the record figure of 2,9 billion euros in 2008.
These values confirm the status of Fairtrade as a successful emerging market, whose market share more than doubled in the last four years and has never shown negative growth.
The historical commodities of coffee and bananas have reconfirmed their prominent place on the Fairtrade sales podium with respectively 1,2 billion and 0,5 billion euros in retail value, although surprising record growth is seen with tea and cotton, whose growth ratios increased by 112 percent and 94 percent, respectively, from the previous year.
IPS: More politicians, especially in Europe, support fair trade. Do you see any growing support amongst politicians in developing countries?
BG: We had our first meetings with the South African department of trade and industry and the Southern African Clothing and Textile Workers Union (SACTWU) about introducing Fairtrade clothes. I believe that the support amongst South Africa politicians will grow as they get familiar with the Fairtrade principles.
What Fairtrade aims to achieve is completely in line with government policies. We have also introduced a FLO Broad-Based Black Economic Empowerment policy that is compulsory for all Fairtrade farms using hired labour. (The ANC government is implementing black economic empowerment policies as part of its redistribution agenda to redress apartheid inequity.)
This policy is stricter than the government policy. I personally believe that labour conditions should have been part of the B-BBEE scorecard, but it is not. Fairtrade fills this gap.
IPS: What drives you to do this work?
BG: It gives a lot of satisfaction. It is my passion to give the less privileged in the world a stronger position. I work for them. I open up a new market and try to increase the sales of Fairtrade products so more producers and workers will benefit.
© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service