Fair Trade in Europe

1st Fair Trade event in Lyon, 1-3 February 2008
ICV Team at Equi'Sol
ICV Team at Equi'Sol
Kema Lemba, French translation Ylana Sttret, traducción española Ana Beltran
04 March 2008

"The needs of small farmers, whether they grow coffee [in the South] or produce [in the North], may be quite similar. Both groups need better access to and more control over the market. That can only happen if consumers use their market power to vote for fair prices to the grower, better access to financing for small farmers, and more environmentally sustainable production."
Rink Dickinson, Co-Director, Equal Exchange

The very first Fair Trade fair was held in Villeurbanne, Lyon, France. It was organized by EQUI'SOL (www.equisol.org), a French non-profit association, created to promote all reliable Fair Trade systems, and its European and French partners. A spectacular exhibition area of approximately 4000 square metres was set up with exhibitors from all over Europe, Asia, Africa, South America and Canada, displaying a wide variety of products ranging from textiles, to agricultural produce and crafts.

ICV' volunteers were there to provide interpretation from and to French and English in the different workshops and round table discussions that were held.

According to Equi'sol President, Olivier Schulz, all parties, from the supplier to the consumer, have certain responsibilities depending on their position in the chain. These responsibilities could range from ensuring environmentally friendly processing methods, to domestic garbage disposal. In addition to responsibilities they also have different needs and goals. The encompassing idea behind this Fair Trade fair was to bring together the different actors (NGOs, buyers, finance organizations, public authorities and indeed consumers) in order to highlight the diversity of their objectives and their possible complementarities. It was hoped that this would enhance all the players' awareness of each others' roles to enable better and more efficient cooperation. As Mr. Schulz put it "the idea is that all who come here must know what everyone else does, take it back home, improve on it, adapt, and possibly integrate it into their own system." The fair was focused on:

  • Impact of companies and societies in developing countries (southern countries);
  • Public procurement;
  • Textiles.

The idea of Fair Trade originated from a desire to improve the living and working conditions of producers in Southern countries. It was based on principles such as paying fair prices and wages for any work that is done, business relationships based on partnerships, respect for the environment, etc. It is, therefore, fundamental to understand how Fair Trade really impacts on the people involved at its core.

Fair Trade is crucial for the livelihoods of those in developing or under-developed countries. It is seen as a way of facilitating new projects and partnerships. As such, raising public awareness of Fair Trade in those countries that could benefit from it is a matter of great importance. However, as the Mayor of Villeurbanne, Mr. Jean-Paul Bret pointed out, Fair Trade practices are not there to benefit only those from the South, but also those producers within Europe who may not have the advantage larger corporations enjoy. In the Rhône-Alpes Region, for example, 10 million Euros is set aside every year for promotion and support of Fair Trade projects and initiatives. The idea is to ensure that collective and cooperative agreements are set up which are sustainable in the long run.

The impact of Fair Trade on developing countries is analyzed at different levels: family, organizational and territorial. One success story that excels in all these categories is BANELINO, the Association Ecological Banana of the Northwest Line, a cooperative group of over 300 small producers of a small region in the Dominican Republic. Banelino exports mainly to England, Germany and Italy. The cooperative has Fair Trade certification, granted by the Fair-trade Labeling Organization (FLO) (www.fairtrade.net), EUREPGAP certification (www.eurepgap.org), as well as ORGANIC certification. Thanks to Fair Trade, Banelino supports 10 educative centers that take care of babies, children and adolescents; it has a medical clinic and offers health programs in 15 communities. It has programs of fumigation against dengue and malaria and also collaborates in the promotion of sports to keep children and adolescents away of the consumption of drugs and alcohol. The guarantee of a market for their produce at a fair price has significantly improved the quality of lives of not only families directly involved in the banana plantations. Other peripheral businesses in the region have prospered because there is disposable income available in the territory.

However, this storybook scenario is not always the case. Synergies and complementarities between actors do not always happen. In most cases, it is because the basic technical skills may be present but management and financial skills needed to draw up business proposals, ensure accountability, manage logistics and day-to-day operations may be missing. In such cases, it may not be possible to even get Fair Trade Certification, or let alone financing, which is a crucial ingredient in any operation, without these qualities. This is where governments and organizations in developed countries must come in. They should provide basic support in terms of training and finances to help those marginalized producers in impoverished countries to get them to a level where they can be given Fair Trade certification. Supporting local micro credit institutions can be a way to provide financial assistance without harboring too much risk. Unfortunately, some organizations, especially large ones, only go into Fair Trade arrangements so that they can have access to financing. The problem with this is that large corporations do not care about their territory in general, unlike the small producers, who live within the communities and try to do what is best also with a medium and longer term vision around respectful farming.

Fair Trade places large emphasis on ethical and responsible public procurement. There have been concerns that the growing worldwide demand is putting pressure on producers to grow more and more. It is feared that this will force an increase in production to a level where the environment may begin to suffer. An example is the use of fertilizers to speed up the maturity of certain crops. Another fear is that this increase in demand may give larger corporations just the incentive they need to make up for the shortfall that small producers may be unable to. These large companies may wish to have FLO certification even without meeting all the criteria. This fear has been curbed by ensuring that small producers have representation in FLO so they can be involved in the process of giving of certification. Those responsible for procurement must have as much information as possible regarding the origin of their products and act responsibly thereof. Another issue concerns the purchasing of products that have elements of child labor in their production. Buying such produce will only further encourage the practice. Those procurers must make very clear all their terms and conditions that govern their buying practices and ensure that any infringement of these will nullify any agreements. Fair Trade terms must be negotiated and the best way is to have local Fair Trade platforms and rule setting criteria. This is one sure way of ensuring responsible public procurement.

Cotton is a highly contentious product. There are a fairly large number of operators that intervene between the production of this raw material and its final product (textiles). This makes the textile sector of Fair Trade a very complex sector, with its three main stages of production, processing and distribution. Fair Trade works with producers in developing countries, helping them develop their technical, management and economic skills to encourage an even more sustainable level of trade, Fair Trade is trying to encourage producers to go a step further and stat processing their cotton into a more finished product. The distribution stage is a bit more complex as it involves issues concerning legislative, logistical and economic obstacles, consumer demands, exchange regulations, competition, etc. Fair Trade practices must encompass all these issues, and many more to be able to guarantee Fair Trade benefits trickle down all the way to the final consumer.

A very important point that must not be ignored or forgotten about is that respective governments have a major role to play in Fair Trade being a success because they are the main stakeholders in the welfare of their citizens and all organizations, institutions and companies in that they provide the platform and framework that facilitates all trade related activities.

In today's global economy, rules and regulations governing growers to sell their produce at fair prices have been dismantled by liberalization of goods, services and capital. This means only the "strongest and fittest" will survive. The Fair Trade initiative gives hope to those who cannot survive the competition against the larger, more resourceful corporations.

"The fair price is a solution. It has given us the chance to pay a good price to our farmers. Those who are not in Fair Trade want to participate. For us it is a great opportunity. It gives us hope."

Benjamin Cholotío - Guatemalan Coffee Farmer

"Fair Trade is part of a larger movement about corporate social responsibility, influenced by the public's desire to deal with companies that are (committed) to workplace quality, the environment and employee well-being."
Mac McCoy, President, the Tibet Collection

For more information please visit: www.salon-europeen-commerce-equitable.org

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