Business must understand how to better work with smallholder farmer to ensure global food security
New research for World Fair Trade Day (12 May) by the Fairtrade Foundation, shows with the right investment and support smallholder farmers organisations can increase food productivity and contribute to poverty reduction in rural communities.
The Fairtrade Foundation has launched new research today (12 May) authored by Fairtrade Organisation TWIN, Making International Supply Chains work for smallholder farmers, that indicates how, with better business trading relationships that firmly put people and fairness at their heart, producers can be better empowered to contribute to the development of their own communities.
The research is co-funded by the Co-operative, and looks at six Fairtrade certified farmer organisations across three commodities, cocoa, tea and nuts. The report highlights some of the business interventions needed to help effectively meet growing consumer demand for food products and add value to the supply chain which will in turn help to kick start local economies.
The research highlights areas of good practices that the Fairtrade Foundation is calling on business engaging with smallholder organisations to adopt including:
· Building strong and long-term relationships with farmer organisations so that the farmers will economically be in a more secure position to plan for the future.
· Timely cash payments throughout the year, rather than a one-off payment during harvest season, so households aren’t left without any income for the rest of year.
· Provide farmers with information on the entire value chain of their products, as well as with other useful information on for example commodity prices and global markets.
· See the Fairtrade relationship between farmers and consumers as an asset that can be used to add value to products, for example with producer stories on packaging.
With a growing world population, estimated to rise to 9 billion by 2050 and a 70 per cent increase in global agriculture needed in order to be able to feed the world, the way big businesses, especially buyers who source directly from farmers, is now crucial more than ever.
Beatrice Makwenda, Programmes Coordinator from the National Smallholder Farmers Association of Malawi (NASFAM) says: ‘Farming organisations like NASFAM face many challenges at the moment like increased production costs, impact of climate change and access to finance. Businesses need to recognize that we are the most important part of the supply chain and without us there will be no food. We are asking them to work in closer partnership with us to listen and respond to our needs.’
The Fairtrade system currently works with1.5 million people – farmers and workers – across 60 developing countries. More businesses are working in partnership with Fairtrade and smallholder producer groups as they see the Fairtrade business model as a way of creating long-term and sustainable supply chains. These range from global food brands such as Kraft and Unilever to UK retailers such as Sainsbury’s, the Co-operative Group, Marks and Spencer’s and Waitrose and smaller 100% Fairtrade organisations such as Cafedirect and Divine.
Harriet Lamb, the Executive Director of the Fairtrade Foundation said: ‘The world is finally waking up to the role that small farmers play in food security. What we now need is for businesses, NGO’s and government to understand better the changes that will enable small farmers to thrive. This research highlights the interventions farmers say are needed, everything from credit at the right point in time, to visibility where their product goes. If companies start implementing these kind of changes then we are can start seeing responsible capitalism truly in action.’
Fairtrade has also been looking at other ways that they can work with businesses and companies to support Fairtrade farmers and supply chains. Fairtrade International in partnership with Incofin Investment Management and Grameen Foundation recently launched the Fairtrade Access Fund, an unique investment fund that will provide farmers’ cooperatives and associations with long-term loans to build their businesses.
Smallholder farmers in developing countries have tremendous potential but are held back from growth because they cannot access the financing they need. According to a 2010 survey conducted by Fairtrade International, Fairtrade farmers in Latin America alone say they need $500 million to cover their financing needs, more than half of this for long-term loans.
World Fair Trade Day is an initiative of the World Fair Trade Organization (WFTO) and is a worldwide festival of events celebrating Fair Trade as a tangible contribution to the fight against poverty, climate change and the economic crisis that has the greatest impact on the world’s most vulnerable populations. More than 60 Fairtrade breakfasts will take place in the UK as well as planned events in 17 other countries where there are Fairtrade networks, including Lebanon, Spain, Germany, Switzerland, Ghana, Malawi, Austria, France and Netherlands. Globallyt 70 different countries will celebrate.
The day is also a celebration of Fair Trade Organisations (FTOs) that are 100% fair trade companies, purely dedicated to making all their trading fair by incorporating fair trade principles into the fabric of their entire business. Fair Trade Organisations such as Divine, Café Direct and Liberation, are partly owned by producers. They all have direct relationships with the people growing the products so they can understand the challenges the farmers face meeting quality or quantity requirements and help them overcome them.
When TV comedian Harry Hill visited the farmers in Malawi who part-own Fairtrade nut company Liberation, he found them so inspirational that he worked with them to produce and launch his own brand of Fairtrade certified Harry’s Nuts, from which he doesn’t receive income. To support World Fair Trade Day, he made a surprise visit to an Oxfam store in London yesterday (11 May).
For more information, a copy of the report, interviews or images please contact Faith Mall in the Fairtrade Press Office on 0207 440 8597
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Notes to Editors
1. Making International Supply Chains Work for Smallholder Farmers: A Comparative Study of Six Fair Trade Value Chains, prepared by TWIN, and commissioned by the Fairtrade Foundation, May 2012. http://www.fairtrade.org.uk/includes/documents/cm_docs/2012/M/Making_international_supply_chains_work_for_smallholder%20farmers.pdf
2. Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers.
3. The Fairtrade Foundation is an independent certification body which licenses the use of the FAIRTRADE Mark on products which meet international Fairtrade standards. This independent consumer label appears on products to show that disadvantaged producers are getting a better deal from trade. Today, more than 1.5 million people – farmers and workers – across 60 developing countries benefit from the international Fairtrade system.
4. TWIN work with over 50 democratic farmer organisations in 18 countries representing some 400,000 smallholder farmers. The main focus of their work capacity building, helping farmer organisations to overcome market barriers, adapt to the challenges of climate change and improve product quality to add value to their businesses.
Estimated retail sales of Fairtrade products in 2011 reached £1.32bn, a 12% increase on sales of £1.17bn in 2010nsert body copy.