Fairtrade standards

Fairtrade standards are not simply a set of minimum standards for socially responsible production and trade. The Fairtrade standards go further in seeking to support the development of disadvantaged and marginalized small-scale farmers and plantation workers. Fairtrade standards relate to three areas of sustainable development: social development, economic development and environmental development.

In summary the key objectives of the standards are to:

• ensure a guaranteed Fairtrade minimum price which is agreed with producers
• provide an additional Fairtrade premium which can be invested in projects that enhance social, economic and environmental development
• enable pre-financing for producers who require it
• emphasize the idea of partnership between trade partners
• facilitate mutually beneficial long-term trading relationships
• set clear minimum and progressive criteria to ensure that the conditions for the production and trade of a product are socially and economically fair and environmentally responsible.

For each area there are minimum requirements that a producer organisation must meet in order to be certified and progress requirements in which the certified organisation must demonstrate permanent improvement over time. For example, a minimum requirement is a ban on the use of agrochemicals in the FLO list of prohibited materials. A progress requirement is the ongoing reduction in the use and toxicity of permitted agrochemicals. In this way, the standards enable poorer, more vulnerable farmers to enter the system, while supporting them to gradually improve their practices. It is recognised that the degree of progress depends on the level of economic benefits the organisation receives from Fairtrade and on the specific context of each organisation.

Fairtrade standards need to be met by producers and their organizations (Generic Producer Standards and Product Specific Standards) and by the traders who deal with Fairtrade products (Trade Standards, Product Specific Standards and the Foundation's Fairtrade Standards).

The Foundation's Fairtrade Standards are for all companies in the UK who trade in Fairtrade products. This incorporates the FLO Trade Standards and Product Specific Standards and can be found here. You can read the Producer Standards, Product Specific Standards and Trade Standards on the FLO website.

Coffee, cocoa, cotton and rice are among the many products that are grown by independent small farmers, working their own land and marketing their produce through a local co-operative. The priorities for these producers include a fair and stable price for their crop, improved and long-term market access, and the availability of pre-finance when required.

The Generic Fairtrade Standards for Small Farmers’ Organisations apply to small-scale farmers who are organised into co-operatives or other associations that have a democratic structure and transparent administration.

The structure and composition of small-scale farmers’ organisations varies from country to country and according to the organisations’ stage of development: while a primary level co-operative might comprise 50 farmers from the same village with very small plots of land, a secondary level co-operative union might include twenty member co-operatives representing several village co-ops and thousands of individual farmers. The size of land owned by individual members can vary considerably according to membership rules, cultural norms and other factors.

In terms of social development criteria, the standards state that farmers’ organisations must have a democratic structure and transparent administration to enable effective control by its members; the organisation should also have the potential to promote the social and economic development of its members; and there must be no discrimination against members on the basis of race, religion, gender, politics, and ethnic or social origin.

The economic development criteria ensure the organisation’s ability to effectively export their product and to effectively administer the Fairtrade premium, in a transparent and democratic manner, on behalf of its members.

The environmental development criteria are intended to ensure that the producer organisation and its members protect the natural environment and make environmental protection an integral part of farm management. There are clear rules to protect farmers and workers relating to the use of chemicals, disposal of waste, and protection of natural resources. The standard also prohibits the use of genetically modified organisms. Where socially and economically practical, producer organisations are encouraged to work towards organic practices. They are also expected to minimise the use of chemical fertilisers and insecticides and to gradually replace them with natural fertilisers and biological methods of disease control.

More information on Fairtrade Standards for Small Farmer Organisations can be found here.

Tea, bananas, grapes and flowers are among the many products grown on commercial farms. Workers can participate in Fairtrade if they are organized (normally into trade unions) and if the company that they work for is prepared to promote its workers’ development and to share with them the additional revenues generated by Fairtrade. The standard covers all workers including migrant, temporary, seasonal, sub-contracted and permanent workers. The term workers is limited to those who can be unionised and therefore excludes middle and senior management.

Companies working with hired labour can be certified if they comply with the requirements of the standards to pay decent wages, guarantee the right to join a trade union, ensure health and safety standards, and provide adequate housing and other social provision where relevant. Eligible companies include commercial or privately-owned farms, estates, plantations, and sportsball stitching centres. The standard also applies to processing factories located on tea estates and flower farms. The priorities for the workers (or hired labour) employed by these companies are generally decent wages and working conditions.

In the Hired Labour standards, the social development criteria are intended to ensure that companies recognise and support Fairtrade as a means to increase the empowerment and well-being of their workers. They protect workers’ basic rights as defined in the conventions of the International Labour Organization (ILO) relating to:

• freedom from discrimination (on the grounds of race, religion, gender, politics, and ethnic or social origin)
• freedom of association (the right to join a trade union) and collective bargaining
• fair conditions of employment (wages, working hours, overtime, sick pay, leave etc)
• no forced or child labour (minimum age of 15 years)
• occupational health and safety (a safe working environment).

The economic development criteria ensure the use of the Fairtrade premium for the social and economic benefit of the workers, their families and their communities. The premium cannot be used for the benefit of the company owners. A Joint Body is set up, comprising elected worker representatives and a minority of management representatives whose role is to assist and support the Joint Body in the management of the premium fund. The premium is invested in projects agreed by the Joint Body following consultation with the workforce. Workers’ representatives receive appropriate training in areas such as finance, record keeping, and administration in order to build their capacity and ability to deal with their additional Joint Body responsibilities.

Beside the premium administration it is expected that the establishment of Joint Bodies will have other positive outcomes such as the development of good working relationships between the management and workers; the empowerment of members through the process of working with Fairtrade; the acquisition of skills in leadership and communication, project planning and project management necessary to function effectively; developing the capacity to operate without further assistance.

The scope of the environmental development standards is the same as for small farmers’ organisations and is intended to ensure that companies protect the natural environment.