This year’s Fairtrade Fortnight is themed around fighting the exploitation of small-scale farmers. But what about the workers employed by these farmers and other larger producers?
Finding exploitation in your supply chain
One of the risks behind the Fairtrade label can be the treatment of workers employed by producers: whether they are working for a large co-operative or a smallholder farmer, the rights of these ‘wage workers’ can go unnoticed.
The treatment of these workers is taken into account for Fairtrade certification, but it’s difficult to police, says Dr Carlos Oya, a lecturer in political economy at SOAS University of London, who has researched the issue in Ethiopia and Uganda. He found that people employed by smallholder farmers were not being monitored and that Fairtrade did not have a positive (or negative) effect on their wages or working conditions.
“The problem is the assumption that small producer organisations are producers only – so the certification only applies to producers … the people missed out completely are casual and seasonal workers who work for smallholder producers,” says Dr Oya.
“Fairtrade’s response is that it is impossible to monitor, and we agree, it’s really difficult – but that doesn’t remove the problem.”
A study by the United States Agency for International Development (USAID) also discovered that Fairtrade is highly ineffective in reaching those who depend on a wage through agricultural labour.
What is Fairtrade doing?
The issue of exploitation fits in with the theme of this year’s Fairtrade Fortnight, which is fighting the exploitation of small-scale farmers. There are over 1.4 million farmers and 204,000 workers spread across more than 74 countries participating in Fairtrade.
What does the Fairtrade Foundation mean when it talks about addressing exploitation? Adam Gardner, communities campaign manager, explains: “The food on our tables, the tea and coffee in our mugs, all come from farmers who work hard but are not paid what they deserve.
“Whether in the UK or in Malawi, no one deserves to be short-changed for a hard day’s work. When we reach for the cheapest products, we may be unconsciously feeding exploitation. We become part of the problem, but we can make a conscious choice to be part of the solution and support trade that is fair.”
Fairtrade’s revised standards for hired labour, which came into effect in 2015, said that all workers must be on the Fairtrade Premium Committee, which is responsible for the management of the Fairtrade Premium.
In addition, they have the right to join an independent union to collectively negotiate their working conditions. Another criterion is that salaries must be equal or higher than the regional average or than the minimum wage in effect.
In 2016, Fairtrade, together with the Global Living Wage Coalition, published a number of living wage benchmarks.
The organisation also provides additional training initiatives and multi-stakeholder dialogues to form consensus on the measures needed to close the gap between living wage level and current wages from an industry point of view and with groups on the ground.
The issue of hired labour
Many Fairtrade producers, such as those producing coffee, have fixed seasons and require temporary workers. Wilbert Flinterman, senior advisor on Workers’ Rights at Fairtrade International, says this is a challenge and the organisation works closely with farmers in many ways.
“In terms of standards we say that employers have to ensure that wages and benefits are similar for permanent and seasonal workers,” he says.
“It’s clearly more challenging to verify compliance of contractors but that’s what we expect of operators. Many farmers certified are to an extent operating in the informal sector, where they are not receiving social benefits. They are small producers so that impacts on our ability to collect information from them.”
Mr Flinterman added: “Our aim is improve the economic justice in the value chain so that farmers are able to gain income and support workers. Our focus is to help farmers make the transition from formal to informal sector in such a way that is economically sustainable for them.
“For example, we provide training to banana farmers on HR practices so that they gain skills and knowledge to provide better employment conditions to workers and put policies and procedures in place.”
Fairtrade International also ran an HR training programme in Peru in 2014 that will be rolled out in other countries in Latin America. According to Mr Flinterman, the project was a “significant success judging from the feedback”.
He added: “We worked with local people, strongly supported by producers themselves. We developed training in such a way that is relevant to smallholder farmers. We helped them to set up a very basic database for personnel administration, policies and procedures, dispute resolution, informing farmers about workers’ rights and occupation health and safety. This all works toward the objective of treating people equally.
“We have to make sure that Fairtrade is accessible to smallholder farmers, so that thresholds to enter Fairtrade and benefit from instruments, support services and market access provided by Fairtrade are not too high and we have to understand that after certification we still have to work with farmers in the process of development.”
A problem of context?
London University’s Dr Carlos Oya says that alongside the labour monitoring issues, a problem is the existing context in each country and the specific characteristics of smallholder producer organisations.
“Despite interventions of Fairtrade and other certification systems, a lot of the dynamics of these producer organisations cannot be changed rapidly –the power inequality in them is very hard to tackle,” he says.
Dr Oya says the reporting mechanisms of these certification systems are not enough to alter those conditions. “Yes, a co-op can give evidence of assembly with members, where they make decisions democratically about using premiums, but that is a formality, are they actually working democratically?
“The fact these members in co-ops have greater power than others, shape what others think, is a very important aspect of this project. Producer organisations are complex, there are a lot of power relations in them and a system of formalities in auditing doesn’t necessarily alter the system of power, most members inactive, the ones who call the shots are in the headquarters of the co-op.”
Dr Oya pointed out that in the region covered by his research, co-operatives tend to have been set up by the government as a way for state to organise distribution.
“The notion of co-operative is stretched to any collective of producers who share some infrastructure for marketing purposes,” he adds.
“It is not possible to say co-ops are better because the boundaries are blurred. It is difficult to know if it is a co-op or normal producer organisation.”
But he welcomed the work done by Fairtrade in collaboration with other organisations on as part of the Global Living Wage coalition. He added that setting out living wage standards for different countries would require a lot of research.
Supply chain involvement
Stirling Smith, who has worked as a consultant with the ILO, Fair Labour Association, Ethical Trading Initiative, trade unions, NGOs and the Co-operative College, says the potential of trade between co-ops to help ensure a fairer supply chain was often neglected.
He believes co-ops should consciously ask themselves how they can reshape the supply chain and seek to find co-operative suppliers for the products they need. He gave the example of FinTea, a Fairtrade project involving 11,000 Kenyan tea farmers.
After receiving the Fairtrade certification, FinTea Growers made its way to the shelves, becoming part of the Co-operative Group’s iconic 99 Fairtrade Tea in the UK.
The Co-operative College designed the training to help the farmers to establish their own co-operatives, in collaboration with the Co-operative College of Kenya. The Co-operative Group co-funded the project and is buying from the producers.
“It’s an interesting example because if you look at the increase of income for those tea farmers, it was cutting out the middleman rather than the Fairtrade Premium that really helped them. They sold to the co-op and kept the margin.”
Simel Esim, chief of the ILO’s Cooperatives Unit also believes co-ops have a part to play in the supply chain: “Unleashing the potential of co-operatives for fair trade is something that needs to be on the national, regional, international policy makers’ agendas,” she says.
“And at the same time, co-operatives need to do more to – and do better at – improving their labour and environmental practices toward a more sustainable future.”
Fairtrade Labelling Organizations International (FLO International, or Fairtrade International): Established 1997. An association of 3 producer networks, 19 national labelling initiatives and 3 marketing organizations that promote and market the Fairtrade Certification Mark in their countries.
Fairtrade Foundation Established 1992. The British member of FLO International. An independent charity that licenses use of the Fairtrade Mark on products in the UK in accordance with internationally agreed standards.
WHAT DOES THE RESEARCH SAY?
- A 2013 study by researchers at the University of Göttingen found that Fairtrade certification cuts the likelihood of being poor by 50% in Uganda – but the impacts of standards and certification systems largely depend on many factors at local level.
- A study by LEI Wageningen (commissioned by Fairtrade International) found that Fairtrade workers feel more empowered than their non-FT counterparts, though no strong differences are found for all empowerment issues. However, the report could not conclude whether overall working conditions (in terms of worker rights) on Fairtrade-certified plantations were better than non-certified plantations.
- USAID research suggests a key issue to consider over the effects of Fairtrade is the assumption that rural poverty is mainly a problem for smallholder farmers rather than wage-workers employed by producers. Wage work is included in certification standards, but the research said Fairtrade has been shown to be highly ineffective in reaching the poorest members of the respective communities. The USAID report warned: “Simply raising farm gate prices does not automatically raise wages or improve working conditions, and as a result a well-intentioned initiative such as Fairtrade has failed to improve the lives of the poorest people in rural communities.”
- Another recent study on Fair Trade, Employment, and Poverty Reduction (FTEPR) in Ethiopia and Uganda assessed Fairtrade’s effects on wageworkers and employment. The research compared rural areas dominated by Fairtrade-certified producers with areas where Fairtrade is absent, focusing on coffee, tea, and flower production. The findings confirmed that households that are engaged in agricultural wage labour are likely to be among the poorest in their communities. In addition, the study argued that Fairtrade certification had no statistically significant positive effect on the working conditions of manual agricultural wageworkers.
WHAT CAN CO-OPERATIVES DO?
Employers with a turnover in excess of £36m are obligated under the Modern Slavery Act 2015 to eradicate modern slavery in their business and supply chain. But what else can co-operatives do?
Voluntarily adopt an anti-slavery statement and carry out their own investigations into the supply chain. Wholefood co-operative Suma, for example, ensures producers are compliant with the Ethical Trading Initiative Base Code, which dictates, among other things, that working conditions are safe, child labour is not used and that living wages are paid. In helping to eradicate modern slavery it asks suppliers to complete ethical questionnaires to ensure there is no slavery or trafficking in the supply chain.
Create your own statement: Co-operatives UK has designed a series of resources, including an anti-slavery statement template, to get co-ops started, which is available online at s.coop/modernslavery.
Other useful resources: