Being part of a Fairtrade-certified producer organisation can improve farmers’ economic resilience, social wellbeing and environmental sustainability, according to a new study commissioned by Fairtrade Germany and Fairtrade Austria.
The study, Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development, suggests that Fairtrade certification also leads to good governance in co-operatives.
And researchers found that Fairtrade standards, Fairtrade pricing, and producer support programmes positively impact certified farmers and their communities compared to non-Fairtrade certified farmers, particularly in times of difficulty and distress.
They examined the same producer organisations three times over 10 years, and studied the performance of a cocoa co-op in Ghana, a coffee co-op and three banana co-ops in Peru and found their farmers had higher earnings and more savings than those in comparable non-Fairtrade organisations. For example, coffee farmer members of the Fairtrade-certified La Florida co-op in Peru reported incomes 50% higher than those of non-Fairtrade farmers.
“In times of crisis, it becomes evident that Fairtrade enhances farmers’ economic resilience and supports them in continuing their profession in challenging times,” said Tatjana Mauthofer, researcher at Mainlevel Consulting and co-author of the study. “The study shows that the two Fairtrade mechanisms – the Minimum Price and the Premium – represent a crucial safety net for farmers, their small producer organisations and eventually, also their communities.”
The research assesses Fairtrade’s contribution in terms of economic resilience, social wellbeing, good governance and environmental integrity and builds on two previous studies (in 2012 and 2018) featuring the same Fairtrade-certified producer organisations.
The study makes several recommendations, including supporting product and income diversification to reduce farmers’ vulnerability and enhance their resilience; setting up credit schemes to enable farmers to modernise their farms; and providing training on financial literacy for coffee, cocoa and banana farmers.