More opportunities for farmers through new Fairtrade Sourcing Programs

For many years the familiar sight of the blue and green Fairtrade mark has been a beacon for ethical shoppers. But under the new Fairtrade Sourcing Programs, things...

For many years the familiar sight of the blue and green Fairtrade mark has been a beacon for ethical shoppers. But under the new Fairtrade Sourcing Programs, things are about to change as Fairtrade pioneers a new way for farmers to sell their produce all over the globe.

The initiative will allow manufacturers to source single commodities such as cocoa, cotton and sugar on Fairtrade terms and then carry a new specific FSP logo if they source 100% of that specific Fairtrade ingredient. Until now, they had to source everything that could possibly be Fairtrade to earn labelling certification.

Items made with a specific Fairrade ingredients will soon be able to carry a new Fairtrade Sourcing Program logo
Items made with a specific Fairtrade ingredients will soon be able to carry a new Fairtrade Sourcing Program logo

Mars is the first UK company to commit to the new Cocoa Sourcing Program; all Mars bars in the UK and Ireland will use Fairtrade cocoa by autumn 2015. The multinational has also pledged to source its entire cocoa supply from Fairtrade farmers by 2020 and is now working with Fairtrade cocoa co-operatives in Cote d’Ivoire with the aim of enabling farmers to boost sustainable production and cocoa yields and improve local livelihoods.

The move will take total Fairtrade premiums paid by Mars to cocoa co-operatives in West Africa to over $2m per year by 2016. A total of 14 chocolate manufacturers, including Italian giant Ferrero and German company Riegelein, are also set to buy through the new programme.

Bodies such as the UK’s Fairtrade Foundation and the Co-operative Group wholeheartedly endorse the move, which means major companies can make big commitments to sourcing one or more specific commodities for use across specific ranges, or even their whole business.

However, Divine Chocolate, a major supplier of chocolate to the Co-operative Group, which sources 1,000 metric tons of Fairtrade chocolate every year and ensures all its ingredients are Fairtrade, has expressed concerns about the venture.

Sophi Tranchell, managing director, fears that multinationals would escape fuller Fairtrade commitments under the new rules.

“This latest version of Fairtrade means it is now possible for a company to have certified products with surprisingly low percentages of cocoa in the ingredients and no incentive to increase that percentage,” she says. “Fairtrade sugar farmers could miss out on the potential of supplying one of the major ingredients of these products.”

That view is not shared by the Fairtrade Foundation, the UK voice of Fairtrade, which supports over 1.4 million farmers and workers in 1,140 producer organisations globally.

“We have launched the Fairtrade Sourcing Programs for cocoa, sugar and cotton so businesses can come to us and see if we can help them source from the Foundation,” says UK public engagement director, Cheryl McGechie. “The purpose is to deliver more sales for farmers. In the UK we have grown our cocoa from 1% to 10% of the market in the last few years but that growth needs to continue. We need to be able to offer new things in the market and be able to introduce a different way for businesses to engage with us.

“Lots of multinationals are looking to make a long-term commitment to sourcing ingredients and it is very important that Fairtrade farmers are able to access that. If we only offer one way of engagement then we don’t maximise business.”

Ms McGechie acknowledges there have been some concerns over the changes, but she is keen to emphasise that the new branding makes a clear distinction between products which have sourced a particular ingredient and those which are fully Fairtrade.

“Germany, Netherlands and Switzerland all launched the Fairtrade Sourcing Program before we did. We were conscious that the UK had more existing business than they did and we wanted to make sure our consumers were not confused. So we waited a year to see how it went and we have developed a set of marques which look quite different,” she says.

“There will always be companies like Divine which set the bar high and are at the forefront of Fairtrade – the logo we know and love still gives credit to brands which source all their ingredients from Fairtrade suppliers. But we feel quite satisfied that consumers will recognise this as something different and appreciate the opportunity to be able to buy more goods with Fairtrade ingredients.”

The FSP initiative has also been developed in response to challenges in extending the market. Some European manufacturers have resisted calls to switch to Fairtrade cane sugar from beet on grounds of taste – and there are also complex EU labelling rules to be negotiated. ‘Swiss’ chocolate, for example, must be made with Swiss sugar.

Sales figures released by the Fairtrade Foundation also show that both the volume and the retail value of Fairtrade sales have been impacted by challenges affecting the mainstream grocery sector. In 2014, the estimated retail value of sales of Fairtrade products was £1.67bn, down 3.7% year-on-year.

Michael Gidney, chief executive at the Fairtrade Foundation, says: “Our main concern now is that increasingly aggressive competitive behaviour in the grocery sector could undermine the volumes farmers and workers are able to sell on Fairtrade terms; this will result in real losses to hard working families and communities in some of the poorest countries in the world.

“We are entering a new era in Fairtrade’s work with cocoa farmers in West Africa, increasingly connecting forward-looking businesses like Mars more directly with entrepreneurial cocoa co-operatives who themselves want to be at the forefront of product quality, productivity and rural community improvement. Cocoa farmers constantly tell us they are anxious to sell more of their crops on Fairtrade terms, and we know how it can start to change their lives when they receive fairer rewards for their efforts.”

But for some Fairtrade producers, access to the UK and European market looks set to become even more challenging.

Fairtrade currently works with 62,000 sugar cane farmers in countries including Belize, Jamaica, Malawi and Zambia, and 167,000 cocoa farmers in countries such as Cote d’Ivoire, Ghana and the Dominican Republic, enabling them to increase their productivity, improve their businesses and invest in a wide range of community projects such as educational grants, health clinics and access to safe drinking water.

In February, the Fairtrade Foundation launched Sugar Crash, a report highlighting the crisis facing sugar cane farmers in developing countries because of an EU reform that will lift the cap on European beet sugar production by 2017.

Small-scale sugar cane farmers in the Africa, Caribbean and Pacific region’s least developed countries (LDCs) – including Jamaica, and some of the world’s poorest countries such as Malawi – will struggle to compete with European sugar beet farmers, who receive subsidies from the EU.

According to research from the Department for International Development, the end of the beet sugar quota could push 200,000 people in developing countries into poverty by 2020.

With the livelihoods of hundreds of thousands of farmers in developing countries at risk, the Fairtrade Foundation is now calling on the EU to support proposals to help Fairtrade producers increase their productivity, find new markets or diversify, and is urging shoppers to continue buying Fairtrade cane sugar, which is already seeing a decline in sales as a result of the EU reform and fall in global prices in the last three years.

On 25 February, the Foundation also launched an urgent fundraising appeal to help farmers in Malawi rebuild their communities where lives, homes and entire crops were lost as the result of devastating floods. Over 300,000 people are estimated to have been displaced, with over one million affected by the destruction of agriculture.

Against this background of serious economic challenge and natural disaster, the Fairtrade Foundation believes the new sourcing programmes can play a crucial role in boosting the volumes of commodities sold on Fairtrade terms and can also deliver greater benefits to farmers and workers, while embedding the values and principles of Fairtrade more deeply into supply chain strategies.

“We are currently running a campaign highlighting the changes in legislation that is pushing farmers into poverty,” says Cheryl McGechie . “We are also campaigning for the EU to look at transition arrangements to help them find different livelihoods in a trading environment which won’t damage them.

“Offering Fairtrade Sourcing Programs on sugar and cocoa as an ingredient rather than finished product will not prevent farmers from growing their sales. We are trying to support sugar farmers in any way we can to open up the market. It gives us an opportunity to talk about Fairtrade again and say ‘if you want a product which is everything it can possibly be, then look at brands like Divine’. We won’t move away from our commitment to those brands, but farmers need to be enabled and supported in new ways.”

The new sourcing policy is already winning wide support from Fairtrade farmers at the sharp end of these challenges.

Fortin Bley, a cocoa farmer from Cote d’Ivoire and president of the Fairtrade Africa Cocoa Network, says: “This is the breakthrough we have been looking for. The farmers I represent in Africa have been looking to sell more cocoa as Fairtrade for a long time. We have great expectations that the Fairtrade Sourcing Programs will increase our sales, offering better living conditions for the members of our co-operative.”

Jamaican sugar cane farmer, Alexia Ludford-Bell, agrees. “Fairtrade goes beyond extra payments; it’s about creating new opportunities,” she says. “The farmers benefit, kids benefit, everyone benefits. It’s a partnership that I hope we can keep for ever.”

Alexia Ludford, sugar cane farmer and Fairtrade project manager
Alexia Ludford-Bell, sugar cane farmer and Fairtrade project manager

“Sugar is the backbone of our economy and the source of our income,” adds Paulette Richards, a sugar cane farmer and secretary of the Trelawney & St James Cane Growers Association in Jamaica. “If we hadn’t the sugar industry […] children would not be able to go to school effectively, shops would close, bakeries would close, it would affect every individual.”

Brad Hill, Fairtrade strategy manager for Co-operative Food, said the new FSP initiative is a positive step which will tap vital new sources of income for Fairtrade farmers and producers. But he also stressed the importance of traditional 100% Fairtrade goods as a benchmark.

“All of the Co-operative’s own-label chocolate bars are made from 100% Fairtrade cocoa, which can be traced back to the individual producer,” he says. “Our commitment goes beyond Fairtrade and is vital to the projects we support. The new Fairtrade Sourcing Programs and partnerships open up opportunities for more Fairtrade cocoa farmers.

“However, it is important to recognise the added value of the pioneer brands that go well beyond the minimum requirements of Fairtrade.”

Manufacturers like Divine accept the changes may be necessary but say they will continue to champion 100% Fairtrade products as the ideal benchmark for manufacturers.

A spokesperson said: “In 2017 the European Union cap will be removed from the quota on sugar.  That means that it will be more difficult for least developed countries to sell sugar to Europe as the sugar price will probably come down to a level that doesn’t make them competitive.

“Sugar farmers in Europe receive subsidies like all other farmers in Europe and some of the less efficient sugar producing countries are currently lobbying for an additional subsidies.

“Divine produces some of the Co-operative Food’s Truly Irresistible range of chocolate and we use Fairtrade sugar from Kasinthula farmer’s co-operative (Kasinthula Cane Growers Association) in Malawi.

“The Cocoa Sourcing Program will enable chocolate companies to use Fairtrade certified cocoa without having to commit on the other ingredients like sugar. At present all current Fairtrade chocolate licensees in the UK continue to commit to sourcing all the ingredients that can be Fairtrade, and that is certainly Divine’s position.”

In this article

Join the Conversation