Fairtrade America Study Reveals Benefits, Challenges For Farmers 


Washington — Fairtrade America has released the results of The Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development study, decade-long research that found farmers who are part of Fairtrade certified Producer Organizations experience better economic resilience, social wellbeing, environmental sustainability and governance of their cooperatives than farmers not in Fairtrade certified organizations, particularly in times of global crisis. 

The survey was implemented by Mainlevel Consulting and reveals that Fairtrade Standards, Fairtrade pricing and producer support programs positively impact certified farmers and their communities. While the findings outline encouraging evidence of Fairtrade’s benefits, the study also presents the reality that farmers’ gains have been undercut in recent years due to the challenges of COVID-19, climate change and increasing costs of production.

“In times of crisis, it becomes evident that Fairtrade enhances farmers’ economic resilience and supports them in continuing their profession,” says Tatjana Mauthofer, researcher at Mainlevel Consulting and co-author of the study.

During the study, researchers evaluated specific producer organizations three times from 2012-2022, gaining valuable insights into the changing conditions and perspectives of Fairtrade farmers over time. The study specifically examines four areas of sustainability, including economic resilience, social wellbeing, good governance of farmer cooperatives and environmental integrity. The Fairtrade farmer cooperatives included in the research — a cocoa cooperative from Ghana, a coffee cooperative and three banana cooperatives from Peru — were analyzed alongside non-Fairtrade organizations of similar size and location to isolate the effects of Fairtrade partnership from other external factors.

The study also shows that Fairtrade’s foundation price mechanisms represent a safety net for farmers, their cooperatives and eventually their communities. Additionally, the research points to improvements in farming households’ financial situations, such as increased earnings, ability to withstand periods of financial instability and boosted savings.

In addition to the economic benefits of Fairtrade, the report shows that Fairtrade cooperatives enjoy stronger governance, with greater transparency and democratic decision-making. The researchers also note that good governance makes sustainability truly possible, as cooperatives make and carry out decisions in environmental, social and economic spheres. 

Fairtrade farmers also registered a higher uptick in benefits across social wellbeing indicators, including gender equality and workplace safety and health, when compared with their non-Fairtrade counterparts. Fairtrade cocoa farmers reported that women in their cooperative showed more confidence in speaking up and voicing their thoughts. Similar advantages were noted on health-related issues. Additionally, the more well-established banana cooperatives used their Fairtrade Premium funds to provide health services and training, including on COVID-19 safety measures.

At the same time, researchers identified three significant challenges that risk undermining the gains Fairtrade farmers have achieved, including climate change, COVID-19 and increasingly low prices. 

The report outlines actions to ensure sustainable livelihoods for farmers and a continued supply of goods for years to come. Specifically, the report calls for supply chain stakeholders to pay prices to farmers that support a living income; fund climate change adaptation measures; finance and support farmers in diversifying their incomes and modernizing and improving farm management; and measure and mitigate the disproportionate effect of COVID-19 on women and vulnerable populations. 

“We believe that everyone deserves a decent standard of living. It’s only fair to pay a price that covers basic needs and supports an existence worthy of human dignity,” shares Peg Willingham, executive director of Fairtrade America. “This report is critical in helping Fairtrade certified farmers, brand partners and retailers understand the positive impact the Fairtrade system has and the real difference it makes in farmers’ lives. At the same time, it provides us with a call-to-action and urges companies and governments alike to drastically expand the commitments they are making or we will see farmers continue to slide backwards and potentially abandon farming altogether.”

Fairtrade America encourages actors along the supply chain to take three key steps to create a fair and sustainable future:

Pay a fair price. Due to the realities of the global food market, cocoa farmers in West Africa work an entire day for 78 cents to $1, which is below the international poverty line. Fairtrade’s living income work contributed to Cote d’Ivoire and Ghana setting a Living Income Differential of $400 USD/tonne (as of October 2020) on top of the Fair Market Price and Fairtrade Premium, which increased in 2019. Cocoa farmers express that this price increase is not enough to stay ahead of the increased costs and challenges from COVID-19.

Support adaptive measures to combat climate change. The report reiterates that climate change is causing an increase in plant diseases and pests, as well as extreme weather events that destroy crops. These challenges, compounded by already low incomes and rising debts from COVID-19, mean farming communities are often unable to adapt to the widespread effects of a changing climate, let alone invest in clean energy and low-carbon farming methods.

Fairtrade has created programs like the Climate Academy, which brings coffee farmers together to share skills and experiences that help prepare them for future climate-related challenges, and has also implemented campaigns to draw consumer, government and corporate awareness of the environmental needs farmers face. 

Measure and mitigate the impacts of COVID-19. As a result of COVID-19, sales have decreased for some producers, and costs have increased for things like fertilizer and transport. Programs like Fairtrade’s Producer Relief and Resilience Fund, and the temporary allowance for certified Producer Organizations to use their Fairtrade Premium more flexibly, have aided farmers in navigating this crisis. However, market instability, lower sales, rising production costs and scarce and more expensive labor, have all negatively affected farmer’s livelihoods. Additionally, the global pandemic increased the risk to farmers’ own health and led to increasing and unexpected expenditures for health and hygiene measures. 

As the pandemic continues, all participants in the global supply chain must continue to consider the health, safety and sustainable livelihoods of farmers. 

“While it’s encouraging that this study emphasizes how Fairtrade supports farmers and Producer Organizations in weathering these financial challenges, it warns that progress toward reducing poverty — as well as the goal of achieving living incomes — will be stalled, if not reversed, if farmers are not paid more,” Willingham adds.