What are the effects of Fairtrade on rural development in the producing countries of the South? Which are the decisive factors for an ideal influence? On the occasion of its 20th anniversary, TransFair e.V. Germany and Max Havelaar Switzerland commissioned a study that assesses the effects of Fairtrade in several product ranges on three continents. “The latest results show that Fairtrade creates an improved income and contributes to poverty reduction in rural areas,” said Dieter Overath, General Manager of TransFair. “In regions with strong Fairtrade representation, such as banana farming in Peru or rose cultivation in Kenya, conventional farmers have even started copying Fairtrade standards, for example when it comes to paying a premium or improving their working conditions.” The study was co-financed by the Swiss State Secretariat for Economic Affairs (SECO), the German development co-operation organisations Misereor and Brot für die Welt/EED and was developed by research institute CEval of Saarbrücken, Germany.
Surveys Across Six Product Ranges in Africa, Latin America and Asia
A range of qualitative and quantitative data was gathered for this study. Farmers and dependent workers of four countries were interviewed in 32 group discussions and 128 individual interviews. 3750 survey forms as well as primary and secondary literature were evaluated. The methodically ambitious implementation of this study allows making clear statements on the effects of Fairtrade on rural development. Case studies from the coffee, banana, tea, cotton, cocoa and flower product ranges were evaluated. The team at CEval compared the development of Fairtrade-certified small farmer co-operatives, plantations and contract production with that of conventional organisations. Comparative parameters included education, health care and gender.
Improved Socio-Economic Situation
The study proves that small farmers and workers on Fairtrade-certified co-operatives and plantations have a slightly higher and more stable income available. Approximately 64 per cent of the respondents reported being able to save some money, compared with 51 per cent of the comparison group. The productivity of the certified organisations was also increased in most cases. 85 per cent of all respondents in the cotton case study reported an improved access to credit. Almost 85 per cent of the workers at the investigated Fairtrade-certified flower plantations have a permanent contract of employment, as opposed to fewer than 20 per cent in the compared conventional plantations. The sometimes massive investments in the local infrastructure, such as road improvements, have a major impact on rural areas. A general improvement in the education and healthcare sectors is an indirect consequence of this.
The Population is Involved in Development Activities
CEval found out that money from Fairtrade Premiums was often invested in projects that benefitted the residents of a whole region. The fact that small farmers and workers can implement development projects independently means that these projects are accepted and supported by the general public. A more powerful organisation and positioning of small farmers in co-operatives have even led to the break-up of existing power constellations in some cases. In plantations, the independent administration of the Fairtrade Premium by a committee of elected worker and management representatives, the so-called Joint Body, has enabled workers to assume responsibility in decision-making processes – a unique situation.
Optimization of Effects through a Committed Management and Increased Access to Markets
The effect of Fairtrade on rural development largely depends on Fairtrade sales, on how well the producers and management are informed and organised and on how serious they are in their commitment to Fairtrade. CEval recommends that the functioning “best practice examples” should be used to increase the efficiency within the Fairtrade system.