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.
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