The impact of Fair Trade on agriculture

We live in an increasingly globalised market where we consume preventive products from all over the world. Despite the progress made by the free market, we can sometimes find agricultural models that violate social and environmental rights and turn into monopolies that do little to favour small producers. To fight inequality and ensure the development of sustainable agricultural activities, there are tools such as Fair Trade. In today’s article we tell you about the impact of Fair Trade on agriculture.

What is Fair Trade?

Fair Trade is a international movement which works to make world trade more efficient and economically, socially, humanely and environmentally sustainable. In this way, a business model has been developed that seeks to improve market access and trading conditions for small-scale producers and plantation workers. In other words, it is a solidarity-based trade system that aims at the development of peoples and the fight against poverty.

In order to fight for this model, the World Fair Trade Organization (WFTO), an international umbrella organisation of nearly 400 Fair Trade organisations in 76 countries that is responsible for ensure and establish the criteria for Fair Trade, ensuring that its members are organisations that promote business models that put people and planet first.

The systemWFTO is theunique international verification model which, through independent audits, verifies that its members are companies that fully practice the 10 Fairtrade principles in their business and supply chains.

These are 10 principles of Fair Trade:

  1. Gender equality, freedom of association and non-discrimination.
  2. Good working conditions.
  3. Capacity building.
  4. Promotion of fair trade.
  5. Respect for the environment.
  6. Better opportunities for disadvantaged producers.
  7. Transparency and sustainability.
  8. Fair trade practices.
  9. Fair payment.
  10. No to child labour and forced labour.

Who is part of Fairtrade?

Within the Fairtrade production chain, different groups of people associated with the agribusiness production chain are involved:

  • Producers.
  • Marketing organisations.
  • Importing organisations.
  • Fair Trade Shops.
  • Networks and organisations. Some of the most important ones are the World Association of Fair Trade Organisations (WFTO) or the European Free Trade Association (EFTA). In Spain we have the Coordinadora Estatal de Comercio Justo.
  • Companies participating in this movement. Organic product shops, bulk product shops, supermarkets, herbalist shops, etc…
  • Certifiers. These are companies that ensure that Fairtrade products are produced according to the best practice model and also that these products meet all quality and safety standards.

Benefits of Fair Trade for agribusinesses

  • It has a positive impact on producers’ incomes, welfare and resilience.

Studies show that activities undertaken to maintain fair trade, such as improved trading conditions and increased food security, have a positive effect on farmers’ incomes and contribute to their overall well-being.

  • It promotes decent work and contributes to giving workers a “voice and dignity”.

In companies working to implement fair trade, workers benefit from better physical spaces, paid overtime, adequate breaks, and health and safety protections.

  • It supports the development of strong and democratic producer organisations.

In order to build stronger trade relations, it is essential that farmers have a voice as members of their cooperatives. Fair Trade promotes better management, better systems and better financial capacity for producers.

  • Increasing environmentally friendly farming practices.

Many Fairtrade producers are also certified organic and use environmentally friendly farming practices.

  • Development of a positive impact on consumer awareness and commitment to fair and sustainable trade, including confidence and purchase intention.

Over the last few years, sales and consumption of Fairtrade products have increased globally. In 2020, Spain reached 136 million (4% more than in 2019).

It is clear that society, consumers and business are looking for trade that enhances social, economic and environmental development. Many major companies and brands have already started to incorporate the Fair Trade certification in their products (Azucarera, Ben & Jerry’s, Nespresso, Carrefour…) in order to fight to eradicate child exploitation, act against climate change, defend workers’ rights and promote gender equality.

By using sustainable packaging, the image of a responsible company is projected, which creates an attraction for many consumers and increases the added value of the product/service. In our International Master in Agribusiness Management we have a module focused on the sustainability of the sector and the challenges and solutions that agribusinesses have to face. Find out more now!

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