Myth Busters: Fairtrade Products

By Katerina Pickup

Welcome to our new Myth Busters blog series! There are often misconceptions around sustainability issues and I find it eye-opening to keep learning new facts which help me understand our environment and what we can do to live in a more sustainable way.

The Fairtrade Festival is coming to an end today and I have been reading a lot about Fairtrade products. I wanted to share a few facts that you might find interesting! Enjoy the read and please leave a comment. I’d love to hear about what your experience or opinion on using Fairtrade products is!

Myth 1: Only a small fraction of the price you pay for a Fairtrade product goes back to the farmer

This myth comes from the assumption that Fairtrade traders are paid a percentage of the price that a consumer pays for their Fairtrade product. However, this is not correct. The retail price of a Fairtrade product is set by the shop owner and is not related to how much goes to the farmer.

The way Fairtrade works is that the company trader who makes the product for the the supply chain receives the Fairtrade price which is a set price called Fairtrade Minimum Price. This is to ensure that traders will receive the same amount every time and are protected from fluctuations in the market. That way they are able to plan better and cover their costs even if the market price of their commodity falls. And that’s a fair arrangement, don’t you think?

Myth 2: Fairtrade products are more expensive

This is perhaps the biggest myth of all when it comes to Fairtrade. Consumers often assume that businesses respecting human rights, local sustainability and fair terms of trade for farmers and workers in the developing world, will end up offering more expensive products. This is not always the case.

To explain, let’s start from the basics. The price of a product is normally made up of several parts. If you look at a bag of coffee, for example. Assuming that you bought your (not Fairtrade) coffee for £3, how much do you think ends up in the coffee producers’ pocket? Around 20p. So where does the remaining £2.80 go? It’s the production company, the retailer, several intermediaries in the supply chain and also the transport company that gets the product to the retailer.

The difference is that Fairtade organisations work directly with producers, cutting out intermediaries. This means that Fairtrade products can be competitively priced. And the trader is always guaranteed the Minimum Price.

Myth 3: Fairtrade results in poorer quality products for the consumer

Fairtrade products are often hand-made and not mass-produced like high street goods. This is why some people make an assumption that Fairtrade product quality can fluctuate.

In reality, Fairtrade organisations continuously work to improve quality and consistency. Through direct and long-term relationships, producers and Fairtrade organisations communicate market demand and monitor quality. Fair traders’ products have received accolades for their quality over the years including awards at the international Cup of Excellence and Roaster of the Year competitions, SustainAbility in Design, the New York Home Textile Show, and other venues.

Myth 4: Fairtrade agreements lock farmers into a fixed price

Let’s go back to the Fairtrade Minimum Price which is where this myth often originates. The Fairtrade Minimum Price is a safety net or a floor price, not a fixed price that a farmer will receive for their product. It’s carefully calculated to cover the costs of production and only comes into play in a worst case scenario. It is a price the farmer is guaranteed to receive.

If the market price of their product is above the Minimum Price, then the buyer must pay the higher price. The farmer may also negotiate higher prices at any time on the basis of quality and other factors.

Any amount the farmer receives above the Minimum Price is known as the Frairtrade premium. This extra money can be spent on improving training, improving farming techniques and building schools and medical clinics to support the local community. Fairtrade doesn’t dictate what it’s spent on but the Premium spend is audited in the interests of transparency.

Myth 5. Fairtrade means coffee and chocolate

Coffee was indeed the first agricultural product to be certified Fairtrade in 1988. However, Fairtrade has gone a long way in recent years to certify new product categories. These include bananas, cocoa, coffee, dried fruit, fresh fruit and fresh vegetables, honey, juices, nuts/oil seeds/oil, quinoa, rice, spices, sugar, tea, wine and non-food products such as clothing, beauty products, cotton, cut flowers, ornamental plants, sport balls, gold, platinum and silver!

Fairtrade in the UK:

The Fairtrade Foundation is a charity based in the United Kingdom that works to empower disadvantaged producers in developing countries by tackling injustice in conventional trade. The Foundation promotes and licenses the Fairtrade Mark, a guarantee that Fairtrade products retailed in the United Kingdom have been produced in accordance with internationally agreed Fairtrade standards.

The Foundation is the British member of FLO International which unites 25 national Fairtrade organisations (FLO-CERT) and three producer networks in Europe, Asia, North, Central and South America, and Australia.

Find out more at https://www.fairtrade.org.uk/.

Thank you for staying with me all the way here! I hope you have enjoyed the read and have learnt one or two interesting things about Fairtrade and how it fits in with sustainable living.

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