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What's fair about fair trade? Insights from Senegal and India

Thoughts on fair trade following 4 years of field experience in Senegal and India.
by

Liz Cooper

on 1 February 2013

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Transcript of What's fair about fair trade? Insights from Senegal and India

Insights from
Senegal and India Liz Cooper
Fair Trade Coordinator
University of Edinburgh Aside Not an academic talk
Not a talk about me/career paths
Not claiming to be an expert on fair trade in general - just providing some insights gained from 4 years' working on fair trade in Senegal and India, and then briefly discussing what that means for UoE
Successes and challenges of fair trade = a complex topic, can't cover everything, happy to discuss more after Key Fair Trade systems Fairtrade International (FLO) - Fairtrade-Certified (certification of agricultural product, moving onto processing too) over 1.2 million farmers
World Fair Trade Organisation (WFTO) (certification of 'organisation'/company - handicrafts, clothing) Fairtrade standards Fair price (fixed by Fairtrade...)
Fairtrade Premium - for social, economic and environmental development
Pre-financing (when asked for)
Long-term trading partnerships and greater producer control over the trading process
Training opportunities
Non discriminatory employment practices
No child labour and no forced labour
Access to collective bargaining processes and freedom of association
Condition of employment exceeding legal minimum requirements WFTO standards Creating opportunities for economically disadvantaged producers
Transparency and accountability
Fair trading practices e.g. does not maximize profit at producers' expense
Interest free pre-payment of at least 50% is made if requested
Long-term relationships
Fair price mutually agreed by all through dialogue and participation (challenging...)
Commitment to non discrimination, gender equity and freedom of association
Capacity-building : management skills, production capabilities and access to markets

WFTO on child labour: "Any involvement of children in the production of Fair Trade products (including learning a traditional art or craft) is always disclosed and monitored and does not adversely affect the children's well-being, security, educational requirements and need for play". My perspectives before - Consumer, aware of principles of fair trade
- But, curious to discover whether Western marketing phenomenon or whether ‘producers’ genuinely on-board, same with organic certification Perspectives on returning to UK The tip of the iceberg What does this mean for UoE? We are a Fairtrade University, since 2004 (policy, procurement commitments, staff/student steering group, awareness-raising...)
We continue to support Fairtrade/fair trade products, as many advantages for workers' livelihoods over ‘conventional products’
But: broader approach to what being a Fairtrade/Fair Trade uni means, including other codes and standards (Worker Rights Consortium, textiles and forthcoming for electronics, Malawi rice, APUC code of conduct being developed, etc.)
Therefore, we need more academic research into impacts of these codes and standards, how they could work better, etc. and on wider FT issues.
Hence the launch of the Fair Trade Academic Network 2010-2011 in India worked for a small environmental NGO in Delhi with a fair trade tailoring project - making products out of waste
e.g. inner tubes, packaging, fabric offcuts discarded by larger factories
employed 12 tailors (former sweatshop workers) - better conditions
supported other livelihoods e.g. ragpickers (who collect reusable waste from streets/landfill), and a community who ran a waste cloth market from their 'slum'
Aldianawo (Pular word for a flower) as local fair trade initiative
60+ organisations from all levels of value chain/other stakeholders come together to define own understanding of fair trade, to fit 'Africa' context
tackling dependency on export by focusing on processing/whole value chains
developing own understandings of gender/child labour requirements
includes South-South fair trade - awareness among local consumers
Participatory Action Research, facilitated via NGO
2006 pilot project launched: 4 different value chains including cotton/textiles - research on how fair trade could work better for them
handicraft processing of cotton established. Industrial processing in Senegal failed - difficult to agree partnership with factory, more investment and infrastructure needed to revive industry
group developing values, commitments and criteria for Aldianawo fair trade 2007-2010 in Senegal fairness in trade Level playing field:
symmetry of information,
perfectly competitive
market? Do no harm? Fair if all parties consider it fair? Fair use of
resources? international
development economics politics business
studies law Neoliberal globalisation Fair trade
labelling:
voluntary
codes and standards
/ soft regulation: CSR
and
corporate
codes of
conduct Coops
and
social
enterprise Value chain development (VC4D) Cross-sector
partnerships:
business/UN,
business/NGO labour movements:
trade unions, labour
internationalism privatisation trade liberalisation deregulation corporate domination diminishing power
of states corporate lobbying
- business influences policy small local
businesses
can't compete lack of access to
global markets for
poor producers Trade policies:
IMF – structural adjustment,
free trade agreements
while subsidies in West, EPZs…
= not free trade, but gov'ts supporting
corporations WTO – Seattle 1999,
unrepresentative,
rulings not adhered to by US Banking crises
– trading risk,
lack of accountability
of big banks move your
bank account? exploitation of
workers, lack of
living wage Shareholder value
Outsourcing
fragmented manufacture
JIT, lean production Over-exploitation of natural resources:
extractive industries, whaling/hunting Lack of infrastructure,
capital and capacities
in developing countries:
market failure public goods privatised
e.g. water negative externalities:
environmental dumping etc. tax avoidance Food security,
food sovereignty
dependence on
global markets mercenaries, conflict
diamonds... deception of consumers:
poor quality/unhealthy goods,
misleading advertising loan sharks, payday loans,
pawn shops... illicit trade:
narcotics, humans, sex Pharmaceutical patents
denying medicine to poor;
drug trials on poor White collar crime,
insider trading counterfeit goods
e.g. medicines fair trade labelled
products are
only the tip
of the iceberg... academic perspectives: What does fair mean? Fairtrade Foundation
World Fair Trade Org.
Ethical Trading Initiative
Worker Rights Consortium
UN Global Compact... land grabbing marketisation alternative trade - faith groups,
becoming fair trade movement fair trade as offering market access track and trace What's fair about
fair trade? Links http://www.sps.ed.ac.uk/jwi/ftan
http://www.ed.ac.uk/about/sustainability/fairtrade
https://www.facebook.com/UniversityOfEdinburghFairTrade
https://twitter.com/UoEFairTrade 2007: WFTO certified handicrafts
2008-10: Fair trade/organic cotton value chain (processing) project Many challenges, contradictions and dilemmas: Many dedicated researchers/practitioners working in sector, striving to find ways to improve FT
Clearly life changing for many to having stable, higher prices for goods, and opportunities to learn
Fair trade movement has been important for awareness-raising in West is fair trade maintaining developing country workers as producers (lowest incomes in value chains, cash crops), and Westerners as wealthy intermediaries and consumers? c.f. importance of local processing
should fair trade be a grassroots social movement, offering an alternative to corporate domination of economies, or work through corporations to achieve greater impact through scale?
producers may be more aware of their position in global trade, but do they really gain more bargaining power through fair trade? (c.f. continual reliance on NGOs)
is fair trade based on Western ideologies/ideas on how labour, markets and trade should be? do many fair trade producers really understand the concept?
are competing regional/sector-specific fair trade systems healthy for developing the movement, or just confusing for consumers? Nevertheless... Where I worked Yakaar Niani Wulli farmer cooperative, Koussanar nearly 2000 farmers, 80+ villages
1997 gained organic certification for cotton: grow fonio, sesame and bissap in rotation
2006 gained Fairtrade certification for cotton
supported by local NGO Enda Pronat able to tap into more lucrative markets: higher price paid (between 22% and 40% higher for Fairtrade cotton and up to 70% higher for organic cotton), plus development premium
democratic organisation encouraged: decided to use development premium to build HQ in village, and to build cereal bank to cover dry season when food is lacking
capacity-building, sessions on marketing and finding buyers, understanding role in value chain, liaising with buyers... Benefits of Fairtrade certification for YNW farmers: Challenges linked to Fairtrade system (identified collectively) certification costs high (FLO even once suggested YNW used the development premium to pay for certification?!): certification can be paid for by profits from harvest, but depends on finding buyer
finding fair trade buyer each year is a challenge - stressful, uncertainty, long-term contracts not yet established (HENCE IMPORTANCE OF CONSUMER SUPPORT FOR FAIR TRADE)
bureaucracy - time-consuming, and many producers cannot read/write/speak French
=barriers to entry, NGO support needed
sometimes payments to coop delayed, pre-financing not respected
lack of producer participation in fixing Fairtrade prices (but there is some...)
Expecting equality between men and women seen as too big a step to achieve quickly - women given roles in coop governance but don't yet have skills required
Ban on child labour contested Solution = Aldianawo - "Senegalese fair trade" Less complex, so will keep it simpler...
not certified - working towards WFTO certification
varying degrees of understanding of fair trade among employees
needed to work on increasing participation of tailors/craftspeople - being able to voice concerns/opinions
worked on formalising employment policies: clarifying leave, holiday pay, overtime...translating documents into Hindi, holding regular meetings
created links with Fair Trade Forum India - collaborative learning and sales
WFTO approach less top-down, less formal - depends on commitment of organisation to values Relationship with fair trade systems Making markets
work for the poor
(MMW4P) Micro-finance Look out for Fairtrade Fortnight (25th February to 10th March 2013) at UoE
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