FAIR TRADE

1
FAIR TRADE
What is fair trade and how does it effect small
scale farmers Sunday, December 21, 2008
2
Outline

• Coffee Facts
• Coffee in Canada
• What is Fair Trade?
• Supply Chain Comparison
• Where does coffee money go?
• Coffee Price History
• Conditions of certification
• How does Fair Trade Certification Work?
• Effects of Fair Trade
• For the farmer
• For the consumer
• Case Study

3
Coffee Facts

• 2nd most traded commodity in the world
• Top 10 coffee producing countries
• Brazil (31)
• Vietnam (15)
• Colombia (11)
• Indonesia (5)
• Ethiopia (5)
• 6-10. India, Peru,
• Mexico, Guatemala,
• Honduras (17 total)
• 2 Types
• High Quality Mountain grown Arabica
• Lower Quality Robusta beans

Source International Coffee Organization, 2007
4
Coffee in Canada

• 81 of Canadians drink coffee occasionally
• We consume on average 2.6 cups per day. Canadians
  consume 31 billion cups of coffee a year on
  average
• 18 of total beverage consumption
• Consumer Awareness
• 51 organic
• 38 Fair Trade

5
What is Fair Trade?

• It is a certification that guarantees certain
  production and trade conditions
• Fair Trade products sold in Canada (Coffee,
  Cocoa, Tea, Banana, Cut Flowers, Cotton, Shea
  Butter, Sugar)
• Fair trade is a trading partnership, based on
  dialogue, transparency and respect, that seeks
  greater equity in international trade (Fair
  Trade Labeling Organization, 2008)

6
Conventional Trade Supply Chain and the Fair
Trade Approach
Conventional Trade
Fair Trade Approach

• Multi Level supply chain
• Coffee changes hands many times

• Reduced involvement of middlemen
• More money for Farmers

7
Where does the Coffee Go?
Conventional Coffee
Fair Trade Coffee
Source http//www.cbc.ca/consumers/market/files/f
ood/coffee/whogets.html
EWB Fair Trade Coffee Workshop
8
Coffee Price History

Source International Coffee Organization
9
Conditions for Fair Trade Certification

• Farmers create democratic cooperatives,
• Standards for hired labours
• No forced or child labour
• Must adhere to health and safety standards
• Implement programs to improve environmental
  sustainability

10
Certification Process
Producers
Importers
Licensees (Processors)
Retailers
Consumers
FLO International
TransFair Canada

EWB Fair Trade Coffee Workshop
11
Effects on the Grower and Community

• Farmers become empowered because of the
  democratic cooperative
• Ensure price covers cost of production and cost
  of living
• Social premiums towards community development
• Access to credit (up to 60 of purchase price)
• Long term commitment from buyer
• Environmental protection because of sustainable
  farming methods that are mandated
• Education and capital to help diversify crops to
  reduce dependence on coffee only

12
Effects on the Buyer

• Feel like part of a larger movement
• Make a connection to farmers
• Drinking higher quality coffee
• Help lift farmers in developing countries out of
  poverty

EWB Fair Trade Coffee Workshop
13

Case Study

• ACOC, Colombia
• (Asocacion de Caficultores Organicos de Colombia)
• Co-op Established 1992
• Year Certified 1994
• Case Study and pictures courtesy of
• www.transfairusa.org

EWB Fair Trade Coffee Workshop
14
Case Study

• ACOC Community Improvements
• Education
• 5 university technical scholarships / year
• Provides primary and secondary school supplies
• Productive Investment
• Purchased new processing equipment

EWB Fair Trade Coffee Workshop
15
Case Study

• ACOC Community Improvements
• Environment
• Pest control and fertilization education
• Assisting the transition to organic production
• Health
• Economic support for emergency medical care,
  housing improvements and disaster relief

EWB Fair Trade Coffee Workshop
16
What can you?
17
Where can I get Fair Trade Products?

• Got to http//www.playyourpart.ca for an
  interactive map of locations in the Ottawa Area.
• Bread and Sons
• Bridgehead
• 10,000 Villages
• Francescos Coffee
• Green Door Restaurant
• Human Beans Coffee Company
• ..etc.

18
Thank you!

• For more information
• Check out websites of
• www.playyourpart.ca
• www.ewb.ca
• Transfair Canada
• Oxfam International

19
Fair Trades approach

• Reduce involvement of middlemen
• Encourage farmers to work with community
  cooperatives
• Certify products comes from certified producer
  organization

20
Living on 2 per day
21
To make it fair
22
Fair Trade is a movement

• By creating an international system of doing
  business based on dialogue, transparency and
  respect
• Contributes to sustainable development by
  offering better trading conditions for producers
  and workers in developing countries

23
Major issues from conventional trade

• Low, fluctuating world market price
• Unfair international trade rules
• Lack of access to markets, credit and technology
• Bad work conditions for farmers, laborers
• Environmental health impacts of monocultures
  and pesticides use

24
Major issues from conventional trade

• Low, fluctuating world market price
• Unfair international trade rules
• Lack of access to markets, credit and technology
• Bad work conditions for farmers, laborers
• Environmental health impacts of monocultures
  and pesticides use

25
Fair Trade makes trade fair by

• Ensuring the products certified are
• Direct Trade
• Fair Price
• Access to credit
• Long term commitment
• Local Community Development
• Environmental protection