The Last Ten Years: A Comprehensive Review of the Literature on the Impact of Fairtrade
Valerie Nelson and Barry Pound (2009)
Natural Resources Institute, University of Greenwich
With €2.9 billion euro p.a. spent on Fairtrade products in 2008, socially aware consumers and organisations are big business. Fairtrade seeks to eliminate exploitation from the supply chain and generate lasting benefits in the producer communities. Most of the understanding of the impact of Fairtrade comes through stories and output measures such as the number of famers and communities participating. This research, commissioned by Fairtrade Foundation and carried out by Greenwich University, seeks to understand the economic and social impact of Fairtrade on producers, using academic and development agency reports.
The economic benefits of Fairtrade
The research recognises how difficult it is to generalise about Fairtrade, due to different products, local conditions and supply chain experiences. This extensive review of the literature finds strong evidence that Fairtrade provides a favourable economic opportunity for smallholder farming families that are able to join farmer organisations and can provide products to market specification. This translated to higher returns and stable incomes and in some cases dramatic improvements in livelihoods. However, there are several studies where producer families are still only surviving and covering basic needs.
The social and empowerment impacts of Fairtrade
There was overwhelming evidence of improved self-esteem, confidence and market knowledge resulting in increased buying power amongst supplier groups. Many Fairtrade co-operatives are becoming stronger, often showing greater ability to survive in difficult times and becoming more able to provide important services to their members.
There is no attempt in the research to generalise or quantify because the experience is so variable. This research challenge isn’t unique to Fairtrade but it does make it difficult to communicate to institutional buyers the value created by the Fairtrade premium.
The more common reporting from corporate buyers identifies the number of farmers benefitting, the increased price and some of the programs now available in those communities ie: schools. The strength of the Fairtrade brand seems to contribute significantly to the credibility of this form of social procurement as it provides an accreditation standard which removes exploitation from the production process, a fact which is perhaps more important to buyers than the undoubted (as evidenced by this report) impact that their spending is having.