Chocolate Report PDF - Fair Trade Barrie

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The Fairtrade experience
PHOTOGRAPHY: Brian Moody
Fairtrade is a practical way of helping
growers establish themselves in the
world supply chain. It is not charity,
but a sensible commercial practice
that emphasises human values.
Fairtrade guarantees a better deal
for growers in developing countries.
These people have often found that
because of their remoteness or size of
operation they are unable to obtain a
fair price for their products. They have
been marginalised by international
trading and have often been vulnerable
to unscrupulous middlemen.
The Fairtrade Foundation awards an
independent consumer guarantee -
the FAIRTRADE Mark - to individual
products which meet Fairtrade criteria
regarding terms of trade and conditions
of production. Fairtrade helps
disadvantaged growers work together
in community enterprises, by offering
a guaranteed better price - one that
covers the cost of production and a
basic living wage.
Furthermore, it ensures that money
paid for the products goes direct to
the producers’ organisations. Fairtrade
buyers often provide pre-payment so
that producers can avoid getting into
insupportable debt, as well as offering
a guaranteed minimum price, which is
above the market norm and at least
covers the cost of production and a
basic standard of living.
Importantly, Fairtrade pays an additional
‘social premium’, under which some
of the price paid is reinvested in the
business or spent on social development
programmes, such as education and
health. The producers themselves
decide democratically how to invest this
extra income, making co-operation,
participation and joint responsibility of
key importance.
Fairtrade has the potential to make a
significant difference to the economic
welfare of a community. In the case of
cocoa, for example, prices have followed
a boom and bust cycle over the past
30 years, with peak prices in the late
1970s and a slump in the early 1990s.
A brief recovery in 1997-98 was followed
by a steep decline in which prices fell
to a 27-year low of $714 per tonne in
November 2000. Prices in 2000 averaged
$887 per tonne, barely half of the
average figure during the past 30 years.
Although prices on the current market
are unusually high, in reality the ordinary
small-scale grower may never receive the
true value of his cocoa, as the benefit
of raw material price increases may go
to commodity traders and middlemen.
And, as one farmer puts it, prices
could “drop down to hell again at any
moment”. It is this uncertainty and
instability that is problematic for the
ordinary grower.
The minimum Fairtrade price for cocoa
is $1600 per tonne, plus the social
premium of $150 per tonne to be used
for democratically-agreed business or
social development programmes. If the
world market price rises to $1600 per
tonne or more, then the Fairtrade
price is the world market price, plus
the $150 premium.
The Co-op is based on values of selfhelp,
self-responsibility, democracy,
equality, equity and solidarity. One of
our principles is co-operation between
co-operatives, so it is natural that we
should support Fairtrade, as many of
these disadvantaged groups are small
producer co-operatives.
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