Organic chocolate-Candela Peru

Fair Trade is fighting poverty

If we are to end poverty, the Fair Trade movement is rolling up its sleeve in three ways. Here’s how:

  1. Taking Fair Trade beyond the farm-gate

Millions of farmers who grow our food are hungry and exploited. Despite a multitude of initiatives and certifications, partnerships and back-slapping, by-and-large, global commodity markets work to keep farmers poor.  

We combat this by creating a new breed of businesses. Fair Trade dive into the heart of businesses models trading and processing, manufacturing and marketing. Across the supply chain, we can build, foster and promote businesses that exist to benefit farmers. Sounds like a fantasy? It’s not, and it is already happening.

Let’s take chocolate. One question the Fair Trade movement is asking itself is how it can take over the chocolate supply chain. We found that an increasing amount of Fair Trade Enterprises are already doing this.

Take Maquita for instance, a farmer-owned business operating several social enterprises in Ecuador. Maquita isn’t content to merely supply global markets with cocoa. It is processing it and manufacturing its own chocolate, capturing more of the value, and channelling this to support its farmers and community. In Peru, Candela is doing the same. And so is Pacari in Ecuador and Zotter in Austria. They’ve gone bean-to-bar and are making it work. Trade Aid in New Zealand has also now built its own chocolate factory and is already seeing sales growth. The idea is working.

These are all WFTO members, and as such are social enterprises who fully practice Fair Trade. Fair Trade enterprises are required to reinvest the majority of their profits into their social impact, although 90% of them reinvest all their profits. When such Fair Trade Enterprises build brands and move up the chocolate supply chain, they channel the value they capture to benefit producers and communities. In Lima, our movement began plotting a future where such enterprises become the norm.

  1. Intensifying the climate fight

The climate crisis has always been a part of the struggle of Fair Trade, but it was time to elevate efforts. As recognised last month by WFTO members across the world: ‘the climate crisis will result in famines, migrations and wars’ and ‘negate or overwhelm’ the efforts of Fair Trade. This is why the environmental principle of Fair Trade will now be renamed: ‘Climate Crisis and Protecting our Planet’ and its criteria will be tightened. In particular, reducing CO2 emission, promoting sustainable production and eliminating waste and plastics will become a more central part of Fair Trade.

Fair Trade is a producer-led initiative, and no one knows the dangers of the climate crisis better than the farmers, workers and artisans in communities already feeling the impacts. These voices are now galvanised to challenge the Fair Trade movement to go further in the fight to save our planet.

  1. Fair Trade goes circular

The circular economy is all the rage in Fair Trade. In Bangladesh, Fair Trade Enterprises are reusing waste of the fast fashion factories to create bags and home décor. In India and Sri Lanka, they are working with waste-picker groups to recycle plastic to make new bags, sunglasses, belt-buckles and bottles (including through a partnership with WFTO Associate, Body Shop). Others across South Asia are turning discarded saris into new fashion items. While in Tanzania, Fair Trade Enterprises are cleaning up the beaches of Zanzibar to create furnishings and accessories, and helping refugees turn food sacks into baskets.

For years, these social enterprises did upcycling and recycling to simply clean up their neighbourhoods. They wanted clean streets and beaches so the children of artisans and workers could play. What’s exciting is that something that comes naturally to enterprises embedded in their communities - upcycling and recycling - is becoming a hit with consumers. There’s now also a market-pull.

The Fair Trade movement is working hard to spread these ideas, scale-up efforts and accelerate innovations. Fashion is where the most potential was found, but eco-friendly packaging for all products is growing across Fair Trade. The enterprises with on-trend product designs and savvy marketing are seeing growth in circular product lines. Meanwhile many others are investing to embrace these ideas. Going circular will fight poverty, spread opportunity and protect our planet. The movement is poised to go circular.

A new future can be glimpsed where Fair Trade proposes a new model of business, where people and planet are the priority, and profits are used to transform the lives. This is happening in garments to chocolate, quinoa to jewellery. Fair Trade is becoming a vision of a new economy, populated by mission-led enterprises. Our ambition has gone up a notch.

This article has been adapted from the original published in Ethical Corporation magazine on 9 October 2019 also authored by Erinch Sahan.