Blog It Café

MONDAY, JULY 04, 2016

Fairtrade Organization

I already wrote another article about Fairtrade to better explain how it works, since I believe it is the most well known certification among consumers, but today I will post my interview with Anna Kiemen, she is the Supply Chain Manager of Fairtrade, based in Germany, and she is also responsible for connecting cooperative managers with possible buyers. I actually had the chance to have lunch with her and a few Brazilian producers, which was very nice to understand their point of view in a few sustainability issues. 


Anna Kiemen (on the right) with Brazilian producers ©Transfair e.V. / Anna Kiemen


A fact I think is quite important to have in mind is that Fairtrade International and Fairtrade USA are two different organizations nowadays and the former one does not certify big estates (farms), only cooperatives of small and medium producers.


Anyway, here are some facts about the organization and her answers to my questions (below):


Who initiated: Max Havelaar, under the initiative of the Dutch development agency Solidaridad, in 1988. 


How is it financed? Basically, National Fairtrade Organizations, such as Fairtrade Germany, are mainly financed through license fee income (a fee paid by the Fairtrade licensee for each unit of Fairtrade labelled product sold), which is transferred to about 25-30% by all markets to Fairtrade International (as membership contribution). Fairtrade International is then forwarding part of it to the producer networks for their support activities on the ground (in country of origin). The producer networks also receive a membership fee in addition from their members (the Fairtrade producer organizations). Fairtrade Internaitonal receives additional funds from donors and some of this money is linked to particular projects, or standards they are interested in.

Flocert, the certification body, is financially independent, financed through the certification fee that each certified company and producer organizsation is paying directly to Flocert.  


Mission: to connect disadvantaged producers and consumers, promote fairer trading conditions and empower producers to combat poverty, strengthen their position and take more control over their lives. 


Number of participants/hectares covered: Fairtrade currently works with more than 812,500 farmers globally through 445 Fairtrade certified coffee producer organizations. Fairtrade coffee farmers cultivate coffee on more than 1,1 million hectares worldwide producing an estimated 549,000 tons of coffee of which 34% is also certified organic. 


Different requirements for different market players: Traders have different audit system. Also there are different standards for small producers, hired labor, traders and a climate standard (The Fairtrade Climate Standard is an add-on standard to Gold Standard certification of carbon emissions reductions and sustainable development benefits). 


Volume of Coffee produced as Fairtrade in 2014: 549,000 metric tons 


Sold as Fairtrade in 2014: 150,800 metric tons (28%)


Main Producer Countries in 2014: Colombia (30%), Brazil (16%) and Peru (16%) 


Countries with local Operations: The producer networks have their headquarters in the following countries: Fairtrade Africa in Nairobi, Fairtrade Asia/Pacific in Bangalore and Fairtrade LatinAmerica/Caribean in El Salvador.


FLOCERT (the auditing company): Flocert has local offices in South Africa, India and Costa Rica as well as local auditors in many more countries.



The Interview:


If possible, could you give an estimation to “illustrate” what is the average cost of getting certified, distributed for each market Stakeholder?

Flocert is our certification body for Fairtrade. They charge an annual fee to all certified customers (all actors along the supply chain that are part of the scope of certification). In case of coffee, producers are certified at cooperative level, not the individual farmers. Average fee for small producer organizations is around: 2400€


What is the actual percentage of farms/producers that are physically audited?

A combination of everything, they go to cooperative offices, take a look and create a sample. Then some members of the cooperative are interviewed and there are also meetings with members of the board, such as the president. All certified cooperatives receive at least 2 audits in 3-year certification cycle. It depends on their risk assessment if they received a third audit in that period.


Are there trainings to implement the standards? Who is responsible for it?

The Fairtrade cooperatives are accompanied by trainings and field visits through our producer support team. This is not done by Flocert, in order to keep advisory function separate to the certification work. Fairtrade is structured through continental producer networks (Fairtrade Africa, NAPP for Asia/Pacific and CLAC for Latin America). Those networks hire staff to conduct trainings and field visits at those producers who wish to become certified and also those already being certified. It depends on the region and the need of assessment, but in general each organization shall be visited several times in a year and will be invited to regional workshops and training sessions.


After a producer gets certified, how is he assisted in order to learn more about sustainable agricultural practices?

Producers are assisted through the producer networks in the following area:

* Training on Fairtrade standard and support within certification procedures (such as follow-up after audit, preparation of audit)

* Contacts to potential buyers

* Support producers in participating in standard consultations

* Support and training around topics like: Organizational development, productivity, quality improvement, diversification, climate change, environmental protection, improvement on infrastructure, labor rights, child labor, financing.

* Support producer in exchange among themselves, creating platforms for exchange etc.

* Strengthen small producer organizations in their business and entrepreneurial approach

* Establishing democratic structures and decision making procedures within the organizations

* Learn environmental friendly production methods

* Enhance positive impact of Fairtrade through community investment

* Connect producers with other NGOs, agencies


Furthermore the producer networks make sure Fairtrade is represented and the voice of small holder farmers reflected in industry events, local coffee networks etc.


Are there any adaptions to the standard for each country/region? If yes, what are some examples?

In some instances local adaptations might be considered by the standard unit. This could be the case for definition of Fairtrade Minimum Price. In some product categories prices are different in different regions. In coffee however prices are set at global level. In some product categories there are also adjustments or country policies definied, i.e. in case there is a special governmental marketing body or particular regulations in a country which need to be reflected in the applicability of Fairtrade standards. In coffee this is not really the case.


How to increase international demand for certified coffee?

Very good question! This is our reason to be here at Fairtrade Germany, we work on many different areas:

-       Consumer awareness and engagement with Fairtrade: through our campaigns such as Fairtrade schools, Fairtrade towns, Fairtrade University, Fair Woche (2 weeks per year), in store promotion, social media, Fairtrade Code

-       PR and media (press releases, press conference, contacts to media and informing about Fairtrade, responding to media reporting)

-       Sales promotion: in store promotion support for retailer and brands, campaigning for retail to engage consumers, account management for brands, retailers and out of home partners.

-       Supply chain support: promoting Fairtrade offer to traders and brands, informing about Fairtrade impact, information and stories about Fairtrade producers.

-       And last but not least we engage with government actors in each market, we have Fairtrade advocacy office in Brussels, we work together as global system co-owned by producers (50% voice on all decision making) to get our concept and idea spread to industry and market actors.


How are decisions regarding the Standard taken?

The standards are set according to ISEAL norms in public consultations, to which all actors along the supply chain and others can contribute. In Fairtrade producers have 50% vote in all decision making.


How do you ensure traceability?

Fairtrade products require physical segregation and traceability on documents. This is defined in the Fairtrade standard and audited during onsite audits (along the entire supply chain until the product is in its final packing).


What are the main trainings to increase quality? And how can you measure quality increase?  

The producer networks define the different training needs and train either in workshop or producer organizations individually. A key element is also to facilitate the exchange among producers to raise awareness on best practice etc.

Furthermore the Fairtrade premium is often invested by producer organizations in social projects, such as education for their children, health infrastructure, community development etc.


It's always nice to meet people from these organizations and see what they are doing yes



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