Study Singles Out Fairtrade for Focus on People, Premium and More
In a recently published study, Fairtrade stood out for its people approach and unique financial tools. The report by Netwerk Bewust Verbruiken (NBV), a Belgian consumer interest organization, compares Fairtrade and two other ethical labels for coffee.
“Fairtrade views everything from the producers’ point of view, Rainforest Alliance looks at the relationship between producer and environment and UTZ CERTIFIED pays particular attention to the end product and the production stages,” the study states.
The three labels each have different origins, resulting in very different approaches. Fairtrade aims to support small farmers to improve their lives and take more control over their future.
The biggest differences are found in the economic criteria. Fairtrade is the only label that provides a minimum price that aims to cover the average costs of sustainable production. In addition, upon producers’ request, buyers must provide up to 60 percent of the contract value in pre-financing. Furthermore, there is an established Fairtrade Premium, a sum of money above the agreed upon price that producers can invest in community projects.
Fairtrade standards are also unique in insisting on the establishment of cooperative farmers’ organizations, which provide farmers with greater leverage in negotiations and involvement in the trade process.
In regards to sustainably produced coffee, the NBV reports that all three labels meet the strictest standards regarding inspection, traceability and transparency.
In conclusion the study explains that, “Fairtrade encourages agricultural systems in which producers are the main focus. Fairtrade is further distinguished by its (financial) support for smaller farmers, providing them with market access and making subsistence possible for them and their communities.”