In May 2014, Fairtrade International announced that “Club 3000”, a group of 629 cocoa farmers in Papua New Guinea (PNG), had become “the first Fairtrade certified cocoa organization selling into a Pacific regional supply chain”, with a first consignment scheduled to be shipped to Australia for use in Cadbury’s Dairy Milk chocolate bars. This follows changes to the Fairtrade Standard for Contract Production, which makes it easier for cocoa farmers to organise in non-formal structures in partnership with a support organisation committed to improving farmers’ business and farming skills in order to make the transition over time to being an independent producer organisation.
The farmers’ partnership in PNG is with Monpi Cocoa Exports of Madang, and support for the organisation of the informal Club 3000 has been received from the New Zealand Aid Programme and Mondelez. The production target for Fairtrade-certified cocoa in 2014 is 120 tonnes.
However, a 4-year research project from the University of London's School of Oriental and African Studies has criticised the failure of Fairtrade certification in terms of improving working conditions. Analysis of figures for Fairtrade-certified coffee, tea and cut-flower farms in Uganda and Ethiopia found that, in terms of wages and education, workers at some certified farms were “significantly worse paid and treated” than at non-certified farms.
The report has given rise to some adverse publicity for the Fairtrade movement and to a debate on establishing “more relevant auditing processes to ensure decent pay and working conditions”. One of the authors of the report has argued that “too much of the PR for Fairtrade has been based on evaluations they have commissioned from ‘research partners’ that in many cases appear to have done a rushed job rather than fully independent or properly academic research.” The researchers involved called for:
- auditing processes that are more independent;
- sample audits to be carried out on all farms, including those employing less than 20 people;
- clearer labelling requirements for Fairtrade products with more of a focus on “wages and occupational health and safety”.
The costs of Fairtrade certification has long been seen as an obstacle to an expansion of Fairtrade production. By enabling farmers to gain the benefits of Fairtrade marketing and improved production practices before they incur the costs of setting up a formal organisation, the changes to the Fairtrade Standard for Contract Production would appear to address these long-standing concerns.
However, challenges are faced in growing Fairtrade markets across a range of sectors, in line with the expansion of Fairtrade-certified production. The recent academic questioning of the effectiveness of Fairtrade standards in attaining improvements in livelihoods and working conditions could exacerbate this challenge of promoting a more rapid expansion of Fairtrade sales.
In those ACP countries where the promotion of Fairtrade certification is seen as a potentially important strategy for enhancing farmer incomes and improving working conditions, it would appear important for ACP governments, NGOs and industry stakeholders to work together to:
a) improve cost-effective monitoring of compliance with underlying Fairtrade objectives (e.g. on child-labour-free production);
b) monitor debates on the changes required to maintain consumer confidence in the integrity of the Fairtrade labelling system;
c) ensure that moves to facilitate access for farmers’ groups to Fairtrade markets are not undermined by changes to the standards applied, in order to ensure more rigorous control of compliance with underlying Fairtrade objectives.
While this is not an area in which ACP governments have traditionally engaged, the whole issue of the design and application of private standards is taking on a growing significance within ACP–EU trade, as product differentiation strategies are launched in ACP countries across a range of sectors in order to try to deal with growing competition on traditional markets (e.g. the focus in the Dominican Republic on dual-certified organic/Fairtrade banana exports to the EU).