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New funding for promotion of fair-trade production in the Pacific

08 October 2012

At the beginning of August 2012, the New Zealand Minister of Foreign Affairs ‘announced $4.56 million in new funding for Fairtrade ANZ (Australia and New Zealand) to help unlock the export potential of smallholder farms in Pacific agriculture’. The minister said that there was ‘real demand for high-end Pacific products’, such as cocoa, coffee and vanilla. It is maintained that ‘gaining Fairtrade certification will help position Pacific growers … up the value chain’. The funding is to be targeted at supporting the certification process, developing marketing opportunities, linking farmers’ groups to buyers and raising consumer awareness of fair-trade products.

A new initiative has also been taken by Fairtrade ANZ to develop exports of Fairtrade coffee from Papua New Guinea.

At the end of June 2012, Fairtrade ANZ attended the Trade Pasifika 2012 trade fair, exhibiting a number of products and organisations that have benefited from Fairtrade certification and helped to boost the agricultural sector in Pacific island nations. Particular prominence was given to the example of the Labasa Cane Sugar Association on Vanua Levu, Fiji’s second biggest island.

Editorial comment

The scope for fair-trade production in the Pacific is demonstrated by the range of products that have come under Fairtrade ANZ’s patronage in recent years. The Labasa Cane Sugar Association, which participated in the recent Trade Pasifika 2012, is an excellent example of the work supported by Fairtrade ANZ. Four thousand cane growers, - some 15,000 people including families – form this Fairtrade-certified association. The Association collected US$2.2 million of Fairtrade premium in 2011, with funds being used, among other things, for the establishment of community water supply projects, purchase of school computers and bridge repairs.

There is a major expansion of demand for fairly traded sugar under way, accounting for the decision of Tate & Lyle Sugar to progressively convert its entire direct consumption sugar range to Fairtrade-labelled products, but there has been little price competition between fair-trade sugar suppliers, in contrast to the banana sector. However, the pending termination of price guarantees for ACP sugar from 1 October 2012 could exert a downward pressure on prices, particularly if combined with moves towards the abolition of production quotas and a liberalisation of EU import arrangements for sugar.

In this context, using part of the current fair-trade sugar premium to support processes of crop diversification could well prove valuable. However, critical to this will be the identification and development of commercially attractive market opportunities for alternative fair-trade products. The new financing facility established by the New Zealand government could prove valuable in this regard.


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