Where now for Fairtrade?

RACHEL Farey is in no doubt about the beneits of Fairtrade.

“There is a group called TARA, based in Delhi, that work with a lot of poor communities. We visited a few of their projects – health projects in the slums, schools – and in one school the teacher explained how her children in that school have now gone to university and are teachers themselves.

“That’s purely through the funding of TARA, running that school from funds provided by Fairtrade producers. And that story could be multiplied thousands of times across India and Bangladesh.” Fairtrade – the movement which promises developing world farmers and producers a fair price for their products, with the money reinvested in their communities – has been part of the landscape for around 40 years.

Although the movement generates scepticism from some quarters about exactly how much of a diference it makes, commercially it has become a huge success: developing from being a small niche, tea and cofee sold entirely through charity shops and stalls, to inluencing the behaviour of major brands and supermarkets.

Which is why it came as a surprise in autumn last year when Traidcraft – the highest-proile and one of the oldest Fairtrade groups, for many people synonymous with the whole movement – irst announced that it was ceasing trading then, after a burst of support, that it would continue in a much reduced form.

“It was shock – shock and sadness,” says Rachel, who is the business manager of the One World Shop in Edinburgh. “The shop has been trading 35 years and we started with their products. We have a very close relationship and have done all along.” Traidcraft’s problems stem partly from universal problems – speciically the weak pound, driven by Brexit-related uncertainty – and others speciic to the company, including a pension deicit and a delayed website which cost it sales. It made losses of about £500,000 last year.

Robin Roth, the company’s chief executive, argues that the changes are actually ‘long overdue’. “We are going through a classic business restructuring, to manage costs in line with income,” he says.

That includes outsourcing functions such as importing and warehousing, which the company has previously done for itself. “The original idea was that we would simply create an alternative to the normal structures, so we could completely separate ourselves from the mainstream traders,” says Robin.

“But this is all about economics of scale: we are having to focus on the bit which is unique and use support companies – with good ethical values – for the other functions.” The restructuring will involve drastically slimming the organisation down to about 12 employees (from 68) and also dropping product lines such as crafts which Robin says are ‘almost impossible to do proitably’.

“That part of the business is quite unsustainable and has been for many years,” he adds, while admitting that their departure from that market will hurt some small producers: “Some have developed very good businesses and some of them won’t even notice that Traidcraft is no longer there, but those who have had least time to adapt to the real business world are the ones who will really struggle when we go.”

There is a sense that Traidcraft has partly been a victim of its own success: in encouraging people to consider ethical trading, they forced the large multinationals to take note. But those multinationals then introduced their own Fairtrade-accredited products, taking custom away from the likes of Traidcraft, and then dropped them in favour of their own (watered-down, critics would say) fair trade schemes.

“The marketing strategy of Traidcraft was always slightly weird in the past,” says Robin. “We encouraged our customers to go to supermarkets to buy Fairtrade goods because we wanted to create consumer demand in the general public.

“I am kind of proud of that craziness because we are working for a big goal, but I think the Fairtrade movement now is fairly weak compared to the supermarket Fairtrade world, and they are now calling the shots.

“This is in no respect a criticism of decisions taken by the Fairtrade movement in the past,” he adds. “Getting Fairtrade into the mainstream was a good thing to do, but the consequences are not controllable. “If you create a niche market, and a big supermarket realises there is money to be made, they will adapt it, understand it and then quite naturally do their own brand version. It’s just hard economics – it’s a natural development, the way supermarkets work. It is what it is, and it’s better than nothing.

“It’s been a fantastically successful idea, but supermarkets do not like to not have control, and their power is immense. The fact that we got them to even acknowledge Fairtrade was relevant is amazing – Traidcraft has inluenced a generation, and there aren’t many companies that can make that claim.”

Looking forward, Robin acknowledges that some people hold the view that now Fairtrade is mainstream that is it for the movement, but it is a view he rejects. Instead, he says, Fairtrade organisations need to focus on the much more complex world they are now working in, where helping producers look after their land and mitigate the efects of climate change are just as important as paying them a fair price.

“There is a great piece of work still to be done,” he says. “We have to see Fairtrade in the light of the new world and new circumstances: it’s not just about paying, it’s about ensuring the soil is healthy.

There is a sense that Traidcraft has partly been a victim of its own success: in encouraging people to take notice of ethical trading, they forced the large multinationals to take note. But those multinationals then introduced their own Fairtrade-accredited products, taking custom away from the likes of Traidcraft…

“I once spoke to (the Indian environmental activist) Vandana Shiva, and I asked her ‘what’s the most important thing to a producer?’ She said that fair trade was about eighth on the list. The irst was the health of their soil, because if you can’t grow food you have to leave the land.” And he says that a lot of the change to a sustainable food production system has to come from the consumers realising the true cost of food.

“The policy of the government for the last 45 years has been cheap food at any cost, and that statement in itself captures the paradox. I know consumers in the UK don’t have a lot of money, I’m fully aware of the issues of poverty and austerity over the past few years. The way our food is produced, the subsidies we pay comes out of our taxation… and what we pay for our food in no way relects its true cost.

“It’s a very, very broken food system we have just now, and climate change threatens to tip a broken system into a very precarious place.”

Traidcraft’s sister charity, Traidcraft Exchange, works with producers on sustainable growing, and it’s that work consumers can support by buying Traidcraft products. But Robin also says we still need to put pressure on the big companies.

“I think if you want to ensure there are companies who are doing it right in the future you need to support them actively.

The multinationals who dominate the food industry are not scared of governments, they are scared of consumers; and what they’re really scared about is customers who spend money somewhere else.

“If you make an active decision to support a company like traidcraft you change the way trade is done. Be a citizen, don’t be just a consumer.”

What there doesn’t seem to be any doubt about is the commitment to Fairtrade in Scotland, which became one of the irst Fairtrade nations in 2014. Rachel says:

“There are so many committed supporters in Scotland, and I do think the third for ethical, better ways of living and shopping is still as relevant.

“It’s partly because we moved back to St John’s [after temporarily relocating due to building work] but our sales have been beating all our targets.”

Martin Rhodes, the chief executive of the Scottish Fair Trade Forum, an umbrella group of Fairtrade traders, is also bullish about the future of Fairtrade. He says: “It is good news that Traidcraft will be continuing to trade but of course it is sad that a Fairtrade pioneer such as Traidcraft is scaling back its business. These are diicult times for retail and Fairtrade retailers feel that as much as anybody else. Fairtrade businesses and campaigners need to face up to the current challenges, but it isn’t a time to become dispirited. Sales of goods with the Fairtrade Mark increased in the UK last year by 7% according to independent research.

“Of course, there are new challenges but that doesn’t mean that committed Fairtrade campaigners are going to give up. Fairtrade has always had to challenge a very powerful global trading system. This was never going to be easy but we continue to challenge global inequality and the unfair imbalance in trading relations. Now as much as ever, we need to challenge injustices – people are looking for a better way of doing trade that can be beneicial to all involved. We need to ofer that alternative.

“The launch of the International Fair Trade Charter in September 2018 saw the two largest Fairtrade international bodies setting out their common values and approaches. The Charter is an opportunity to refocus on promoting the trade of goods on fair terms and challenging the current orthodoxies of trade.

“Now is the time to reinvigorate our campaign and put our energies into challenging unfair global trade rules and also doing what we can to support Fairtrade businesses now. Faith communities have always been part of the very broad alliance supporting Fairtrade. I’m conident that faith communities will continue to be part of that broad alliance for trade justice. Together the Fairtrade movement can face the current challenges and help build a just world.”

This is reinforced by the Church of Scotland and other faith groups who have long been enthusiastic backers of Fairtrade.

The Rev Dr Richard Frazer, convener of the Church of Scotland’s Church and Society Council, says that should continue:

“Churches have played a momentous role in the emergence of Fairtrade. From the very beginning churches have spoken out about the importance of buying Fairtrade and I have no doubt that most church members across Scotland and the UK have bought something from a Traidcraft stall in a church hall. Fairtrade has played an important role in our church lives, and it’s important that we continue to support companies like Traidcraft as they face some uncertainty. “Fairtrade is important to church communities because it relects the message of justice and peace we ind in the Bible. When we buy Fairtrade, we can guarantee that producers get a fair price for their product, a safe environment to work in, and a premium to spend in their community. It is a relection of the justice we seek in the world, and is a practical way to bring about an economy built on equality. We look forward to a day where all trade is fair, where everyone gets a fair price for their product, and until then we will continue to support Fairtrade.”

And Sally Foster-Fulton, head of Christian Aid Scotland, adds: “By afording farmers and artisans a fair price for their products and a just space at the table, the Fairtrade movement has been a beacon for the empowerment of people and the inluence your consumer choices can have on just economics. This is the time, not to move away from fair trade, but to insist on it. “Put another way, who would choose to buy ‘unfairly traded’ products?