10 Jun 2022

New Study Finds Fairtrade Enhances Farmer Resilience and Sustainability Amid Global Crises

According to the report, Fairtrade farmers enjoy stronger farming cooperatives and greater economic resilience when compared to non-Fairtrade certified counterparts

Bonn, Germany – In times of global crisis, farmers who are part of Fairtrade certified producer organizations benefit from more robust and sustainable farming households, specifically in the areas of economic resilience, social wellbeing, environmental sustainability, and good governance of their cooperatives, a new study published today has revealed.

The report, titled Assessing the Impact of Fairtrade on Poverty Reduction and Economic Resilience through Rural Development and jointly released by Fairtrade Germany and Fairtrade Austria and implemented by Mainlevel Consulting, finds that Fairtrade Standards, Fairtrade pricing, and producer support programmes positively impact certified farmers and their communities when compared to non-Fairtrade certified farmers, particularly in times of difficulty and distress.

During the study, researchers examined the same producer organizations three times over the past decade, gaining valuable insights into the changing conditions and perspectives of Fairtrade farmers. The Fairtrade cooperatives included in the research – a cocoa cooperative from Ghana, a coffee cooperative and three banana cooperatives from Peru – were analysed alongside non-Fairtrade counterparts of similar size and location to isolate the effects of Fairtrade as compared to other external factors.

The research finds improvements in farming households’ financial situations, such as increased earnings, stronger safety nets, and boosted savings. In one specific instance, coffee farmer members of the Fairtrade certified La Florida cooperative in Peru reported earning incomes 50 percent higher than those of non-Fairtrade farmers.

“In times of crisis, it becomes evident that Fairtrade enhances farmers’ economic resilience and supports them in continuing their profession in challenging times,” said Tatjana Mauthofer, researcher at Mainlevel Consulting and co-author of the study. “The study shows that the two Fairtrade mechanisms – the Minimum Price and the Premium - represent a crucial safety net for farmers, their small producer organizations and eventually, also their communities.”

Fairtrade: An ‘uptick’ in benefits

According to the report, Fairtrade’s positive impact on certified farmers goes beyond economic well-being. Fairtrade cooperatives emerged stronger in good governance, with elements like transparency and democratic decision-making standing out. The researchers also note that good governance makes sustainability possible, as cooperatives must make and carry out decisions related to environmental, social, and economic spheres.

Fairtrade farmers also registered an uptick in benefits across social wellbeing indicators, including gender equality and workplace safety and health, when compared with their non-Fairtrade counterparts. Women in Fairtrade cooperatives, for instance, showed more confidence in speaking up and voicing their thoughts. In one focus group discussion cited by the study, Fairtrade certified Kuapa Kokoo cocoa farmers in Ghana made clear that the decision-making power for women Fairtrade producers had improved over the last four years. Similar advantages were noted on health-related issues. The more well-established banana cooperatives, for instance, used their Fairtrade Premium funds to provide health services and trainings, including on COVID-19 safety measures.

Facing a ‘grim reality’

At the same time, the researchers also identified significant challenges that risk undermining the gains Fairtrade farmers have achieved and which threaten their livelihoods. Indeed, Ms. Mauthofer pointed out that the advantages of the Fairtrade system are falling under increasing pressure from the “grim reality” of global calamities such as climate change, COVID-19, and prices paid for agricultural produce that are “too low to cover rising costs of farming and daily life.”

The report notes that the effects of climate change are compelling farmers to quickly adapt and diversify their income sources, as well as adopt climate-friendly farming practices, often without much-needed external financial support. The financial strains caused by climate change, meanwhile, are overlapping with those caused by the COVID-19 pandemic, which has cut sales for some farmers while inflating costs for fertilizer and transport.

Although the study emphasizes Fairtrade’s role in supporting farmers and cooperatives to weather these financial challenges, it warns that progress toward reducing poverty – as well as the goal of achieving living incomes – will be stalled, if not reversed, if farmers are not paid more.

“This report is critical in helping Fairtrade certified farmers, brands, and retailers understand the positive impact the Fairtrade system has on the ground and the real difference it makes in farmers’ lives,” Claudia Brück, Member of the Board at Fairtrade Germany, explained. “At the same time, it provides us with a call-to-action and urges all actors within the supply chain to step up their responsibilities to invest in climate change adaptation and mitigation and embrace Fairtrade values before it’s too late. That’s the main takeaway from this fascinating study.”

A fairer call-to-action

Among the immediate actions recommended for restarting progress towards sustainable livelihoods for farmers and ensuring a future for products like bananas, cocoa and coffee, the report calls on supply chain stakeholders to fund climate change adaptation measures; pay higher prices to farmers that support a living income; finance and support farmers to diversify their incomes and modernize and improve farm management; and measure and mitigate the disproportionate effect of COVID-19 on women and vulnerable populations.

“From our Premium and Minimum Price to our Climate Schools, Fairtrade has comprehensive approaches to all these existential threats,” Ms. Brück noted. “But companies and governments need to drastically expand the commitments they are making or we will see farmers continue to slide backwards and potentially abandon farming altogether.”

“Fairtrade plays a pivotal role in mobilizing actors and funds and in raising awareness, particularly on the effects of climate change at the beginning of the value chain. That’s why the report calls on Fairtrade to continue its strong stance to support the implementation of climate change adaptation projects and to create awareness at both retailer and consumer level,” Ms. Mauthofer continued.

“At the same time, actors along the supply chain, who have a continued business interest in sourcing agricultural products, should urgently expand their responsibility and support cooperatives and producers in implementing climate change adaptation measures.”