is fairtrade a potential alternative solution to poverty alleviation for small-scale producers and...
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Is Fairtrade a potential alternative solution to poverty alleviation for small-scale producers and their communities based on the principle of trade not aid? This is a look into Fairtrade as a model and how it is currently working in the Swaziland sugar industry. This is currently a pilot test in Swaziland and the initiative was undertaken by the Swaziland Sugar Association (SSA).TRANSCRIPT
Is Fairtrade a potential alternative solution to
poverty alleviation for small-scale producers and their
communities based on the principle of trade not aid?
Marisa da [email protected]
7 November 2013
Trade NOT aid
According to Johannesen and Wilhite (2010):◦ Fairtrade is a market-
based approach to social and environmental development for producers through the use of standards and a price floor
What Is Fairtrade?
Producers Consumers
Bananas Cocoa
Cotton
Flowers
Honey
Cereals
Rice
Spices
Tea
Wine
Fairtrade Products
Coffee&
Sugar
Holistic View◦ Primary:
Fairtrade conferences and conducting semi-structured interviews
◦ Secondary: Impact Studies, Case
Studies and existing journals
Used Yin for case study guidelines
Case studies are designed to bring out the details◦ Multiple data◦ Practical implications
Single Case study
Research Methodology
DEVELOPED FAIRTRADE SUGAR COUNTRIES
1968
1975
2001
2012
History of the Sugar Industry
EBA
Sugar Reform Begins
2006
Sugar = substantial contributor to the GDP of Swaziland
Commencement in 2008 but only certified in 2012
Why Fairtrade is needed in the sugar sector?
Price volatility
Climate change
Competition
Swaziland Sugar Sector
Producers PerspectiveThe Two Main Economic Benefits of Fairtrade1.Guarenteed Fairtrade Minimum Price
Aims to ensure that producers can cover their average costs of sustainable production
Acts as a safety net
Producers PerspectiveThe Two Main Economic Benefits of Fairtrade1.Guarenteed Fairtrade Minimum Price
Producers PerspectiveThe Two Main Economic Benefits of Fairtrade1.Guarenteed Fairtrade Minimum Price
Agreement Reforms
Volatile Industries
Sell Premium Products
NO Minimum
Price
Comparison against developed Fairtrade sugar countries to
illustrate the potential benefits
Premium was used primarily to cover the costs of certification
3 conditio
ns
Social
Socio-Economi
cEnvironmental
Producers Perspective2. Premium Benefit
According to Fairtrade Labelling Organisation (2013): A price that covers the cost of production A social premium Contracts that allow long-term production
planning Long-term trade relations Environmental standards promoting best
agricultural practice A democratic decision-making Forced labour and child labour are prohibited.
Producers Perspective3. Standards and Certifications
Producer organisations are paid a Fairtrade Premium of $60 per tonne
Fundamental Element
Producers have an equal say
Democratic decision-making
Producers Perspective4. Empowerment
More ethical decision-making
Greater transparency between producers and consumers
Create awareness
Consumers Perspective1. Marketing and Strategy
Selling into conventional markets
Consumer guarantee◦ Quality
Brand mark is crucial
Consumers Perspective2. Mainstreaming
Issues, Problems and Obstacles
Supply
Demand
55000 tonnes
10000 tonnes
2. Mainstreaming initiative with a risk of
◦ Co-option◦ Dilution ◦ “fair-washing”
3. Higher input costs to adhere to certification requirements
4. Low level of education
1.
1.231 million people ◦ 40% of Swazis live below the poverty line
First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.
With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being
available to the Fairtrade producers.
Potential for poverty alleviation in Swaziland
1.231 million people ◦ 40% of Swazis live below the poverty line
First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.
With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being
available to the Fairtrade producers.
Potential for poverty alleviation in Swaziland
Empowerment
Better Working Conditions
Premiums
Relationships
1.231 million people ◦ 40% of Swazis live below the poverty line
First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.
With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being
available to the Fairtrade producers.
Potential for poverty alleviation in Swaziland
Empowerment
Better Working Conditions
Premiums
Relationships
What started with humble beginnings in assisting a few small farmers may well be
one of the major answers in upliftment of
communities and the alleviation of poverty