What is Fair Trade?
Fair Trade is all about being fair. It focuses on support and respect for farmers and producers around the world. It ensures better prices for goods produced, improved working conditions, local sustainability and fair terms of trade, amongst other things.
Terms of Fair Trade
There are various Fair Trade schemes, all with a common thread:
- Better wages
- Social rights and security for workers
- Training for workers
- Non discriminatory employment
- No forced labour
- Adequate health and safety conditions
Fair Trade certified goods do not have to be organic but if they are, the producer will receive a higher Fair Trade minimum price.
Further, Fair Trade farmers need to follow sound agricultural practices:
- Non GM
- Maintenance of soil fertility
- Maintenance of water resources
- Management of waste
Fair Trade is also concerned with trying to alleviate issues that arise with seasonal crops (such as coffee) where the farmer has to invest heavily prior to harvest. Timely access to seeds, transport, labour etc. is vital so Fair Trade can help by offering pre-financing. Basically this provides access to set-up funds, allowing the farmer to buy the necessary seeds, fertilisers etc. to then plant and manage his crop prior to harvesting and ultimate sale on the market.
The rule of a Fair Trade scheme is that better wages are paid and / or a Fair Trade premium is paid which goes towards sustainable community projects. Note the requirement is not that both better wages and community projects are funded.
These guidelines are the basics of a Fair Trade scheme.
Different Fair Trade Schemes
There are several Fair Trade schemes, all following the above criteria:
Fair Trade International (certifying goods);
World Trade Fair Organisation (which certifies organisations);
European Fair Trade Association; various Church organisations;
FairTSA (Fair Trade Sustainability Alliance) who certifies Lucy Bee product range.
Our coconut oil is imported from The Philippines, the Solomon Islands and Sri Lanka and Fair TSA certifies these coconuts.
We at Lucy Bee pay a 10% premium for our coconuts to be Fair Trade. This is the factory gate price and bears no relevance to the sale price of our coconut oil. We could buy exactly the same oil cheaper and not be Fair Trade but we feel it’s morally right to support the producers in this way.
Of this Fair Trade price premium, 70 % is used to pay local farmers more for their products and 30% is accumulated and used for community projects. So this scheme ensures better wages AND a premium (not and / or a premium) for sustainable community projects. On top of this, we pay 0.75% of sales towards the running costs of the Fair Trade Sustainability Alliance which allows them to do their good work.
This set up, applies to our cacao, cinnamon, turmeric, mac and lucuma too. In fact, when sourcing these, our Peruvian and Indian partners became FairTSA certified so that we would buy their maca, lucuma, turmeric and cinnamon from them.
How Much More Are Farmers Paid?
Winfried Fuchshofen, Director at FairTSA advises, “Typically, our standard requires that the farmers get a price that is at least 7% higher than they would get for their product at competing companies. Since only about 10% of our producers oil sells as Fair Trade, they pay ALL its farmers a price that is at least 5% higher than that of competing companies and thereby exceeds our standard. In addition, 3% of the farm gate price have to be paid as Social Premium in a fund that is administrated by the producer and controlled by FairTSA and our cooperating certifier.”
Who Decides How the Funds Are Allocated / Spent?
FairTSA discuss ideas with the community on how the Fair Trade premium should be spent. In this way, farmers can have their say on what’s really needed, rather than a company deciding what they think is needed. Makes sense, doesn’t it and so simple!
How the Farmers That Produce Lucy Bee Raw Coconut Oil Live
With our coconut oil from the Philippines, the farmers live in small villages in three different regions of the Northern part of Mindanao. They live in basic conditions in one room wooden huts with no access to utilities that we take for granted, such as running water and electricity or basics that we take as a given such as schooling for all children.
Healthcare in rural areas is virtually non-existent, with limited or no public transport and access to safe, clean water is difficult. Infant deaths due to waterborne pathogens are prevalent here.
It’s hard to imagine really isn’t it? I remember a couple of years ago we had a burst water main and were without water for 24 hours. The inconvenience and hassle was much worse than having a power cut and our normal routines were really affected. It’s hard to truly describe the inconvenience we ‘suffered’ for those 24 hours. Sounds frivolous doesn’t it and I’m almost embarrassed to mention it when you consider some people in the world live like this every day!
With our oil from the Solomon Islands, a different area in the world but, shockingly, a similar story. Living conditions here are very different to our own.
Our Fair Trade premium here helps to support daily essentials such as food, medicine and education. Our producer here explains that, “recently people have changed from using dangerous, expensive, fossil-fuelled kerosene lamps to safe, renewable solar lighting systems.”
How FairTSA Helps
More from Winfried:
“Since this (in the Philippines) is a big farming community and the Social Premium goes only so far, the community development projects in the villages are done on a rotating basis.
“The first two projects (in the Philippines) consisted of the drilling of two wells. Initially, the idea was to employ manual well drilling technique so as to employ as many community members as possible in the project. However, the ground was way too rocky for this technique to work, so the decision was made to use diesel-powered drilling equipment. Including the building of sturdy sheds to protect the wells, the amount per well spent was about US-Dollar 10,000 each = USD 20,000 in total.
“The next phase of the community development projects is now under way. It is planned to outfit several villages with no access to electricity whatsoever with solar panels so that they can have at least lighting, battery charging and other low voltage power uses. The amount of Social Premium has to be considerable so as to be able to buy and install the solar panels in larger quantities” I understand that each solar powered light bulb will cost approx $50 and each home will have one single bulb to light their home – this for the first time in their life!
A Difference with FairTSA
Winfried continues, “Another aspect of our Fair Trade program (not all FT programs do this!) is that we also include the factory workers that process the coconuts. We make sure that all workers initially earn at least the minimum wage and 10% above minimum wage after 3 years.
“We also make sure that the working conditions are safe. In case of occupational hazards the owner must implement means to prevent and avoid such hazards, train new workers as well as workers that operate potentially dangerous equipment.
“In addition we ensure that workers may join trade unions if they exist in the region, and if not, as in this case, they have the right to organize themselves, elect representatives who are paid to meet every month for a few hours to discuss their issues, and negotiate with facility management.
“Our inspector visits the processing facility on an annual basis and ensures that the requirements are kept. In case of smaller violations a noncompliance notice will be issued, with the nature of the corrective measure(s) listed and a date by which they have to be implemented. The inspector also ensures that the corrective measures have been implemented as directed.”
FairTsa also confirm that monkeys are NOT used to pick the coconuts that are used for Lucy Bee Coconut Oil.
Future Sustainable Community Projects
The Fair Trade premium that we pay is deposited in a separate bank account, along with contributions from other companies that support Fair Trade. These funds are then re-invested for Community Development.
With regard to upcoming projects in the Philippines, our producer writes “many of these farmers can send their children to school as the government gives free High School Education. After the farmer’s children finishes high school, they stop getting a college education because they could not afford to go to college as the tuition fees usually cost about US$ 2,000.00 a year. We and FairTSA has started giving scholarship to “deserving” students.
“We start by carefully selecting the deserving students who are in the Top 5 of their class and interview them together with the School staffs. Those who deserve to be given scholarship, we give them scholarship and will pay for their Tuition Fees. However, we inform them that they will continue and maintain to be our scholars provided that they must maintain to be in the Top 10 of their class. Failure to be in the Top 10 for 2 times, we will be forced to discontinue the scholarship. At present, we have 8 scholars and we plan to increase this every year”
So these scholars have to continuously prove themselves to continue to receive their funding.
In the Solomon Islands, new projects are being considered and our premium continues to support day to day basics. With an increase in coconut oil production, families benefit with this supplement to their traditional income from fishing.
FairTSA Helps the Farmers in Many Ways
Land between the coconut trees (some 10 meters) is generally not used. To increase income and make better use of the land, FairTSA has initiated a programme of helping farmers by giving them planting materials to grow banana and fruit trees, inbetween the coconut trees.
As new projects are undertaken, we will advise you but it’s interesting to see how your purchases are making a huge difference to this simple and basic life of others.
Why Should I Buy Fair Trade?
Obviously you don’t have to!
Sometimes Fair Trade products are a little more expensive (though not the case with Lucy Bee) and shoppers may be conscious of this. What we’ve aimed to do in this article is show you the real difference your purchase makes to others. Differences that make for an improved standard of living – not as in 5 star luxury but very basic, simple differences like easier access to clean, safe drinking water, solar powered light in a basic wooden home, funding for a college education….all things that we easily take for granted.
Some will voice criticism of Fair Trade schemes, citing bureaucracy and red tape eating into contributions. It’s a fact of life that each scheme needs to be monitored and run as a business, including office salaries and running costs. Without the passion and compassion of these officials, no schemes would exist (except perhaps, in the case of a wealthy philanthropist with a bottomless pit of funds!). FairTSA is a smaller company and as such has fewer running costs. Winfried confirms that they do not squander money on large office and first class travel, rather they travel economy class, stay in maximum 3 star accommodation and work from a small, low rent office space.
Agroforestry – An Added Extra!
The coconuts used to produce our raw, organic coconut oil are grown in agroforestry. Whilst not a requirement of Fair Trade or indeed part of the Fair Trade agreement, we value this for its environmental benefits and feel that it works in harmony both with our company philosophy and that of the Fair Trade aims, too.
Agroforestry means the crops are grown amongst natural tropical vegetation. This is one of the most environmentally friendly agricultural production systems in existence. It combines agricultural and forestry technologies to create more diverse, productive, profitable, healthy, and sustainable land-use systems1
Why is this important?
- It contributes to soil fertility for food crops which means food security
- Cleaner water through reduced nutrient and soil run-off
- Provides growing space for medicinal plants which is important in areas where there may be limited access to mainstream medicines.
As mentioned above, our coconut oil producers encourages the farmers to grow other crops between the coconut trees which ensures increased income and better security in case of crop failure.
How We Can All Help
Try looking out for the Fair Trade symbols on goods and making a conscious decision to support these producers, this way, we can all make a difference to a life, every day.
About Lucy Bee Limited
Lucy Bee is concerned with Fair Trade, ethical and sustainable living, recycling and eating close to nature with additive free products for health.