Fairtrade India: helping small farmers access International markets, gain muscle and command a premium
The Fairtrade movement started 25 years ago when a bunch of Dutch pioneers and Mexican coffee farmers demanded a ‘fair’ price for their produce. This small initiative became a global movement touching the lives of millions of growers and shoppers accounting for trade worth billions.
In India Fairtrade International has been engaging with Indian farmers for more than 19 years now. Recognizing India as a big market for Fairtrade products, they recently launched FAIRTRADE Mark (an independent consumer label which appears on products as a guarantee that they have been certified against Fairtrade Standards) on November 21st. Nelson Vinod Moses (NVM) of SocialStory spoke to Abhishek Jani (AJ), CEO, Fairtrade India on how Fairtrade will benefit small farmers, engage with the customer directly, reach out to corporates and also work with the government.
NVM: How will Fairtrade help the Indian farmer?
AJ: Fairtrade is already helping them. For the last 19 years we have helped producers growing cotton, spices, coffee, tea and rice by providing them access to international markets, a minimum support price, as well as the Fairtrade premium. In 2012 alone, the financial benefit to farmers from the Fairtrade Premium- over the Fairtrade Minimum Support Price- was to the tune of Rs. 19.4 crore. According to data that’s a year old, we work with 1,21,000 farmers, across most Indian states.
NVM: Explain the Fair Trade concept:
AJ: Fairtrade is about economic, social and environmental fairness.
On the economic side, it ensures that farming is sustainable, and that the farmers cover at-least their cost of production through a guaranteed minimum support price. If the market price crashes, the minimum support price kicks in. Suppose the market price is higher, then they’d get the market price. On top of this a Fairtrade Premium is provided. Through Fairtrade, farmers secure long-term contracts, access to financial resources and receive advances for their produce.
In terms of the environment, we believe that water, soil, forests and waste need to be managed responsibly. We are against the use of GMO (genetically modified organism) seeds.
When it comes to the social aspect, child labour is prohibited. Likewise, Fairtrade ensures women producers and workers are paid equitably and have an equal say in decision-making.
NVM: What about working with the Indian consumer?
AJ: We want to create awareness of Fairtrade and engagement with the movement in the Indian market. How many of us realize that every consumption choice is a political decision? That every Rs. 100 we spend is an endorsement for how resources are split across labor and capital, how the environment is treated and so on.
Fairtrade is about realizing that you as the consumer have the power to make a difference. If you believe in sustainability then Fairtrade can help you make choices in line with your values. In India, first and foremost we would like to work with the youth and young professionals,because they are actively engaged with sustainability issues. We are hoping to launch Fairtrade programs for schools, a model which has been successful in Europe. Following which we will create a program for colleges and young professionals.
The’ Fairtrade at Work’ program will involve convincing companies to make an ethical purchase decisions. For example, they could switch to using Fairtrade coffee and tea in their vending machines. A small budgetary decision that can have a huge impact. We have the supply chain and other mechanics in place
NVM: How has Fairtrade evolved?
AJ: When Fairtrade first launched, people had to make a deep commitment, because the choice of products were low. People many a times had to make lifestyle changes. But we are happy to report that over the years, because of deepening of the Fairtrade movement, the range of products have jumped up many notches making Fairtrade more accessible. Take the No-Nasties range if tee-shirts, they are great products, making a switch now is easier to make because we have the quality and the range. If you drink tea, we have 5 different varieties to choose from.
NVM: How do you engage with your partners and the government?
AJ: We work with different stakeholders, which include large brands, start-ups, producers, consumers, NGOs and government institutions.
We are not directly involved in supply chain but work with FLO-Cert, an ISO 65 certified organization which does the certification. With the government, we plan on providing tangible research on how Fairtrade provides value. We want to bring government decision makers together for dialogue and we are also actively engaging with commodity boards.
NVM: How much do you have to pay to be Fairtrade certified or be a licensee?
AJ: Certification is completely scale oriented, it depends on the number of products, number of producers or workers and so on, there is a matrix for that.
Licensing is straightforward; you pay 2 percent of pre-retail value of your product. Remember we are a Section 25 company, we don’t make a profit.
NVM: Where are your products currently available?
AJ: They are available across supermarkets and small stores. Auchan is our launch partners, they have a dedicated shelf for Fairtrade products. The other stores include Foodworld, FoodHall and small stand alone retailers include Elements in Calicut.
In Bangalore alone we will have presence in 15 stores. For rapid expansion we need funding and resources. We have applied for registration under Foreign Contribution Regulation Act (FCRA) and are waiting for government approvals.
NVM: Which industries are you working with and how are you helping the small farmer?
AJ: Launch strategy was to focus on five industries: spices, tea, rice, cotton and coffee. We have deep supply chains and expertise with some of these products.
Agriculture is a tough business, it’s not easy being a farmer, majority of farmers are small and as a philosophy, we work with the small-holder. It’s a fallacy that small holders are inefficient, they are more productive per acre and in most case produce more nutrition per acre and at Fairtrade, we help unlock power of the collective.
For example, Fairtrade Alliance Kerala (FTAK), has over 5,000 members and growing. They have the required muscle when buying inputs as well as when selling in the market. Chetana Organic has 11,000 to 15,000 farmers, this way they can get into direct value addition and they even have stake in a garment manufacturing unit. This was they can be fully integrated in the supply chain.