All you need to know about Fairtrade Sourcing Programs

In January 2014 Fairtrade Labelling Organizations, also known as Fairtrade International, put a cat among the pigeons, announcing the development of the Fairtrade Sourcing Programs. Let us come back to this piece of news, explain it and balance the pros and cons.

Fairtrade International and the system of Fairtrade label.

Quinoa farmers from the cooperative
 working with FAIR.

Fairtrade International was created in 1997 to be responsible for the development and the cooperation among the different actors of the Fairtrade movement. It has developed fair norms and standards with the will of modifying the international trade to make it fairer for little producers of developing countries.

Before January 2014 the system was quite simple. If a product was labeled “Fair-Trade”, it meant that every single ingredient or component it included came from Fairtrade. Easy to understand, but quite hard to deal with when you are an entrepreneur. Consequently the current figures of Fairtrade are sad: the Fairtrade production of cocoa represents only 1,2% of the market of cocoa, and most of the Fairtrade production is sold as “not fair-trade” because the offer is far bigger than the demand.

To solve the issue Fairtrade International announced in January a second system, complementary to the first one, which is called the Fairtrade Sourcing Programs (FSPs).

The Fairtrade Sourcing Programs.

The goal of FSPs is to increase Fairtrade sales at a global scale in order to get a bigger Fairtrade Premium. The Fairtrade premium is the sum of money that companies pay in addition of the price of the products they buy, sum that goes to the association of producers to allow them to invest in education, healthcare, or farm improvements. More sells mean bigger Fairtrade Premium, and so, bigger development for emerging countries and little producers.

FSPs consist in three programs, one for cotton, one for cocoa, and the last one for sugar. Norms and standards do not change. The striking aspect of the project is that a product does not need to be fully “fair-trade” but only one of its components. For example a chocolate bar, made of 100% fair-trade chocolate, but “normal” sugar can be considered as a Fairtrade product. It will not have the same label as the 100% Fairtrade product, but one that shows that it takes part of Fairtrade Sourcing Programs.

Consequences of the FSPs on the Fairtrade movement

This is a revolution for the Fairtrade movement especially in cocoa sphere. Therefore Ferrero committed to buy 20,000 tonnes of cocoa beans under Fair-trade conditions. This was great news for the Fairtrade movement and little producers of Ivory Coast, who will benefit from a long-term increase of their incomes. Nine companies also committed themselves in the Fairtrade Sourcing Program for cocoa: Mars, Rewe, Riegelein, Coop, Kambly, AEON, Lidl & Kaufland, Switch.

Some people applause, but others question the initiative. It was the case of the United States, Canada, and Great Britain, but also many brands attached to another vision of Fairtrade: Alteréco, Ethiquable, Malongo, Artisans du Monde… They argue that the goal of Fairtrade is, according to them, primarily to modify unfair rules of international trade, and that they were afraid FSPs benefited big companies, already really present in the markets. FSPs might then only perpetuate unfair rules of traditional international trade.

And what’s new for products other than cocoa, sugar and cotton?

The CLAC, a Fair Trade producer network representing Latin American Producers, declared to be opposed to the FSPs whereas it greeted another announcement with enthusiasm: in July 2013 Nespresso launched a long-reaching partnership for coffee with the AAA farmers cooperatives of the region of Caldas, Columbia.

According to Harriet Lamb, Chief Executive of Fairtrade International said: “This encourages the kind of development that not only helps whole communities, it furthers emphasizes the fundamental necessity of ensuring that quality of life of farmers is on a par with the quality of coffee they are producing.”

Bruce McNamer, President & CEO of Technoserve - Jean-Marc Duvoisin, CEO of Nestlé Nespresso - Tensie Whelan, President of the Rainforest Alliance - Harriet Lamb, President of Fair Trade International - Georges Clooney

Both FSPs and Nespresso partnership take part in a new vision of Fairtrade, more reachable for entrepreneurs, but for clients too.